Sep. 22, 2026, 2:30 p.m.
Honolulu Hale
To: Honolulu City Council Committee on Housing, Homelessness and Parks
Andria Tupola, Chair
Augie Tulba, Vice Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
RE: Bill 18 (2026), CD1 — RELATING TO AFFORDABLE RENTAL HOUSING
Aloha Chair Tupola, Vice Chair Tulba and other members of the Committee,
The Grassroot Institute of Hawaii offers comments on Bill 18 (2026), CD1, which proposes changes to the Bill 7 affordable housing program.
Specifically, the draft of the bill approved by the Committee on Aug. 26 would increase the 20,000-square-foot maximum lot area to 40,000 square feet; repeal maximum square footage rules for different unit configurations; allow projects built in the Primary Urban Center Development Plan area to have a floor-area ratio of up to 5.0; and change the calculation for the maximum number of units that can be built in a Bill 7 project, with even more units allowed in projects near high-service bus stops.
Regarding height limits, the current draft would clarify that Bill 7 projects can be built to the height allowed by the underlying zoning district or 75 feet, whichever is taller. For projects in a special district, heights would be limited to 60 feet or the height of the underlying zoning district, whichever is less.
Currently, Honolulu’s Bill 7 program offers homebuilders relaxed zoning rules, property tax breaks, fee waivers and other financial incentives in exchange for building multiple housing units, at least 80% of which are required to be rented for at least 15 years at rents that would be affordable to residents making 100% or less of the area median income.[1]
The Bill 7 program has been an important tool for city homebuilders interested in producing affordable housing, and the expansions proposed in Bill 18 (2026) would add much-needed flexibility.
After all, a 2024 update to the Hawaii housing planning study estimated that Honolulu needs 27,710 new units built between 2023 and 2027 to keep up with demand.[2]
Bill 18 (2026) also aligns with the city’s 2025-2028 Strategic Housing Plan, which sets a goal to “Identify opportunities for maximizing urban land use through adjustments to density standards in the Land Use Ordinance,” and states that “Enhancing predictability for developers is also critical, with a focus on methods to streamline and standardize processes.”[3]
Likewise, this bill supports the housing goals laid out in the city’s Primary Urban Center Development Plan.
Policy H-1.3 in that plan aims to “Encourage a greater variety of housing types, including low or middle-density multifamily housing, ADUs and ohana units, mid-rise apartment buildings and shared housing models,” and policy H-2.1 aims to “Expand the supply of income-restricted affordable housing through requirements, incentives and public-private partnerships.”[4]
Likewise, it would advance policy H-1.1 of the Primary Urban Center Development Plan, which is to “Enable and incentivize residential infill development in transit-accessible planned growth areas.”[5] It would also address a weakness of the Bill 7 program identified by the University of Hawai’i Economic Research Organization: its lack of transit-oriented or rail-corridor-specific development standards. [6]
Grassroot also makes the following comments on Chair Tupola’s proposed CD2 amendment and requests additional language.
First, Grassroot believes the height limit currently in the bill must be changed to recognize that some special districts throughout the island allow for buildings taller than 60 feet. Chair Tupola’s proposed CD2 would address this by allowing buildings to be 75 feet tall or the height of the underlying zoning district, whichever is taller, in the Honolulu Primary Urban Center Development Plan area that encompasses most of the island’s urban areas.
Second, Grassroot requests that section three of earlier drafts of the bill be reinserted into the legislation, which would allow Bill 7 projects to be built in the business zoning district.
This amendment is critical to facilitating the construction of mixed-use, walkable areas for the eventual residents of these homes. Policy GD-1.1 of the Primary Urban Center Development Plan is to “Create mixed-use TOD neighborhoods with meaningful character and a sense of place.” Its policy GD-2.1 is likewise to “Support mixed-use infill development and increased bus service along key underutilized commercial corridors.”[7]
Third, Grassroot objects to the inclusion of off-street parking requirements for Bill 7 projects, as written in the current CD2. Chair Tupola’s proposed CD2 amendment, however, would modify the existing language by stating that homebuilders are “encouraged to provide off-street parking.”
In general, Grassroot recommends extending the sunset date of the Bill 7 program beyond 2030. Because of delays in obtaining financing and permits, a four year window could doom many beneficial projects. Making this program permanent would be best, but extending the sunset date to 2040 would at least give homebuilders more certainty to plan for future projects.
Thank you for the opportunity to testify.
Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
1050 Bishop St. #508 | Honolulu, HI 96813 | 808-864-1776 | info@grassrootinstitute.org
[1] § 32-1.1 Definitions., Revised Ordinances of Honolulu, accessed Oct. 31, 2025.
[2] “Hawaii Housing Planning Study 2024,” prepared by SMS Research and Marketing Services, Inc., FSR Consulting LLC and Ward Research, Inc. for the Hawai’i Housing Finance and Development Corporation, Table 39A, p. 124.
[3] “Strategic Housing Plan 2025-2028,” Prepared by the Mayor’s Office of Housing with CommunityScale, January 2025, p. 70.
[4] “Primary Urban Development Center Development Plan,” Honolulu Department of Planning and Permitting, April 2025, p. 158.
[5] Ibid, p. 158.
[6] Trey Gordner, Edith Prager and Rafael Ceilio Munoz, “Draft report: Assessing Honolulu’s ‘Bill 7’ lnfill/Workforce Housing Program,” University of Hawai’i Economic Research Organization, p. 16.
[7] “Primary Urban Development Center Development Plan,” Honolulu Department of Planning and Permitting, April 2025, p. 18.
