July 8, 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 supports Bill 18 (2026), CD1, which would make changes to the Bill 7 affordable housing program.
Specifically, the current draft of the bill would allow Bill 7 projects to be built in business zoning districts; increase the 20,000-square-foot maximum lot area to 40,000 square feet; clarify that Bill 7 projects can be built to the height allowed by the underlying zoning district or 60 feet, whichever is taller; and repeal maximum square footage rules for different unit configurations.
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]
Grassroot also appreciates many of the CD2 amendments offered by Chair Tupola and Councilmember Matt Weyer and makes the following comments.
First, Grassroot supports the restoration of language that increases the maximum number of units that can be built in a Bill 7 project, including bonus units for projects built near a high-service bus stop.
That language 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]
Second, Grassroot believes the height limit currently in the bill would provide for a flexible standard that preserves the current program’s 60-feet limit in places where it makes sense and allows taller buildings where they are already permitted.
But if the committee does want to change the height limits, Grassroot believes Councilmember Weyer’s amendment features a simple standard: All Bill 7 projects would have to comply with the height limit set for the zoning district in which they are located; but projects in the Primary Urban Center Development Plan area, a TOD special district or recommended for inclusion in a TOD district would be allowed to be up to 75 feet tall or comply with the underlying zoning, whichever is taller.
Notably, Councilmember Weyer’s amendment is preferable to Chair Tupola’s because it addresses the fact that some special districts — such as various TOD districts and parts of the Chinatown and Waikiki — specify a maximum height greater than the current limit, and it does not make sense to restrict Bill 7 projects to a shorter height than the underlying zoning code allows.
Third, Grassroot appreciates that both drafts increase the floor-area ratio to 5.0, which will give homebuilders more flexibility to maximize the housing potential of a given site.
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 2050 would at least give homebuilders more certainty to plan for future projects.
We also have concerns with two provisions found in the amendments.
Chair Tupola’s draft would add extra rules for Bill 7 projects located in B-1 and B-2 zones, along with parking requirements for projects with more than 60 units. These conditions would undercut the flexibility the rest of the bill is meant to provide.
Likewise, Councilmember Weyer’s amendment would require elevators in any Bill 7 building over 40 feet tall. While well-intentioned, this requirement would significantly increase construction costs and could make some otherwise viable affordable housing projects infeasible.
Grassroot recommends removing both provisions from the final version of the bill.
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.
