More restrictions on Bill 7 housing could defeat bill’s purpose

RE: Bill 53 (2025) — RELATING TO AFFORDABLE HOUSING

Aloha Chair Waters, Vice Chair Tupola and other members of the Council,

The Grassroot Institute of Hawaii opposes Bill 53 (2025), which would impose additional restrictions on the county’s Bill 7 affordable rental housing projects.

These proposed rules would require one parking space for every two units of a Bill 7 project; a presentation before the neighborhood board of the community in which the project is to be built; and the hiring for each Bill 7 project of an on-premises resident manager. 

Individually, each of these proposed new rules would add to the cost of building much-needed housing units.^[1] Together, they could make some projects financially infeasible, which would defeat the purpose of granting homebuilders certain city incentives in exchange for producing affordable housing.

Currently, Bill 7 projects are not required to include off-street parking. The builders are allowed to provide whatever number of parking spaces they believe are necessary for their projects, balancing the marketability of their units with the costs associated with providing off-street parking.

Honolulu’s high land costs mean that each required parking space can add to project costs in one of several ways: acquire additional land for parking spaces; dig to build underground parking stalls; construct podium parking, which consists of parking spaces on an elevated platform built above ground level; or reduce the amount of housing they would otherwise build to accommodate the parking mandate.

A 2020 study commissioned by the Ulupono Initiative found that podium parking in urban Honolulu costs as much as $42,000 per space, while surface level parking can cost as much as $22,500 per space.^[2] A separate 2019 estimate put the cost of underground parking at $48,000 per space.^[3]

These estimates were done five and six years ago, respectively. Those costs are no doubt much higher now, thanks to inflation, increased shipping rates, and other price increases.

Taking a look at the Honolulu Construction Cost Index for highrise buildings, such costs increased by 19% over the past five years, from 267.1 in the first quarter of 2020 to 318.1 in the first quarter of  2025.^[4] Applied to Ulupono’s parking costs, this means each podium parking space could easily cost $50,000.

For a 40-unit project, a parking requirement of one space for every two units would mean 20 parking spaces —  or $400,000 in extra construction costs for the homebuilder.  This could easily result in fewer housing units being built, or none at all.

A required public presentation before an area neighborhood board could also add to project costs. The bill would not require the neighborhood board to approve the project, but negative feedback from a board could cause a homebuilder to reduce the number of units in a proposed project or add features that could increase construction costs.

Finally, requiring a Bill 7 rental project to employ and house an on-site resident manager would also add to project costs. Glassdoor, a company that matches employees with employers, notes the median pay for a property manager in Honolulu is $72,000 a year.^[5] Across a 15-year period, this cost could be substantial.

For all these reasons, Grassroot asks that the Council reject Bill 53.

Thank you for the opportunity to testify.

Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
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^[1] “Hawaii Housing Planning Study 2024,” prepared by SMS Research and Marketing Services, Inc., FSR Consulting LLC and Ward Research, Inc. for the Hawaii Department of Business, Economic Development and Tourism, Table 39A, p. 124. According to the study, Honolulu needs 25,710 new units built between 2023 and 2027 to keep up with demand.
^[2] “The Costs of Parking in Hawai‘i,” prepared by PBR & Associates for the Ulupono Initiative, August 2020, p. 3.
^[3] Kathleen Rooney and Donald Shoup, “There’s No Such Thing As Free Parking,” Civil Beat, Dec. 9, 2019.
^[4] “Quarterly Statistical & Economic Report,” Hawaii Department of Business, Economic Development and Tourism, 2nd Quarter 2025, Table E-7, p. 108.
^[5] “How much does a Property Manager make in Honolulu, HI?” Glassdoor, accessed Aug. 4, 2025.