HB814 HD1: 30-year-ownership requirement undermines zoning reform

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the House Committee on Finance on Feb. 24, 2023.

February 24, 2023
10 a.m.
Conference Room 308
Via Videoconference

To: House Committee on Finance
       Rep. Kyle T. Yamashita, Chair
       Rep. Lisa Kitagawa, Vice Chair

From: Grassroot Institute of Hawaii
           Ted Kefalas, Director of Strategic Campaigns


Comments Only

Dear Chair and Committee Members:

The Grassroot Institute of Hawaii would like to offer its comments on HB814 HD1, which would require counties to adopt ordinances allowing religious institutions, educational institutions and medical institutions to build housing units on their own land for purchase in fee simple or for use by the institutions, their employees, or their contractors, regardless of current zoning restrictions.

We commend the Legislature for considering ways to increase Hawaii’s housing supply through zoning reform. It is important to recognize the role that zoning plays in restricting housing growth, and to think creatively about how we can streamline building permissions and approvals for new housing.

This bill proposes one such creative approach. By allowing schools, hospitals and religious institutions to create housing on their own properties, this legislation would simultaneously help them with their recruitment and retention issues by enabling them to more easily provide affordable housing for their employees.

Nonprofit institutions that have been prevented from creating housing for their own staff would be able to offer a convenient on-campus housing benefit, thereby freeing up more housing for local families.

By limiting the acreage and use of the housing, this bill should ease any concerns  that the institutions would take advantage of the by-right housing initiative to create large developments.

In addition, there is no need to fear that the inclusion of residential properties next to these institutions would cause any health or safety concerns, nor would it disturb the intent of any county or municipal plans.

In fact, mixed-use zoning, such as allowing residential construction in commercial zones, is a popular tool for encouraging the growth of housing without requiring large-scale development.

For more information on the ways that zoning can throttle the growth of housing, please refer to the zoning reform toolkit, “How to Build Affordable, Thriving Neighborhoods,” produced by the State Policy Network, which explores different ways to grow housing and improve affordability by reforming state and local zoning restrictions. If you would like us to provide you a copy of that report, please let me know.

We are pleased that HB814 embraces two principles in the zoning toolkit:

>> It allows for creative options aimed at solving serious social problems related to housing — especially as housing from such institutions will likely be aimed at better serving local communities or helping those with the greatest need.

>> It reduces the bureaucratic burden involved in building such housing by allowing those institutions to construct that housing regardless of local zoning laws.

We do have one concern about the bill in its current form. Since we testified on it earlier, it has been amended to require the institutions to own housing units for 30 years before offering them for sale.

The intent of this amendment is to prevent organizations from profiting off of the construction of housing, but we fear that this addition would frustrate the goal of the bill as a whole.

It must be stressed that the organizations given this right are nonprofits using their own land, and that their ability to profit in a general sense is thereby constrained. In addition, even if the organizations providing housing via this bill were to obtain some financial benefit from doing so, that should not be seen as a negative, if the outcome is to create more affordable housing for Hawaii residents.

If enacted with the 30-year sale constraint, this bill would create an unnecessary barrier that could discourage nonprofit organizations from building these units, possibly forcing them into a landlord relationship that they are unable or unwilling to maintain.

Nonetheless, the general intent of this bill is a good one. By allowing religious, medical and educational institutions to build affordable housing on their own lands, regardless of existing zoning restrictions, this bill would take a positive step toward addressing the state housing shortage.

Thank you for the opportunity to submit our comments.


Ted Kefalas
Director of Strategic Campaigns, Grassroot Institute of Hawaii


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