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Allowing smaller lots and homes would benefit families, promote affordability

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Honolulu City Council Committee on Planning and the Economy on March 21, 2024.
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March 21, 2024, 9 a.m.
Honolulu Hale

To: Honolulu City Council Committee on Planning and the Economy
      Esther Kiaʻāina, Chair
      Radiant Cordero, Vice-Chair

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

RE: OPPOSITION to RESOLUTION 24-65 — EXPRESSING THE HONOLULU CITY COUNCIL’S STRONG CONCERNS RELATING TO HOUSE BILL 1630, H.D. 1, AND SENATE BILL 3202, S.D. 2, RELATING TO URBAN DEVELOPMENT

Aloha Chair Kiaʻāina, Vice-Chair Cordero and other members of the Committee,

The Grassroot Institute of Hawaii would like to offer its comments in opposition to Resolution 24-65, which would express the Council’s opposition to HB1630 HD1 and SB3202 SD2.

These two measures would increase our housing supply not only on Oahu but throughout all of Hawaii by allowing smaller homes on smaller lots. This would help lower housing costs and remove the need for many Hawaii residents to move to the mainland in search of more affordable housing.

Contrary to some rumors, this bill would not legalize so-called monster homes in Hawaii, and it would not overburden water and wastewater infrastructure.

In fact, this bill would actually be the antidote to monster homes.

By legalizing smaller homes on smaller lots, the HB1630 HD1 draft would allow only one more accessory dwelling per lot than is currently allowed under Honolulu zoning code. Under the bill, homeowners could build two ADUs on their lots instead of one.

Allowing these smaller homes on smaller lots would mirror a powerful approach many states and cities across the county have already used to increase housing supply. These include Minneapolis, Minnesota; Houston, Texas; Milwaukee, Wisconsin; and Columbus, Ohio, as well as the entire states of California and Montana.[1]  Auckland, New Zealand, is a good international example.[2]

All of these places have upzoned their residential areas to allow greater housing density on lands already zoned for housing — and the research indicates these changes work. They have increased supply and lowered home prices.[3]

Incidentally, this is not a new idea for Hawaii. In 2004, Honolulu adopted a Primary Urban Center Development Plan that was intended to promote additional housing choices. One main policy in that plan was to improve the feasibility of redeveloping small lots.[4] Twenty years later, we are still having the same conversations because of continued inaction by the previous Councils.

Perhaps because we didn’t adopt this policy 20 years ago is why we find ourselves grappling with monster homes now. Monster homes exceed or push the legal limits of large single lots. Smaller, more affordable units built on reduced footprints, with appropriate setbacks and height limits, are a reasonable way to increase the number of housing units while disincentivizing the construction of monster homes.

As the Grassroot Institute of Hawaii pointed out in its recent report, “How to facilitate more homebuilding in Hawaii,” smaller lots would reduce project costs and homebuilders would find it financially feasible to build smaller, less expensive homes.

Multigenerational families would also benefit. There are many instances today where you have tutu, mom, dad and adult children living under one roof. This bill would allow the homeowner to construct two ADUs so that everyone could have their own space.

Regarding the concerns about adequate infrastructure, HB1630 HD1 and SB3202 SD2 already address these concerns by allowing counties to “reject a permit application for development on the residential lot if the county determines there is insufficient infrastructure for the development.”

In light of these myths and the real benefits these bills would bring to Honolulu residents, we would urge the committee to defer this resolution — at the very least, remove the language requesting an exemption for the City and County of Honolulu.

Thank you for the opportunity to testify.

Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
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[1] Laurel Wamsley, “The hottest trend in U.S. cities? Changing zoning rules to allow more housing,” NPR, Feb. 17, 2024.
[2] Ryan Greenaway-McGrevy, “Can Zoning Reform Reduce Housing Costs? Evidence from Rents in Auckland,” University of Auckland Business School, Economic Policy Centre Working Paper No. 016, June 2023.
[3] Christina Plerhoples Stacy, Christopher Davis, Yonah Freemark, Lydia Lo, Graham MacDonald, Vivian Zheng and Rolf Pendall, “Land-Use Reforms and Housing Costs,” Urban Institute, March 29, 2023; and Vicki Been, Ingrid Gould Ellen and Katherine M. O’Regan, “Supply Skepticism Revisited,” New York University Law and Economics Research Paper forthcoming, Nov. 10, 2023
[4]Primary Urban Center Development Plan,” Department of Planning and Permitting, City and County of Honolulu, June 2004.

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