The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the House Committee on Finance on Feb. 24, 2025.
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Feb. 24, 2025, 2 p.m.
Hawaii State Capitol
Conference Room 308 and Videoconference
To: House Committee on Finance
Rep. Kyle T. Yamashita, Chair
Rep. Jenna Takenouchi, Vice-Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
RE: HB1409 HD1 — RELATING TO TRANSIT-ORIENTED DEVELOPMENT
Aloha Chair Yamashita, Vice-Chair Takenouchi and other members of the Committee,
The Grassroot Institute of Hawaii supports HB1409 HD1, which would encourage the construction of higher-density buildings in county-established transit-oriented development zones or districts.
Specifically, the bill would prioritize funding from the Hawaii Housing Finance and Development Corp. to projects in TOD areas, as long as the county where the project is proposed allows permits for such projects to be processed ministerially, and as long as the county allows certain levels of density in its TOD areas.
These density levels would range from a floor-area ratio of 4.0 to 7.0 or the maximum FAR allowed by the county’s TOD district or plan, depending on where the project would be located in the TOD zone.
This bill could have positive implications for Hawaii’s housing market.
By encouraging dense, walkable neighborhoods in areas well-served by transit — such as near the Skyline — this bill would make Hawaii more vibrant and connected.
As Grassroot pointed out in a 2023 policy brief, “studies show that walkable neighborhoods also yield positive health outcomes. People lose weight, cardiovascular disease declines, and people report being happier.”[1]
Economically speaking, it makes sense to build more housing in urban areas because water and wastewater infrastructure is usually already present, which could help lower capital expenditures for state and local governments.
Furthermore, individuals who have good access to transit can realize lower transportation costs. Research has found that households living in TOD areas in California save $429 a year on transportation — equal to about 6% of the households’ annual transportation spending.[2] For Hawaii families struggling with the high cost of living, any reduction in transportation spending would be a benefit.
The ministerial — otherwise known as by-right — permitting process proposed by the bill would make these types of developments more feasible.
According to The Economic Research Organization at the University of Hawai‘i, Hawaii’s housing regulations are the strictest in the country, and “approval delays” for housing developments are three times longer than the national average among communities surveyed.[3] Likewise, UHERO researchers estimated that regulations comprise 58% of the cost of new condominium construction.[4]
UHERO has also pointed out that “by-right development ordinances have the potential to speed project approval and substantially reduce project costs by reducing opportunities for neighborhood opponents of specific or all affordable housing projects to stop their development.”[5]
Likewise, increasing legal densities in TOD zones will support the creation of more housing units, helping projects pencil out and adding much-needed units.
Thank you for the opportunity to testify.
Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
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[1] Jonathan Helton, “How to facilitate more homebuilding in Hawaii,” Grassroot Institute of Hawaii, December 2023, p. 16.
[2] Hongwei Dong, “Evaluating the impacts of transit-oriented developments (TODs) on household transportation expenditures in California,” Journal of Transport Geography, Vol. 90, January 2021.
[3] Rachel Inafuku, Justin Tyndall and Carl Bonham, “Measuring the Burden of Housing Regulation in Hawaii,” The Economic Research Organization at the University of Hawai‘i, April 14, 2022, p. 6.
[4] Justin Tyndall and Emi Kim, “Why are Condominiums so Expensive in Hawai‘i?” The Economic Research Organization at the University of Hawai‘i, May 2024, p. 11.
[5] Carl Bonham and Sumner La Croix, “The Maui County Comprehensive Affordable Housing Plan: Understanding its Pros and Cons and Ideas for How to Improve it,” The Economic Research Organization at the University of Hawai‘i, Oct. 21, 2021, p. 5.
