The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Honolulu City Council on Feb. 18, 2026.
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Feb. 18, 2026, 10 a.m.
Honolulu Hale
To: Honolulu City Council
Tommy Waters, Chair
Andria Tupola, Vice Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
RE: Bill 18 (2026) — RELATING TO AFFORDABLE RENTAL HOUSING
Aloha Chair Waters, Vice Chair Tupola and other members of the Council,
The Grassroot Institute of Hawaii supports — and offers an amendment to — Bill 18 (2026), which would make changes to the Bill 7 affordable housing program.
Specifically, Bill 18 (2026) would allow Bill 7 projects to be built in business zoning districts; repeal the 20,000-square-foot maximum lot area; clarify that Bill 7 projects can be built to the height allowed by the underlying zoning district instead of a blanket 60-foot height limit; allow more units per building in areas near high-service bus stops in the Honolulu Primary Urban Development Center Development Plan area; 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 program has been an important tool for city homebuilders trying to produce affordable housing, and the expansions proposed in this bill would add much-needed flexibility for homebuilders interested in using the program to reduce Honolulu’s housing shortage.
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 several goals outlined in the city’s 2025-2028 Strategic Housing Plan. One such goal is to “Identify opportunities for maximizing urban land use through adjustments to density standards in the Land Use Ordinance,” and another is “Enhancing predictability for developers is also critical, with a focus on methods to streamline and standardize processes.”[3]
However, Grassroot believes one amendment is necessary to preserve the potential of the Bill 7 program.
Bill 18 (2026) changes the height restriction from a flat 60-foot limit to strictly following the underlying zoning, and this could unintentionally stall or even stop new housing projects in certain areas. For projects already in the permitting pipeline or preparing to break ground, sudden regulatory shifts create uncertainties that could delay financing, increase costs and ultimately discourage much-needed housing.
Grassroot suggests instead adopting a height limit of 60 feet or the underlying zoning, whichever is greater.
This approach maintains the existing 60-foot allowance while still enabling larger projects in areas already designated for higher-intensity development. In short, it provides flexibility without undermining current Bill 7 projects.
Height limits directly affect how many homes can be built on scarce urban land, and decreasing them could result in fewer units, higher per-unit costs and reduced feasibility for workforce and affordable housing projects.
With this critical amendment, Bill 18 (2026) could supercharge the existing Bill 7 program.
Thank you for the opportunity to testify.
Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
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[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.
