Increasing apartment floor-area ratios could create more housing

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Honolulu City Council Committee on Zoning & Planning on Feb. 5, 2026.
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Feb. 5, 2026, 9 a.m.
Honolulu Hale

To: Honolulu City Council Committee on Zoning & Planning
       Esther Kiaʻāina, Chair
       Tommy Waters, Vice Chair

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

RE: Bill 5 (2026) and Bill 6 (2026) — RELATING TO DEVELOPMENT STANDARDS IN THE APARTMENT AND APARTMENT MIXED-USE DISTRICTS

Aloha Chair Kiaʻāina, Vice Chair Waters and other members of the Committee,

The Grassroot Institute of Hawaii supports — and offers amendments to—Bill 5 (2026) and Bill 6 (2026), both of which would amend development standards for the apartment and apartment mixed-use zoning districts.

Grassroot believes these bills could unlock a range of new housing opportunities for Honolulu residents and would result in more plentiful, affordable housing.

In particular, both would reduce the minimum lot sizes for these districts and increase floor-area ratios. The floor-area ratio for a property is currently calculated using a complicated formula tied to the size of the lot and the zoning district. Table 1 below shows the current maximum FARs by zoning district compared to the new ratios proposed in the bills.

                        Table 1: Current and proposed maximum floor-area ratios

A greater floor-area ratio means more building square footage can be built on a parcel. Increasing these ratios is critical because Honolulu needs more housing units. According to the 2019 Hawaii Housing Planning study, Honolulu needed 22,168 new units between 2020 and 2025.^[1] A 2024 update to the Hawaii housing planning study estimated that Honolulu needs 27,710 new units built between 2023 and 2027 to meet demand.^[2]

For homebuilders to justify buying a property and replacing aging buildings, they must be sure the project can be profitable.

Grassroot analyzed the potential impact of this bill by identifying apartment and apartment mixed-use parcels that have buildings 50 years old or older, none of which is designated as a condominium unit.^[3] We identified 1,230 such parcels in the A-1, A-2, A-3 and AMX-2 zones, and the results are shown in Table 2.

                        Table 2: Current actual and legal average floor-area ratios

Increasing the allowable floor-area ratios could move some projects from questionably to realistically profitable. Consider a 10,000-square-foot A-2 lot where a 1,500-square-foot, 70-year-old single-family home now sits. The land value of that property could easily be $1 million.

If a homebuilder acquired that property, current FAR limits would allow up to 13,000 square feet of building area,^[4] with a land cost per square foot of $79.

On the other hand, increasing the allowable FAR for that parcel to 3.0 would increase the amount of building area to 30,000, which would lower the land cost per square foot to $33 — a more than 50% reduction that could help the project pencil out.

Although both bills would improve the financial feasibility of infill projects, there are minor differences between them that are worth noting:

>> Each bill would reduce the minimum lot sizes for apartment and apartment mixed-use zones, but Bill 5 (2026) would eliminate the minimums completely for A-3 and AMX-3 zones.

>> Bill 5 (2026) would reduce the minimum lot widths and depths from 70 feet to 45 or 50 feet, depending on the zone, while Bill 6 (2026) would reduce the lot widths and depths from 70 feet to 60 feet. 

>> Bill 6 (2026) would set the maximum building area at 60% of the lot area for all apartment zones and all lot sizes, while Bill 5 (2026) would keep the current building area limitations, which impose stricter maximum building areas on larger parcels.

Grassroot believes that Bill 5’s adjustments to the minimum lot areas and lot widths and depths should be combined with Bill 6’s maximum building area changes.

The resulting legislation would give homebuilders greater flexibility in constructing apartment units in these zones that are already selected for higher-density development.

Lastly, Grassroot requests that the FAR for A-2 and AMX-2 parcels be increased to 4.0.

A-2 parcels with older, non-condominium dwellings make up 80% of the properties Grassroot reviewed. Allowing more density in those areas would help ensure that new housing comes on line at a quicker rate.

Thank you for the opportunity to testify.

Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
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^[1] “Hawai’i Housing Planning Study, 2019,” prepared for the Hawai’i Housing Finance and Development Corporation by SMS Research and Marketing Services, Inc., December 2019, p. 56.
^[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] Data from Hawaii Information Service’s Multiple Listing Service, which requires a subscription to access. Reviewed tax year 2024 parcels with condominiums and properties without year built information excluded.
^[4] Calculated by multiplying the lot size (10,000 square feet) by the current A-2 FAR calculation (FAR = 0.00002 x lot area + 1.1).