Housing supply and affordability affect nearly every aspect of life in Hawaii.
Ted Kefalas, the Grassroot Institute of Hawaii’s director of strategic campaigns, highlighted that reality while discussing Grassroot’s newly released “Hawaii’s housing policy playbook” with H. Hawaii Media radio host Johnny on Miro Feb. 8.
Kefalas said that housing policy “affects whether young families can stay here, whether businesses can find workers, whether our kupuna can age in place. So, you know, these policy conversations should really matter to everyone here in Hawaii.”
Grassroot’s new “playbook” details 10 housing policy reforms that could be enacted by state and county lawmakers to help alleviate Hawaii’s acute housing shortage.
“Things like getting rid of parking mandates, getting rid of inclusionary zoning, you know, modernizing the building code, streamlining permits and reducing regulatory costs,” Kefalas explained. “None of these are silver bullets individually. But if taken together, they can really make a real difference.”
Regarding parking mandates, Kefalas said that “when the law requires a certain number of parking stalls regardless of demand, there’s no flexibility for homebuilders.” He noted that building a single parking stall has been estimated to cost $68,000, which gets passed onto homebuyers and renters.
Kefalas said homebuilders will still want to offer parking to sell their units — “all we’re saying is give them the flexibility, depending on the project and depending on what the market would bear, to actually build to that rather than some arbitrary number.”
Reducing minimum lot sizes, particularly in urban areas, is another reform that could bring down housing costs, Kefalas explained.
“Land can easily make up 70%, 75%, 80% of the total cost of a home here in Hawaii,” he said. “When the government mandates large lots, it’s essentially mandating high housing prices. Those requirements make it difficult to produce entry-level homes.”
To hear the entire 20-minute conversation between Kefalas and Miro, click on the image below. A complete transcript follows.
2-8-26 Ted Kefalas with host Johnny Miro on the H. Hawaii Media radio network
Narrator 1: It’s time for Sunday morning public access programming on this H. Hawaii Media radio station.
Johnny Miro: Happy Sunday morning to you, I’m Johnny Miro. It’s time for our Sunday morning public access programming on our five H. Hawaii Media radio stations here on the island of Oahu. We have five on Kauai and four on Maui. Important topics discussed.
We’ve got a legislative session that’s just getting underway for 2026. And one of the big items, which is always one of the big items, is housing. Plenty of bills have been brought forth, and like hundreds of them this year. So Hawaii, the housing crisis over here, all right, continues to be one of the biggest challenges facing our state.
And you’ve got the high costs, of course, pushing many local families to leave, making it harder for businesses to retain workers. State lawmakers are actively debating solutions this legislative session. But the question remains: Which policies will actually make housing more affordable?
Joining me today is Ted Kefalas, director of strategic campaigns at the Grassroot Institute of Hawaii. His organization just released a housing playbook outlining 10 practical recommendations for legislators aimed at reducing regulatory barriers, increasing housing supply and ultimately lowering the cost of living in Hawaii.
And this morning, we’ll be talking about some of those proposals and what they could mean for the future of housing across our islands. Big introduction because it’s a big problem, big issue. Good morning to you, Ted.
Ted Kefalas: Aloha, Johnny. Always good when we get to talk about some of these really important issues here in Hawaii.
Miro: And you folks at Grassroot Institute of Hawaii [are] always at the forefront of coming up with solutions, and this is no different. As I just mentioned, Grassroot Institute has just released a housing playbook, all right, for this current legislative session.
What’s the main message, Ted, you want lawmakers and residents to take away from this?
Kefalas: Well, I think the main message is actually pretty simple, Johnny. Hawaii’s housing shortage didn’t just happen. It’s largely the result of policy choices over, you know, many years and decades. We’ve layered on zoning restrictions, permitting delays, building requirements — you have different impact fees and approval processes that just makes building housing here in Hawaii incredibly difficult and, you know, incredibly expensive when compared to other states.
So our housing playbook — I’m a football guy with the Super Bowl coming up later tonight, it’s going to be a great thing. But we thought to our team, “How can we create like a football playbook that just lays out 10 practical reforms that focus on removing those barriers rather than adding, you know, new programs or more red tape?” Things like getting rid of parking mandates, getting rid of inclusionary zoning, you know, modernizing the building code, streamlining permits and reducing regulatory costs.
I will say none of these are silver bullets individually. But if taken together, they can really make a real difference. And I think the key point for residents is that housing affordability touches every part of our lives. It affects whether young families can stay here, whether businesses can find workers, whether our kupuna can age in place.
So, you know, these policy conversations should really matter to everyone here in Hawaii.
Miro: Ted, it’s parking. It’s kind of a roadblock. You don’t hear too much about it, but we’re starting to hear more and more about it thanks to folks at Grassroot. So why does parking policy matter for housing affordability?
Kefalas: Yeah. And you know, parking sounds like a technical issue. But it actually has a surprisingly large impact when it comes to housing costs. So, a parking garage, a typical stall in a parking garage can cost, you know, up to like $68,000 on average. And that cost gets directly built into our rents and our home prices. It doesn’t just go away. And I think importantly, not every resident needs that kind of parking.
Some people rely on transit. Some people share vehicles within the household. You have some neighborhoods that are pretty walkable, you don’t need a car. But when the law requires a certain number of parking stalls regardless of demand, there’s no flexibility for homebuilders.
Now, reforming parking requirements, I know that some people get upset, but it doesn’t mean eliminating parking. In fact, it would not get rid of parking altogether. As developers and homebuilders have shown, they actually want to offer parking in order to sell their units. All we’re saying is give them the flexibility, depending on the project and depending on what the market would bear, to actually build to that rather than some arbitrary number that we came up [with] years ago. So really it’s about, like I said, flexibility and letting communities evolve rather than locking in these outdated assumptions.
Miro: Does that just pertain to mostly the urban or is it also something that would affect the rural areas of the state, as far as parking is concerned?
Kefalas: This, there’s a bill that would be looking really at the urban areas, where you’re looking at building up transit-oriented development and areas in the urban core that are in town. So, you know, people will be taking public transit oftentimes.
You know, I’m somebody that [in] my household, we share a car, and I take the bus every day to work. But yet we have to pay for our parking in our apartment. And so, you know, a lot of that just doesn’t necessarily make sense. And if we’re truly about trying to lower the cost of housing, we shouldn’t be mandating these kind of rules because people’s lives can be very different.
Miro: Ted Kafalas, the director of strategic campaigns at the Grassroot Institute of Hawaii. We’re talking about housing policy, ultimately lowering the cost of living in Hawaii and increasing the housing supply.
And another recommendation you propose is lowering the minimum lot size. Now, what would changing these rules actually mean for housing affordability?
Kefalas: So, you know, that — the idea of changing and reforming our minimum lot size really gets to the biggest cost driver in housing markets here in Hawaii, and that’s land.
So there’s a bill this session, HB 1734, that would limit lot sizes to about 1,200 square feet, again, in urban areas. And I can tell you personally, as somebody who’s been looking to buy a home here, the land can easily make up 70%, 75%, 80% of the total cost of a home here in Hawaii.
And so when the government mandates large lots, it’s essentially mandating high housing prices. Right now, minimum lot sizes are pretty substantial across the state. Those requirements make it difficult to produce entry-level homes.
And so, think of it like this: A 6,000-square-foot lot in Honolulu, that might cost around $1 million. If you could take that lot size down to about 2,000 square [feet], then theoretically the price of the land is going to be much less. And that’s often the difference between somebody being able to buy a home here or not, and having to move.
This isn’t something that’s just theoretical. Houston in Texas actually reduced minimum lot sizes years ago, and the homes that were built on those smaller lots ended up significantly cheaper. I mean in a lot of cases, like 40% cheaper …
Miro: Wow.
Kefalas: … than the older homes. So the bottom line is, this is pretty straightforward. If we want housing to be more affordable, we have to allow land to be used more efficiently.
Miro: This is an interesting one, because more and more we’re hearing about this: manufactured housing. Now that’s sometimes overlooked in policy discussions, but what role could it realistically play in Hawaii’s housing mix, Ted, and what regulatory obstacles currently limit its use?
Kefalas: Well, manufactured housing has evolved a lot over the years. I know a lot of people may think of manufactured or prefab homes as like trailer parks. But modern manufactured homes, they are certified by the U.S. [Department of Housing and Urban Development], so they’re built to a national safety standard.
And the biggest thing is they’re more, way more affordable than a traditional off- you know, site-built home that’s built there on the lot.
So, factory homes, factory-built homes can reduce construction by as much as like 30%. They can be built way faster. And in fact, they sell for about 60% to 65% less than your average or your median single-family home.
So the challenge here in Hawaii isn’t so much the technology. The technology is there, it’s the regulatory environment. Things like zoning rules, design standards and the permitting process — they sometimes treat these manufactured or prefab homes differently, even when they meet safety codes. And so that can really discourage their use.
If we treated these homes like other residential housing, especially on a residential lot, we think it would really expand the home ownership opportunities that are here in Hawaii. Now again, this wouldn’t solve the housing shortage completely. But it can absolutely be part of the strategy to continue chipping away and cutting some of this red tape.
Miro: I’ve been reading about the robotics involved in that and large warehouse in China, and also the 3D printing has this in it’s, you know, that’s what it’s starting to do also.
But most of what the manufactured housing, so far, Ted, has been kind of like imported here. I don’t hear about it actually being built here. So much of it is what we’re bringing in, especially for Maui.
Kefalas: Yeah, and, you know, I know that there has been some conversations from folks looking to start a factory here that would build these sorts of housing.
But again, you know, the regulatory environment here is so difficult, and there’s so many hurdles that, until that gets better, I can’t imagine anyone wanting to create a facility like that.
Miro: Yeah. All right, building codes rarely, rarely make headlines, that you folks have identified them as a key reform area at Grassroot Institute of Hawaii. How could changing Hawaii’s building code help lower costs while still maintaining those safety standards?
Kefalas: Yeah. I mean, building codes, like you said, they’re critical for safety. Nobody wants to compromise that. But inconsistency and the frequent changes, they add unnecessary costs and uncertainty to that.
The problem is that Hawaii does not have a uniform statewide building code. So the counties adopt their own amended versions on their own timelines. And what ends up happening is you have a building that could comply, let’s say on Maui, might not comply here on Oahu. That drives up costs, it slows construction, and it really reduces housing supply because of that uncertainty.
Another thing is these small multifamilies, like those types of homes, think triplex, fourplex — those homes are hit the hardest. And that’s because these are residential buildings, but technically, they fall under the commercial code. And they are right now treated as though they are massive apartment buildings that require things like sprinklers, commercial fire alarms and whatnot.
And so, it’s just, makes it extremely difficult, it makes it extremely expensive if you want to build a triplex or a fourplex. The rest of the country utilizes these types of homes as what’s called missing middle type housing. And we’re not able to tap into that because, you know, in order to create a triplex or a fourplex, you have to put all these additional standards. And those rules can add tens or hundreds of thousands of dollars. It just does not make it feasible.
So there is a bill this year, HB1725, which would really look to change this and create a consistent statewide code. It would put triplexes and fourplexes under the international residential code, not the commercial one. Because, you know, we want to treat these like homes, not necessarily, you know, multifloor condo or apartment complexes.
Miro: All right. Throughout the state, we also have affordability requirements for new housing called inclusionary zoning. Inclusionary zoning. From your perspective, Ted, how had that been working?
Kefalas: Yeah, I mean, inclusionary zoning comes from good intention, right? It’s trying to create affordable housing within new developments. But unfortunately, the economics don’t work. And they actually have some unintended consequences.
If developers are required to sell some units below market price, those costs often get shifted to other units, which raises the prices overall. Imagine if you had a business, Johnny, and you had to sell three out of every 10 of your products at a loss. Well, you’re going to have to raise the prices on the other seven goods in order to make back some money.
And so that’s one of the things that we’re seeing is these market-rate units are actually inflated in cost because we’re paying for these affordable units that meet the affordability requirements.
And so that’s why economists actually suggest focusing first on reducing the regulatory costs directly. Things like the permitting delays, fees, zoning restrictions, so housing becomes naturally more affordable. It’s important that we use tools that actually increase housing supply rather than inadvertently limiting it.
Miro: OK. We’re talking with Ted Kefalas, and he’s with the Grassroot Institute of Hawaii, director of strategic campaigns over there. Permitting delays also, constant complaint from homeowners. Always hear about the [Honolulu Department of Planing and Permitting]. They seem to be getting up to date, though, as best they can.
So it’s constantly being complained from by homeowners and builders. What targeted permanent exemptions or maybe process changes could reduce bottlenecks without compromising oversight?
Kefalas: Yeah. And I’m glad you mentioned DPP. I think everybody here in Honolulu has a DPP story where they’ve been waiting. But it’s important to realize that that’s, it’s not just an Oahu issue.
Permitting delays are in all four counties. Everybody is really dealing with it — some better than others. But this is a problem for the state, really.
And so one area where we think is a real opportunity is with smaller agricultural and rural structures. Things like water catchment systems, greenhouses, barns and even fences. These things are essential for farms to operate, right? But right now, they can sometimes get caught in the permitting process.
Something that’s really — the permitting process is really designed for residential or commercial buildings. I don’t think it’s meant to be holding up somebody that wants to build a 10-foot fence in their backyard. But right now, that’s what’s happening. They’re all going into the same line.
So there’s a bill right now, SB 2743, that would exempt all of these structures that I mentioned from needing a permit. And some folks would question, you know, if these structures are safe if they’re built without a permit.
My thing is farmers and ranchers have every reason to make sure that the structures they build to house their livestock or produce or their equipment is safe. Not to mention contractors can face lawsuits if their work is found to be inadequate. It’s really — this would create clearer exemptions and simplified permits for those structures to reduce delays without reducing public safety.
It also helps permitting departments by letting them focus their time on projects that really, truly require detailed review, like a housing project. And just from the bigger picture perspective, supporting this sort of a bill really helps our agricultural infrastructure and helps local food production.
That’s something I think most residents can agree is important. So this is one of those cases where smarter permitting can help both housing but also our food security goals at the same time.
Miro: All right. Let’s hope so. All right. Finally, Ted, a lot of residents, of course, feel the housing crisis is just overwhelming and out of their control. Lawmakers considering some of the housing reforms you mentioned, possibly, where can people go to stay informed and involved?
Kefalas: Yeah. I mean, I completely understand that feeling. Housing policy can get pretty technical and can be frustrating, you know, for us even a lot of times, and we deal with this on a daily basis.
But the reality is public engagement really does influence the outcomes here in Hawaii, and so we’ve tried to make that a lot easier. If people go visit our website grassrootinstitute.org/action, again, that’s grassrootinstitute.org/action, you can see summaries of a bunch of the housing bills that we talked about along with a host of a few other bills. You can learn about some of our recommendations in the housing playbook that we’ve talked about.
But the really important thing is we’ve made it really easy for people to submit testimony to lawmakers in just a couple of minutes. So you don’t necessarily have to sit there and try to figure it out yourself. I get it. Everybody has, you know, they’re busy working, living their lives. So again, we’ve tried to make it as easy as possible and really just help people stay informed, contact their representatives and just participate in community discussions to help ensure that these policies reflect what everybody needs.
And so I think given how important housing affordability is to Hawaii’s future, it’s really crucial for people to get involved. Because at the end of the day, solving the housing crisis isn’t just about policy experts or developers. It’s about the broader community shaping what kind of future we want for our kids.
Miro: Great stuff from Ted Kefalas with Grassroot Institute of Hawaii. And as he just mentioned, it’s grassrootinstitute.org. grassrootinstitute.org. He’s the director of strategic campaigns over there, does a fantastic job.
I look forward to speaking with Ted once again as we get a little deeper into the 2026 legislative session. Excellent information, Ted. Have yourself a great Sunday. And thanks for joining us once again.
Kefalas: Yeah. Thank you, Johnny. Always a pleasure, and look forward to next time.
Narrator 1: The views and opinions that were expressed on this public access program do not necessarily represent those of the H. Hawaii Media family of radio stations.
Narrator 2: You’ve been listening to H. Hawaii Media’s Sunday morning public access programming. Have a great day.
