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Honolulu City Council members must implement a controversial state bill that they said would ruin residential neighborhoods and was an overreach by the state.

Senate Bill 3202 allows neighborhoods to be built more densely, permitting at least two accessory dwelling units on residential lots occupied by single family homes starting in 2027.

Gov. Josh Green signed the bill into law last month, flanked by advocates such as Sterling Higa from Housing Hawaii’s Future, Ted Kefalas from the Grassroot Institute of Hawaii and U.S. Sen. Brian Schatz.

Opponents fear the change will encourage developers to buy up lots and build more densely while not actually reducing the price of housing. 

Supporters say that the additional housing supply would contribute to bringing down prices, even if it’s not a silver bullet.

Counties are now required to make the new law a reality, to the dismay of Honolulu City Council members. In March, they voiced their objections during a two-and-a-half hour and then issued . Language in the resolution’s original version, which council members removed, warned of “slum”-like conditions and “the proliferation of disease vectors.”

State lawmakers passed the bill anyway.

The bill’s sponsor, Sen. Stanley Chang, defended its substance and pointed to other locales where increasing the supply of housing contributed to lower prices. He said the perceived negative impacts are overblown, even if the outcry was predictable.

Now, council members must figure out how to regulate the new development allowed by the bill. They say that more housing would be a good thing, but that level of density envisioned by the bill is only suitable for certain areas. 

The council had already been considering allowing more density on residential lots, council member Esther Kiaʻāina said. 

“Ours does more to incentivize multigenerational family and deter outside investment,” she said. 

Densifying To Increase The Supply Of Housing

Supporters say that Hawaii’s high cost of housing is fundamentally an issue of supply and demand: increase the supply, and prices should fall. 

Opponents say that demand from around the world far exceeds whatever new supply can be built. Offshore investors would snatch up any new supply anyway, they say. 

Chang disagrees. 

“There are many other jurisdictions in the world that have high housing demand – like Singapore, like Houston, like Vienna, Austria – that do consistently build enough housing to meet demand. And they do it in a variety of ways,” Chang said. 

Encourating greater residential density is one, he said. 

Jurisdictions around the country are taking this approach to increase housing supplies. New York Mayor Eric Adams is pushing to allow more housing in more places through his City of Yes campaign, which has also riled some residents, .

Chang pointed out that accessory dwelling units are already allowed on many residential lots, but that few people take advantage of it. This just gives people one more option among many for building more housing, he said.

A different state bill passed this year requiring counties to implement rules , something that the Honolulu City Council considered last year but never passed.

What’s notable this time is the extent of local opposition: Honolulu council members voted 8-1 to oppose the requirement, arguing that they already are working to increase the supply of housing and that the state law was an overreach. 

Council member Andria Tupola was the only one to not oppose the state law. That’s because the state bill was still being worked on at the time, and she said she wanted to let the process play out first.

It was also controversial .

Most bills pass almost unanimously during their final votes, but Senate Bill 3202 passed 16-9 in the Senate and 29-22 in the House.

Private Meetings

State lawmakers knew that the counties might resist. 

They held a handful of private, informal meetings during the session whose invitees included the housing committee chairs, county council chairs and planning department heads.

“People can be more candid in a meeting like that with their concerns,” House Speaker Scott Saiki said. 

Saiki said that it’s unusual to hold private meetings like this when crafting a bill. Housing bills go through the Legislature every year without as much fanfare.

But this bill’s focus on zoning, which can have more of a visible effect on neighborhoods than infrastructure or funding, made it different from previous state efforts to help build more housing, he said.

“That’s why this bill was really different. And that’s why it generated so much interest. And that’s why we had to spend extra time working with all of the counties on the final version,” he said. 

But public officials shouldn’t negotiate bills behind closed doors, Common Cause Hawaii’s Program Director Camron Hurt said. He objects to the process even though he supports the bill’s intent.

“Why can’t you express yourself in public? That is a question that every civil servant who is not stepping into the light of transparency needs to ask themselves,” he said.

Housing can be a contentious issue, but that doesn’t mean officials should avoid public input, he said.

“They feel like they have the ordained right to carry out the business of the state by non-transparent means, because the citizenry would just react too harshly to it or they just wouldn’t understand,” he said.

‘I’m In No Rush’

The bill tries to address something that the Honolulu City Council is already working on, Kiaʻāina said.

One accessory dwelling unit and one ohana unit would be allowed on residential lots as part of the council’s revamping of the island’s land use ordinance, which dictates everything from the height of wind turbines, where housing can go and where beekeepers can keep their bees.

This is different from the state’s requirement of allowing two accessory dwelling units per lot because an ohana unit would be restricted to the main house owner’s family members. 

It would do a better job of keeping locals on-island than allowing three unrelated families to live on the same lot, Kiaʻāina said. She thinks this change to the land use ordinance amendment could fulfill the state’s requirement anyway.

But Hurt, from Common Cause Hawaii, said that the state’s version could be better at promoting equity since it isn’t restricted to helping people whose families can afford to build an addition on their house.

“I’m in no rush to draft legislation to implement that bill,” Kiaʻāina said, adding that she plans to hold an informational briefing as the 2027 deadline gets closer. 

In the meantime, the council hopes to finish work on the land use ordinance over the coming months to allow more density in areas zoned for apartments. That’s another requirement in the state’s bill. 

Currently, more density is allowed in some residential zones than in some apartment zones. That helped promote the building of so-called monster homes with more than 20 bedrooms in quiet neighborhoods, council member Tyler Dos Santos-Tam said. 

He’s been thinking about this issue since before he was elected in 2022, and introduced a resolution with Kiaʻāina telling the city’s Department of Planning and Permitting to start thinking about .

Council members say they want to increase density, but only in certain areas. They are concerned that allowing at least two accessory dwelling units in all residential districts would overwhelm existing infrastructure. 

The bill’s final version addresses this by allowing county planning departments to reject accessory dwelling unit applications if utility infrastructure is lacking. Councils can also restrict these new units to certain regions that are close to transit options and main urban roads. 

Council members seem more opposed than the city planning department, which makes sense since council members are often the ones to hear community opposition, Saiki said.

Balancing housing creation with infrastructure capacity is an important task for all levels of government, DPP Director Dawn Takeuchi Apuna said in a March council hearing.

“I think the state or Legislature just wants to see it done quickly,” she said.