Think small to help resolve Kaua‘i’s housing crisis

by Jonathan Helton, Grassroot Institute, September 29, 2023

If Kaua‘i County lawmakers would like to get ahead of the housing crisis curve, they should consider allowing homebuilding on lot sizes smaller than currently allowed.

The simple truth is that larger houses cost more. They require more land, more materials and more labor. As a result, homebuilders sell them for higher prices, and then they appreciate from there. 

Smaller homes offer buyers a chance to spend less and could make a difference for local families trying to afford a home in one of the nation’s hottest real estate markets. 

On Kauaʻi, subdivision homebuilders are required to build 80% of their houses on lots that are 6,000 square feet or larger. And none of them can be built on lots smaller than 4,500 square feet.

The minimum requirement for single-family homes outside of subdivisions depends on the parcel’s zoning, but is generally more than 4,000 square feet of land per home. That could accommodate a home as large as 1,800 square feet — easily enough room for three bedrooms, two bathrooms, a garage and a kitchen. 

Multifamily dwellings such as duplexes and fourplexes also play an important role in making housing affordable, and zoning laws need to be changed to increase the supply of those kinds of dwellings as well. For multifamily dwelling subdivisions, the minimum lot size is 10,000 square feet. Outside of subdivisions, the sizes vary depending on the zoning. 

For both types of homes — single-family and multifamily — the county also mandates “setback” amounts. These require a certain amount of yard space, or that the housing structures be separated from the surrounding properties by a certain number of feet.

Many multi-unit dwellings must be set back at least 25 feet from the front of their lots. Single-family homes generally must be set back at least 10 feet from the front. 

In general, minimum lot sizes and setback requirements force homebuilders to use more land than necessary to build a house. 

Sure, it would be nice if every homeowner could have a big, sprawling yard. But not everyone can afford that much land or the large houses that sit on them. Some people would rather skip the large yard altogether to have a less expensive house. 

So why does the county limit that option and keep these costly rules on the books?

The reality is that lawmakers cannot force houses to cost less. They can only loosen the regulations so less costly homes can be built.

If lawmakers need some examples, various mainland jurisdictions have been experimenting with allowing smaller lots and enjoying positive results. 

Houston, Texas, for example, decreased its minimum lot size requirement about 20 years ago from 5,000 to 1,400 square feet. In 2022, researchers found that the change led to smaller and less expensive homes being built — mainly to the benefit of lower-income homebuyers. 

Auburn, Maine and Helena, Montana, have also changed their minimum lot sizes, and many other cities, such as Dallas and Austin in Texas, are considering such reform. 

For many first-time homebuyers, smaller houses on smaller lots are their best chance at becoming homeowners, allowing them to build equity and wealth for themselves and their children. But such homes just aren’t possible to build or acquire in today’s Kaua‘i housing market.

Instead, zoning laws from a long-ago era thwart housing affordability and expanded homeownership.

It would be a big step forward toward easing Kaua‘i’s housing crisis if county lawmakers would allow homebuilding on smaller lots with smaller setbacks.

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Commentary originally published Sept. 27, 2023, in The Garden Island newspaper on Kaua‘i.