ADU growth will help ‘keep the country country,’ Helton tells Miro
from Grassroot Institute of Hawaii, October 31, 2024
Hawaii took a significant step in addressing its housing crisis during the 2024 legislative session by enacting SB3202 as Act 39, which mandates the state’s four counties allow at least two accessory dwelling units per residential lot. But what does this law mean for local neighborhoods, and how is its implementation unfolding in the counties?
Addressing concerns about increased neighborhood density, Grassroot policy researcher Jonathan Helton told host Johnny Miro of the H. Hawaii Media radio network during an interview this past Sunday that “an ADU is not going to be some sort of luxury mansion. It’s intended to be a smaller home that maybe someone who is moving back or maybe a teacher or another essential worker — they’re trying to look for a place to rent that’s going to be less expensive.”
He noted that “resistance to change in one’s neighborhood is natural, but change is necessary if we’re going to make a dent in the housing crisis.”
In addition, he said “one of the reasons we wanted to focus on legalizing more accessory dwelling units is that Hawaii has a limited amount of land,” He said ADUs offer a way to increase the housing supply without “paving over paradise.”
Meanwhile, Helton reported that both Kauai and Hawaii County are already compliant with the law, with Kauai allowing at least two ADUs per residential lot, and Hawaii County passing a bill in September that permits up to three ADUs per lot and removed redundant permitting requirements. He said Honolulu and Maui counties are still developing their approaches to meet the law’s requirements.
TRANSCRIPT: 10-27-24 Jonathan Helton on Johnny Miro
Johnny Miro: Another beautiful Sunday morning and it’s time for public access programming here on our five Oahu radio stations and five Kauai radio stations within the family of H. Hawaii media.
I’m Johnny Miro, and we have another important topic here locally, and we’ll be discussing that with one of the policy researchers at Grassroot Institute of Hawaii, and it will be Jonathan Helton.
The state Legislature recently passed a sweeping bill to legalize more accessory dwelling units in the island’s residential areas. The bill, though, left it to the counties to implement these changes into their zoning codes.
So we’re going to find out through Jonathan Helton what kind of progress are they making currently. So joining me right now this Sunday morning, policy researcher at the Grassroot Institute of Hawaii, Jonathan Helton. He joins me to discuss these questions and a whole lot more about accessory dwelling units.
All right, happy to have you along this Sunday once again, Jonathan. I know you’re very very very busy these days.
Jonathan Helton: Good morning to you, and I’m happy to be here, happy to talk about this topic.
Miro: Can you remind listeners, Jonathan, what exactly this housing bill did? I kind of lost track of that myself and what an accessory dwelling is.
Helton: So, to answer the first part of your question, Gov. Green signed SB3202, which is Act 39, earlier this year. It ended up being a pretty controversial bill that the Legislature passed by a pretty close vote.
And what the bill did, in a nutshell, was the state told counties, “You have until 2026 to legalize two accessory dwellings per lot.” So what is an ADU? That’s the question. What’s an accessory dwelling?
Some people call them granny flats, some people call them ohana units, some people call them something as simple as a backyard cottage. An ADU tends to be something that is either attached onto the primary dwelling or is maybe in the backyard. It tends to be much smaller, maybe one bedroom, maybe two small bedrooms.
It’s something that might have been referred to years ago as a starter home — a very small house for a family that might be starting out or even someone looking to downsize.
Miro: All right. So Jonathan, why is this approach important?
Helton: This was probably the biggest question that got brought up when this bill was being debated — is why do we need to focus on building more housing in existing neighborhoods? So, there’s a couple of things.
Number one, I think it’s pretty clear to everyone that Hawaii does have a housing crisis. A lot of that is because Hawaii doesn’t build a lot of new houses, and the demand to live here is really high. For people who are working maybe two jobs, trying to start a family, trying to afford rent, or even if they’re a little further on trying to afford a down payment on the mortgage, it’s really hard. So we do need to have more housing options.
Why ADUs?
Well, one of the reasons we wanted to focus on legalizing more accessory dwelling units is that Hawaii has a limited amount of land, and so much of Hawaii’s beauty, and what makes Hawaii Hawaii is the past of having agricultural land and not being completely developed. If all of Oahu was a big subdivision, that wouldn’t be what it is now. Right?
I think that it would lose a lot of its charm for both visitors, but I think more importantly for the people who call Oahu home.
So we need to be smart when we’re trying to look at where we need to enable more housing. And one of those options is to allow homeowners to build accessory dwellings in their backyard. They might be able to rent maybe to someone that they know or they’re related to or even to someone that they don’t know.
And that’s one of the biggest reasons and we want to focus on that. So, by allowing someone to build an extra unit or two extra units in their backyard, that’s going to allow them to build wealth as well, and that’s some wealth that they may be able to share with their children.
If they’re able to build a second unit, their kids can maybe come back from the mainland, get a foot in the door in Hawaii, maybe they’re renting at a lower rate and afford to stay here, or afford to come back.
So, you know, change is always hard. And I think we’ve talked about this before — it’s hard to see a neighborhood changing. But if change doesn’t happen, the neighborhood is going to decline. And change is necessary if we’re going to make a dent in the housing crisis.
Miro: I’m sure there’s going to be listeners that are concerned about the sizes of these ADUs. We’ll get to that, so be patient for that as Jonathan Helton, policy researcher at Grassroot Institute of Hawaii, joins me this morning. I’m Johnny.
What sort of progress are the counties making on implementing this bill? We have of course four to speak of, so let’s start with Hawaii Island.
Helton: Hawaii Island, they passed a really good bill, I believe it was in September, and this bill has been signed into law by the mayor. So I’ll give you a quick rundown of what it does.
Bill 123, it did three important changes.
So the first thing it did is it abolished a duplicative permit. Normally, if you’re going to build an ADU, you’re going to need a building permit. It takes a very long time to get a building permit in all of the counties.
But Hawai‘i County, before this bill, they had a separate permit. So not only did you need a building permit for your ADU, you needed something that they called an ohana permit. You had to get the ohana permit first, so that just added an extra delay for anyone looking to build one of these. So the bill’s gotten rid of that.
The second thing the bill did is it put Hawai‘i County into compliance with this new law. It said if you are building an ADU in the state urban land-use district in general, you’re going to be allowed to build three ADUs per lot.
Three ADUs per lot it does seem like a lot. Now, that’s naturally going to be limited. Hawaii County does need to work on upgrading its infrastructure, which I’m sure we can talk about a little bit later. But that’s the legal limit — three per lot.
Then what the bill did is it said you can build three per lot, but the size of the ADU, there’s going to be a cap on that. So the cap is 1,250 square feet per ADU. So someone can’t come in and build an ADU and make it into some sort of monster home and say, “Oh this is just an accessory unit.” No, there’s a cap on how big it can be.
Miro: So that’s 1,250 square feet, three ADUs per lot, and a subtraction of the permits needed. That’s what Bill 123 addressed for Hawaii Island.
Now let’s speak of Honolulu right now.
Helton: Right now in Honolulu, everyone is allowed to build one ADU per lot if you live in a residential area. The maximum size of the ADU can be 800 square feet, although the maximum size might be smaller if you have a smaller lot. So again, there’s already a cap in place.
Now, there is a rule in Honolulu that if you’re going to build an ADU, you as the owner of that property have to live in either the ADU or the primary home. So, just keep that in mind. Those are two of the main requirements.
And there’s a second thing in Honolulu called an ohana unit.
Now, in the introduction, I said that an ohana unit and ADU were usually considered the same thing, and they are. In Honolulu, there is a legal difference. You don’t have to rent an ADU to someone who’s related to you. But if you’re going to build an ohana unit in Hawaii, you do have to either rent it to someone you’re related to or just let someone you’re related to live there. That is a bit of nuance.
So what’s going to change in Honolulu? We’re not sure yet because the Council hasn’t passed anything. Currently, there is a bill — it’s called Bill 64 — and it would rewrite all of Honolulu’s zoning code. So really huge, really complicated, deals with a whole lot of things other than just ADUs and backyard cottages and ohana units.
But part of the bill does deal with them. So here’s what that part of the bill would do:
First, it would allow one ADU and one ohana unit on the same lot. So, that gives you your two accessory units in compliance with the state law.
And the second thing it would do is remove what we call the owner-occupant requirement for an ADU. This means that you no longer have to live in either the ADU or the primary dwelling if you want to build one.
I’ll give you an example of that. If someone is in a place financially where they might own two different lots on Oahu — maybe they live in one and they rent out the other one — this would enable this person to build an ADU on the other lot they don’t live on and be able to rent both the ADU and their primary dwelling.
The third thing it does is relatively minor, but it does make changes to how many parking spaces you have to build if you’re building near a bus stop.
So, those are the three things there.
Miro: All right. Let’s move on to Maui County.
Helton: Oh yes, real quick, I did want to mention one thing that Honolulu has done, and this is existing law: They have incentives for ADUs. And we’ll talk about what Maui has in terms of incentives. But if you’re looking to build an ADU right now [in Honolulu], they do give you sort of a timeline for getting your building permit. You should be able to get your building permit within 60 days, which is really good. If you’ve ever tried to build something in Honolulu, 60 days is getting your building permit pretty quick.
And the second incentive they have for building an ADU is that they will waive up to $10,000 of your fees. So if you need to connect your ADU to sewer, to water, have to pay those building permit fees, up to $10,000 of those will be waived. So the city has already had some things in place to encourage people to build them.
So, yeah, we can move back to Maui now.
Miro: Back to that — so it’s 800 square feet for Honolulu?
Helton: Yeah.
Miro: OK, so for the ADUs or the ohana units, 800 square feet is the max. All right, let’s move to Maui County.
Helton: Looking at Maui, the current law depends on the island. So there’s different rules for Maui and then there’s a different set of rules for Lanai and Molokai.
So on Maui, it’s pretty simple: If your lot is smaller than 7,500 square feet, you can build one ADU. If it’s bigger than that, you can build two.
And then, on Lanai and Molokai, the rule is you can build one ADU per lot if the lot is 7,500 square feet or bigger.
So that’s the current rule. Just like [on] Hawaii and [in] Honolulu, the size of the ADU is limited. The maximum size an ADU can be is 500 square feet. And I’ve looked at some models. Typically that’s a one bedroom. It might be built as a studio. You can fit two bedrooms in a 500-square-foot dwelling — they’re going to be smaller. That 500 square feet is the maximum on Maui and in all the islands in Maui County.
What’s Maui looking to change? They haven’t changed anything yet on those rules, but they have proposed a resolution that would introduce a bill. If anyone is interested, that’s Resolution 24-143.
So what that resolution and draft bill would do is something very simple: It would just allow two ADUs on all residential lots. It wouldn’t be based on how big your lot was. It would just be, you have a residential lot — two ADUs.
Maui right now also has incentives, just like Honolulu, for building an ADU. So they passed this Ohana Assistance Program in 2023. And what it does is give homeowners up to $100,000 in a grant if they agree to build an ADU and then rent it at an affordable rate or a workforce rate for 10 years.
So this is another thing that the county is trying to say, “Hey, we realize we need more housing, and so we’re going to partner with not just big developers to build giant new subdivisions or big condominiums. What we’re going to do is partner with individual homeowners to help them contribute to reducing our housing crisis.”
And so that grant is optional. If someone doesn’t want to take the money, they don’t have to. The money is of course limited, so not everyone who wants to build an ADU with the grant money is probably going to get the grant, but it is an option for people who are looking at building a backyard cottage.
Miro: So there is a plan in the works to get rid of the square footage for the lots as far as the amount of ADUs? They want to try to get rid of the smaller than 7,500 and just say you can build two ADUs on a lot regardless of the size — is that what they’re working on?
Helton: Yes.
Miro: OK.
Helton: So, for context, a lot of the lots on Maui are 6,000 square feet, and so they can only have one ADU. This bill would allow them to build up to two, as long infrastructure supported the ADU and whatnot.
Miro: And they’re at 500 square feet per ADU, right?
Helton: Yes. That’s the maximum.The bill doesn’t change that. If your lot is smaller than 7,500 square feet, typically the ADU has to be even smaller than 500 square feet.
Miro: All right, let’s move over to the Garden Isle, see what Kauai has in the works.
Helton: All right, just to say this first, Kauai has a really really complicated zoning code, so I’m going to do the best I can to explain it clearly.
Right now on Kauai, two dwellings are allowed on all residential lots already. And, you can also build what they call an additional rental unit per dwelling on the lot.
What does that mean, per dwelling on the lot?
That means if you have two dwellings on your lot, you can build two additional rental units. Now, they’re also size-limited. As I said, this would be a theme. An additional rental unit can be no bigger than 800 square feet.
So Kauai is already in compliance with the state law, right? Bbecause that’s a legal maximum of four units. Now. not everyone is going to build four units of course. You have to have access to sewer infrastructure. Obviously, you’ve got to have the money in order to build the unit.
But there is one thing Kauai is looking to change. They’ve introduced a bill that would allow one guest house or one additional rental unit per dwelling. The difference there is really technical.
An additional rental unit is — as I said, it’s complicated — an additional rental unite could receive a subsidy from the county if the homeowner is going to rent it at an affordable rate — the subsidy includes things like waiving the fees.
So legalizing guest homes in addition to additional rental units, I don’t know that it’s going to do much in terms of legalizing more housing, but it does expand the options of what you can build.
Miro: It does have a little bit of complexity to it over there on Kauai.
Let me remind listeners, Jonathan Helton, policy researcher, Grassroot Institute of Hawaii. Accessory dwelling units is the topic and some bills that have been passed to move things forward, improve those bills and make things a little bit easier. Have these county bills gotten any sort of pushback? I imagine so.
Helton: At the county, there’s been some pushback, and I can talk about some of the reasons why. One of the biggest is infrastructure. You look at the Big Island, and most of the homes there, or at least a lot of them, they use cesspools. And, according to the EPA, you can’t have more than one dwelling connected to a cesspool. So that’s an obvious limiter.
If someone wants to build another dwelling on their lot, they’re going to have to pay either to put in a septic tank or to connect to the county sewer. And even the county sewer system there is very old, and the wastewater treatment plant tends to have a lot of maintenance issues.
So in terms of infrastructure, the theme in all of these county bills and in the state law — this is in the state law that passed — it said that the county can deny your permit to build an ADU if there’s not going to be sufficient access to utility infrastructure.
So if there’s not water available for the lot, if the sewer system is at capacity or the septic tank is at capacity, you can’t build.
Some people are concerned that, oh, more ADUs will stress the infrastructure. [But] if the infrastructure is already at capacity, the county is not going to let you build more. And so I don’t think that particular concern is valid.
The bigger concern about, hey, Hawaii needing to build out some of its infrastructure to allow for more housing is absolutely true, and Grassroot — that’s something that I’ve wanted to look into for a while. I’ve looked into it a little bit, but I don’t have all of the answers and some specific solutions to how we pay for that new infrastructure. I don’t have that yet. But yes, infrastructure is an issue. Is it a problem with these bills? Not really.
Miro: How about affordability? That’s always on the minds of folks when you bring these types of projects forward.
Helton: Right. When the state law was being passed, there were some people who said, “Hey, we need to require that ADUs built under the state law be rented at affordable rates.”
There’s a couple of problems with that. The first problem is that it adds another layer of paperwork because then anyone who’s building an ADU, they get their permit, they’re going to have to go and certify with either the county or the state that it’s being rented at an affordable rate.
There’s already so much paperwork on building housing and renting housing in Hawaii that adding that layer was just going to be another discouragement.
But there’s a reason that we’ve talked about the size limits for ADUs in every county, and it’s because smaller houses tend to be more affordable just by nature of the fact that they’re smaller.
And so, again, ADU is not going to be some sort of luxury mansion. It’s intended to be a smaller home that maybe someone who is moving back, or maybe you’ve got someone who’s a teacher or another essential worker, you know, they’re trying to look for a place to rent that’s going to be less expensive. They might be able to afford a smaller unit, and maybe that’s a stepping stone for them to move into something bigger later on when they maybe have the means to do that.
And there’s national surveys on this, national surveys looking at places that have allowed ADUs. ADUs tend to be more affordable, and that’s because the people who build them, the homeowners, often rent them to friends or family, and they’re not going to charge their friends or family maybe as much as they might charge someone they didn’t know.
So there is some natural affordability built into ADUs and that’s part of the reason that a requirement from that state that it be affordable isn’t necessary.
Miro: All right, we’re speaking about the county bills getting any sort of pushback. Now, of course, Oahu has a much more dense population base here than the spread-out neighbor islands. But nonetheless, I’m sure there’s concerns of higher density with these.
Helton: Yes, there’s certainly are. People don’t like their neighborhoods changing. I get that. There is a development in the neighborhood I live in, and I am going to miss a lot of the wildlife that called that particular lot home. Right? And I think that’s normal. As humans, we tend to not like it when there are really big changes around us.
And ADUs — are ADUs going to be that really big change? Probably not. As we’ve talked about, they’re size-limited. They’re not going to be monster homes. If someone is building a monster home and calling it an ADU, they’re probably doing it illegally. Eight hundred square feet is the maximum on Oahu. So if someone’s building something bigger than that, hey, that’s a different issue, right? Different laws would apply.
But, as we talked about in the opener, Hawaii needs more housing. So where are we going to put it? Are we going to put it all downtown? Well, there’s already projects that people are working to build more condominiums downtown. We’ve worked on bills to make it easier to do that, and we can talk about those at some point.
So we’re working on that.
Are we going to build more subdivisions and pave over paradise? I mean, we could, but I think that means Hawaii loses a lot of its charm. I think, know a lot of people would agree that, you know, for sure on the Big Island, you don’t want to see a lot of the rain forest maybe near Hilo, south of Hilo — you don’t want to see all that paved over, right?. You want Hawaii to preserve its natural beauty.
As someone wrote about this, I think in Civil Beat, they said, “If you want to ‘Keep the country country,’ you have to make the city more city.” And, you know, I think that sums it up pretty well.
Miro: Yeah, exactly. Has this approach of allowing more accessory dwellings worked in other places in the U.S.? I’m sure you can give us some examples.
Helton: Yes, in general, cities that have allowed more ADUs have seen them built, and they’ve helped to reduce rent costs to some degree.
Obviously, talk about a housing crisis and a housing shortage is not limited to Hawaii, so you do have a lot of places that haven’t built very many homes in decades and you’re seeing the result where prices are going up and people are leaving.
So have ADUs helped in general? Yes. And we’ve talked about some of the reasons why, some of the natural affordability that they provide.
Miro: And to wrap things up, Jonathan, anything else to add?
Helton: You know, I think the pitch I would make is we need to give these bills a shot. The counties are in the process of implementing them. Kauai and Hawaii, they’ve already done that. Maui and Honolulu are both looking at that. We think it’s great.
If you’re someone who’s skeptical, reach out, ask me some questions. I’ll give you my email at the end of the show. But Hawaii has to try different strategies in order to reduce the housing crisis. And we think this one has a lot of merit. It’s probably not going to solve it, but I don’t think there’s going to be any one thing that the state of Hawaii can do to solve the housing crisis. It has to be a bucket of, you know, half a dozen, a dozen things. And this is a really important part of that.
Miro: Excellent, Jonathan. Policy researcher at the Grassroot Institute of Hawaii, he said he’ll be letting you have his email address. So go ahead, Jonathan, let them know.
Helton: My email address is jhelton@grassrootinstitute.org.
Miro: And that’s where you can reach them also for all their great research that they do. Everything’s available there, a lot of information available, and absolutely free for you.
All right, Jonathan, very busy individual, off and about to inform some people somewhere throughout the state. We look forward to another great discussion in the near future. Thanks for joining us this morning.
Helton: Thank you for having me.