Helton hits highlights of recent county housing reform advances

from Grassroot Institute of Hawaii, October 16, 2025

Legislative action in all four of Hawaii’s counties could soon help ease the state’s acute housing shortage, according to Jonathan Helton, policy analyst at the Grassroot Institute of Hawaii.

Speaking this past Sunday with host Johnny Miro of the H. Hawaii Media radio network, Helton noted that on Hawaii Island, tax relief is coming for long-term rental owners in the form of a new property tax class. 

That measure could soon be coupled with an expansion of the number of commercial areas where residential housing is permitted.

“We really think that’s a win on the housing front, trying to expand options for folks and allowing home builders to have more flexibility in where they can put these homes,” Helton told Miro.

On Maui, property taxes are also a hot issue — so much so that the County Council recently launched a committee that will hear only bills aimed at changing the property tax system.

Separately, the Council is considering a bill that could save thousands of dollars for people who buy a short-term rental or second home for their own full-time residency by allowing them to receive homeowner exemptions immediately on a prorated basis rather than having to wait until the following tax year. [Editor’s note: This measure, Bill 113 (2025), was approved by the Council on Oct. 10, and is awaiting a decision by Mayor Richard Bissen.]

For Kauai property owners, Helton expressed hope that they might someday soon be allowed to build more housing units that utilize water-catchment systems, which he wrote about in The Garden Island newspaper in September.

On Oahu, he said, there is a move to encourage the building of more higher-density apartment buildings in areas that are already zoned for that. 

TRANSCRIPT

10-12-25, Jonathan Helton with host Johnny Miro of the H. Hawaii Media radio network

Johnny Miro: Happy to have you along on this Sunday. Once again, I’m Johnny Miro. It’s time for the H. Hawaii Media family of radio stations Sunday morning public access programming on our five Oahu radio stations, five Kauai radio stations, and yes, five stations on Maui. Hawaistream.fm, live365 the Facebook page. Another way to find us. 

And we’re going to be talking about that popular subject once again, taxes. Well, if you pay a lot, you’re not really going to have as much disposable income that you would like. 

All right, so we’ve got a conversation once again with the folks at Grassroot Institute of Hawaii. You can find them at grassrootinstitute.org. And I’ll be talking with policy analyst Jonathan Helton. He’s with the Grassroot Institute of Hawaii. 

Hawaii’s four county councils, they play major roles in deciding tax policy and regulating where and how housing and businesses are built. So, what’s going on in the counties as it relates to property taxes and housing? So we’ll be asking Jonathan about that. 

So, first of all, let’s welcome him in this Sunday. He’s a frequent guest on our public access programming on Sundays. Jonathan, good morning to you.

Jonathan Helton: Johnny, good morning to you, and thanks for having me here.

Miro: All right. It’s a very, very big topic because the money is needed as far as what can be utilized for housing and other purposes. So, let’s go county by county, as I just stated at the top. 

Starting over on Hawaii Island, what changes are happening over there as far as these property taxes are concerned?

Helton: On Hawaii Island, we’re sort of seeing not a lot of activity on the property tax front, actually. We are seeing some activity on the housing front.

But to give a little bit of background, last year, Hawaii County Council, they created a new property tax class if you are a long-term rental. And so that is going to be starting up. And so if you are renting to somebody long-term and you would like to apply for this tax class, it is possible that if you do so, you could receive reduced taxes, depending on what tax class you’re in right now. There are eight, nine, 10 of them.

So I definitely encourage any listeners on Big Island to take a look at what the county is offering in terms of their long-term rental tax break. But that was passed last year. It’s going into effect.

Right now, there are a couple of really interesting bills at the county council when it comes to zoning reform. 

Well, so one of them that relates to housing is Bill No. 63. And Bill No. 63 would allow more homes in commercial areas. So right now, if you are in Hawai‘i County, you own a commercial lot, there are a lot of areas where you could actually build housing in addition to whatever business you wanted to put on that commercial lot.

So, if you think of a lot of downtown areas, such as Hilo or Pahoa, these are areas where you might have multistory buildings where the bottom floor of the building is a store and the upper floor is used as an apartment. And so Bill 63 would allow that sort of construction in more of the island’s commercial zones. 

So we really think that’s a win on the housing front, trying to expand options for folks and allowing homebuilders to have more flexibility in where they can put these homes.

Miro: Is that done widely on Oahu, do you know, about having a business and having a rental? Same structure?

Helton: Downtown?

Miro: Yeah.

Helton: Definitely. If you were to go outside of downtown, you know, you have some areas that are zoned for business where, hypothetically you could, but maybe the building is very old, and it would be really expensive to retrofit the upstairs to put in all new plumbing. So, it’s legal. I don’t know that it’s super common.

Miro: All right. So we’re talking with Jonathan Helton, policy analyst at Grassroot Institute of Hawaii. He closely follows county legislation. 

All right, so let’s go over to the Valley Isle, Maui. What sort of major initiatives is the council there considering in the property tax realm?

Helton: Property taxes there, super big issue right now. 

So, earlier this year, the Maui County Council approved a budget that included a pretty significant property tax hike over last year. And I think as a part of that conversation, the Council there decided, “Hey, we are going to take a closer look at our property tax system.” 

And so they’ve actually launched a special committee that is designed only to hear bills that will change the property tax system. So that committee started meeting about a month ago, so sometime I believe in August 2025, maybe early September. And they’ve been moving some bills out already.

So, I’ll give a quick breakdown. There’s a lot of things that have been proposed. Most of the bills that have been suggested are really technical, so no big tax breaks, no big tax hikes have been proposed in that committee yet. But some of the technical changes are really interesting. 

So, I’ll give you an example. Right now, if you are a homeowner, if you own a long-term rental, if you would qualify for any exemption that the county offers, typically you have to apply for that exemption by December 31st of any year. And then the next year, you get that tax exemption.

Now, this is all well and good, except for folks who buy a home in the middle of the year. 

So if you buy a home in January and you aren’t able to meet that December [31st] deadline, you have to wait a full, ‘nother year before you can apply to get this tax relief. And if you’re a homeowner, this is actually a really big deal. 

So, let’s say that you are somebody and you have found a short-term rental or a second home, maybe that’s in a condominium that is for sale, it was used as short-term rental, the owner wants to sell it for whatever reason. If you buy that with the intention of living there, the homeowner exemption would be really beneficial for you.

So if you buy that condominium, you could be paying 10 times more than if you were taxed as a homeowner. Short-term rentals on Maui pay a much higher tax rate. 

So, one of the bills the Council has proposed is to say, “Hey, if you missed that December 31st deadline, you should be allowed to apply for tax relief in the middle of the year, and get a break on maybe the first or maybe the first and second tax payments you pay that year.” 

So, again, as I said, it is a technical change, but for people who don’t meet that December 31st deadline, for whatever reason, some of these technical changes could be really important. You could be looking at saving $10,000 if you’re somebody who’s buying a property in this situation.

Miro: Yeah. Man, that is extreme, if indeed that is the case, missing on that deadline. 

All right, Jonathan, what about on the housing front on Maui? Of course, that’s [a] major topic, especially since the 8-8-23 wildfire disaster.

Helton: Yes. And there are a lot of bills related to Maui wildfire recovery in terms of housing in general. And there are a couple of really big changes that the council is debating. 

So, the first one I’ll mention is Bill 103. That bill was proposed about two years ago, and it’s still being debated. It would allow people to build more homes per lot in residential areas. This is being proposed as a way to give homeowners, property owners, a little bit more flexibility in what they can build because a major barrier to housing construction on Maui has been the lack of infrastructure.

And so a lot of times, when a builder might come in and want to build a new subdivision, there simply isn’t adequate infrastructure. So either the builder has to pay for all of the water and sewer pipes, which is very expensive, or they negotiate with the county to try to get the county to pay for those pipes, which the county also doesn’t want to do because it’s expensive. 

So, the idea of allowing more homes per lot in some of these existing residential areas might help break that infrastructure logjam a little bit.

So, you know, we’re talking about, you know, maybe instead of being allowed to do one ADU, maybe you could do two ADUs. Depending on the size of your lot, maybe you could do up to three. 

So, again, the bill has been postponed, so we’re not sure what the final form will look like, but I think the general idea of “Let’s get more ADUs legalized and then hopefully built,” I think that’s a good idea.

Miro: Yeah. All right. I just mentioned Lahaina and the devastating wildfires of over two years ago. So Maui County is dealing with that. So what sort of legislation has been passed or is being discussed that might help with the recovery?

Helton: Johnny, it seems that whenever I look at the Maui County code, I will find something that is going to present a barrier to somebody trying to rebuild Lahaina. 

So I wrote a policy brief about this that was published back in July. It identified a couple of parts of the county code that might be holding people back from rebuilding. And since that brief was released, there have been several other bills that have been proposed at the Council, where they have identified other barriers.

So, I’ll just give you some examples of these. 

But before I do, I want anyone who’s listening to think about what Lahaina was. Lahaina was incredibly old. It had a lot of historic buildings there. And the way it was constructed, you don’t see a lot of new construction like that today, where areas are super, super walkable and the buildings are right beside each other.

A lot of what was in Lahaina was really old and didn’t meet the current zoning codes, so it makes sense why all of these bills are being proposed to try to address rebuilding because if someone wants to rebuild what they had, and that building was built 75 or 100 years ago, I mean, the laws have changed. 

So with that context, one example of a bill is Bill 156. And so, this is something that’s really simple. It says, “Hey, if you had a sign or an awning on your building, or maybe you had something attached to your building that was out over the sidewalk or that was sitting on the sidewalk, you can rebuild that,” because the current county code didn’t allow for that.

Another example is a bill that is currently at the Maui Planning Commission, and it says, “Hey, if you had a structure that was taller than 30 feet tall in the Lahaina National Historic Landmark District — which by the way, applies to most of the Lahaina town core — you should be able to rebuild the building that you had before the fire,” because right now in that area, the height limit is 30 feet. 

So, again, going back to some of these historic structures like the Waiola Church, that building was taller than 30 feet. So, if you’re trying to rebuild, while you run into a conflict with the Maui Community Plan that says, “Hey, there’s a height limit of 30 feet,” but the church, which I want to say was about 50 feet tall, obviously, you couldn’t rebuild that. 

So, again, there’s all of these small rules in the zoning code and the building code and the community plan that are getting in the way of folks who are trying to return and then rebuild what they had before the fire.

Miro: Jonathan Helton from Grassroot Institute of Hawaii. You can read all of his analysis and some of the papers that he’s released over there at grassrootinstitute.org, grassrootinstitute.org. And, obviously, it has helped on Maui moving some proposals, some legislation. 

Let’s move it to Oahu, Honolulu. And there’s been headlines lately, Jonathan, about the new building permit software, and it’s had some glitches, and the Department of Planning and Permitting, the DPP, is apparently working to fix them. What other housing news from Honolulu has flown under the radar?

Helton: So, DPP and the new software. OK, I want to get to talking about that. I do want to go back to Maui for a minute, just to mention one more thing as it relates to Lahaina.

Miro: OK.

Helton: There is a bill, Bill 110, that was introduced last year. Super, super important. That bill waived some of the rules for what business owners, apartment owners, have to do when they rebuild, because typically, if you’re building a business, you have to make all of these different improvements to the sidewalks and to the street, and maybe put in other infrastructure that the county requires. 

That rule right now is presenting a pretty big barrier to commercial coming back in Lahaina. So I just wanted to mention that. You know, that’s something that really needs to be a priority, and addressing that issue.

Miro: OK.

Helton: But to go back to the DPP and the new software, you know, my heart goes out to DPP because I know they launched this with the goal of “Let’s get building permits out the door quicker. Let’s streamline the system for everybody, replace this old technology with something that’s newer.”

And so, I know there’s been a lot of bugs in the new software that they’re working through. And I, you know, I hope that they’re able to see those soon for their sake and for the sake of anybody who’s trying to get a building permit right now.

So, you know, I can say that I hope it goes well. But in terms of any other legislative changes in Honolulu, we have seen some good bills proposed. 

There was a bill proposed earlier this year that would have allowed larger buildings to be built in apartment zones. The goal there was to say, “Hey, apartment zones are different than residential. In residential, typically you can have a single-family home, maybe a duplex, maybe an ADU. But in apartments, we want to have apartments.” And it turns out that the Honolulu zoning code doesn’t really allow apartments to be all that big.

And so, the idea of this bill is to say, in areas that are already designated for higher-density residential, like multifamily buildings, apartment buildings, condominiums, let’s actually leverage those areas to allow that sort of construction. To allow these denser and taller buildings. 

So, right now, that bill, that resolution, is waiting for a hearing from the Honolulu Planning Commission. I’m very hopeful that it will be approved soon and go back to Council and then get into law so that we can actually allow some of these builders to start building housing where it’s needed.

Miro: Do you have an area on the island where they’re looking at? Maybe not specifically, but in general, for easing up of the regulations as far as what you just discussed?

Helton: In terms of the apartment zone, that would apply to the entire island. If you look at where apartment zoning districts are right now, a lot of them are concentrated. There’s some over on the west side. A lot of them are concentrated near your Ala Moana area, near Wakiki. So a lot of them are in the areas where you’re going from, you know, sort of big city downtown areas, and then you’re going into areas that are more traditional subdivisions. 

The area in between is typically where you will find these apartment zones. But, you know, I mean, sometimes they’ll be in random places.

Miro: OK. Jonathan, what about the property taxes on Oahu? Are residents here in Honolulu looking at some higher tax bills next year?

Helton: Well, the City and County will be reassessing property, and the property assessment date was October the 1st. So, we are waiting to get that data to see how much assessments went up. I know the past couple of years, they have jumped pretty significantly. So, we will see.

I think that data should be released; early December is usually when they make that public. But, you know, I think there’s been a couple of things to, I guess, give hope on the property tax front. So, the City Council here passed two bills that would increase the homeowner exemption.

So, if you are a homeowner and you’re claiming the homeowner exemption, the bills would save you about $70 at the current tax rate, which, I realize does not sound like a lot of money. But for the City Council, sometimes, you know, getting through a $70 tax break for homeowners, sometimes that’s the best you can get. 

So, we’re certainly thankful they passed those, and as we await the assessments, if the assessments jump again like they have in past years, we will definitely be advocating for a reduction to the property tax rate so that folks are not paying significantly more than they were last year.

Miro: All right. To wrap it up, we’ve got another one of the islands, that would be the Garden Isle, Kaua’i. What kind of news do you have for Kauai, and what can they expect?

Helton: Yes. On Kauai, I think one of the really interesting things I learned, I was over there recently talking to some folks, and one of the big barriers to building new housing on Kauai is actually the lack of water. 

And I know the Honolulu Civil Beat had a really good article about this, but you have on Kauai, very rainy. But the issue is the water infrastructure is old. It is often at capacity in a lot of the towns, and people trying to build housing can’t get water meters. 

So, one of the things that’s been proposed, and I think this would be a really good tool to give people, is to free up the rules around water catchment.

So, again, Kauai is generally very rainy. If you live on a farm or one of the rural areas, typically, you are already allowed to use a water catchment to collect rainwater, purify it, and then use it in your home. But you’re not allowed to do that if you live in an area where you could hypothetically get water service. 

So, for example, if you own a farm, if you just live in a neighborhood, and you would like to maybe build an ADU, you go to the Department of Water there and you say, “Hey, I would like to build an ADU, can I get an additional water meter?” And they say, “Well, the system is at capacity. You can’t have that water meter.” 

So, OK, you don’t have a water meter. Can you do water catchment? The answer is no. 

And so, you know, I think the reasoning there is that the Department of Water doesn’t want these water catchment systems to have any sort of connection to the public water supply because of concerns that, well, maybe the rainwater might get contaminated somehow, and it would then flow into the public water supply. 

And I think that’s, you know, that could definitely happen. But I think there’s other ways to sort of prevent that than to just outright ban folks from having water catchment if they can’t get a water meter. 

So, that’s been a discussion on Kauai for a while. I had an article in The Garden Island paper there a while ago talking about this. And, you know, I think that that’s just one tool that the County could give folks who are trying to look for ways to maybe build housing for their kids, or their friends, to help them afford to stay there.

Miro: So it’s not exactly, you know, we don’t have the space to build. It’s just that the issues with water and the catchment of water is the major impediment. That’s what you’re pretty much saying then. 

It doesn’t really have to do with, you know, turning into an urban sprawl, but just with water catchment. That’s pretty startling, the fact that, you know, you need some housing, but this is holding things back.

And is that the only issue on Kauai?

Helton: Oh, no. You know, as I mentioned, the water infrastructure there is so old. I think the plan is, they want to find $1.3 billion. A huge amount of money, to do all of these upgrades to it. 

And realistically, probably, it does need some of these upgrades. And hopefully, as they’re implementing this plan over the next 10, 20 years, they will build it such that we’re going to replace this pipe, we’re going to enlarge this water main, so that new housing will be able to be built in some of these town areas, and so that folks can actually afford to stay there.

And so, you know, that’s a plan that I think is in the works. There haven’t been a lot of housing-related bills proposed at [the] Kauai [County Council] in the past couple of months. I think there was maybe one rezoning bill passed for a specific parcel. There haven’t been a lot of code changes that would be applicable to the whole island lately there.

Miro: Jonathan Helton from Grassroot Institute of Hawaii, and he is the policy analyst over there and does a lot of great work, and has influenced a lot of things. And you can catch his work at grassrootinstitute.org and some of the other publications, not only on Oahu, but also the neighbor islands. Anything else to add to the conversation, Jon, as we wrap things up?

Helton: Well, as we conclude, I’d say to anyone who is listening, if you have a story about property tax or an issue getting a building permit or a story about zoning, please reach out. I would love to talk with you. 

I know the zoning and permitting and tax rules are often really complicated for no good reason. And sometimes, you know, all it takes is a conversation, and then we figure out, “Hey, there’s this rule that is, you know, holding back these people from being able to build housing or being able to afford their tax bill.”

And, you know, sometimes, based on those conversations, bills get introduced and things get changed. 

So, you know, I would welcome hearing from anybody who is dealing with this because ultimately, Grassroot wants to make Hawaii more affordable for everybody. And, you know, that’s our goal.

Miro: And how can they get a hold of you or follow you, social media, what have you? Of course, grassrootinstitute.org. Any other way? Like I just mentioned, your work is being published a lot more broadly these days.

Helton: Yes. The best way to get in touch with me directly is my email address. And that is jhelton@grassrootinstitute.org. jhelton@grassrootinstitute.org. 

I know several people have reached out based on hearing our conversations in the past, and so I’d love to hear from more of your listeners.

Miro: No doubt about it. Another great conversation from Jonathan Helton. Enjoy the rest of your Sunday, and we’ll be speaking soon, no doubt about that. Thanks for joining us once again.

Helton: All right. Aloha.