More housing reforms for Hawaii

by Keli'i Akina, Ph.D., President / CEO, Grassroot Institute of Hawaii, May 16, 2026

Now that Hawaii's 2026 legislative session is over, I'd like to tell you about a few meaningful housing reform proposals that passed and are awaiting the governor’s approval.

Perhaps the most notable is HB1741. If enacted, this bill could significantly rein in the county practice of inclusionary zoning.

This measure would not ban the counties from forcing homebuilders to offer a certain number of “affordable” units for sale or rent in new housing projects, but it would require them to study the potential effects of such rules before imposing them.

As I’ve explained in the past, inclusionary zoning is a well-meaning attempt to boost the stock of affordable housing, but evidence shows it actually slows housing growth and contributes to higher home prices.

Basically, requiring homebuilders to offer a certain number of new homes below market rates either drives up the cost of the other units or discourages homebuilding entirely.

Another important housing reform that made it through to the end of the legislative session this year is HB1710. If approved by the governor, this bill will establish review deadlines for the State Historic Preservation Division, building on legislation signed into law last year that was also aimed at shrinking the historic review wait times that drive up construction costs across the state.

Similarly, lawmakers agreed to broaden the scope of a law enacted last year that eliminated school impact fees for housing projects of fewer than 100 units.

If approved by the governor, HB1713 will expand that exemption to housing projects of fewer than 500 units, along with dwelling units reserved for affordable housing under county mandates and homes smaller than 400 square feet that do not have a dedicated bedroom.

Last but not least, the Legislature approved HB1721, which is a simple “clean-up” bill aimed at increasing the effectiveness of an expedited permit process implemented last year.

These reforms might not be the most groundbreaking changes, but they are aimed at addressing the many regulatory barriers and administrative delays that contribute to Hawaii’s shortage of homes and high housing prices.

If the governor approves these particular measures, 2026 will go down as yet another year in which the Legislature made significant progress toward resolving Hawaii’s housing crisis.

I sincerely thank everyone who supported them throughout the session.

E hana kākou! (Lets work together!)