Bill 18 Could Streamline Honolulu Housing Approvals

In Honolulu, the conversation around housing often focuses on density—how many units a parcel can hold and how tall buildings can rise. But for developers underwriting projects, the more critical factor is whether a project can be approved as of right. Bill 18, introduced by Council Vice Chair Andria Tupola, aims to expand the Chapter 32 Affordable Rental Housing program (known as Bill 7) into more zoning districts, including apartment, business, and Waikiki precincts. The program offers relaxed zoning standards, tax relief, and fee waivers in exchange for 80% of units being rented at affordable rates for at least 15 years. According to Mike Perkins of The Bratton Team at Colliers International Hawaii, the current 201H process introduces significant uncertainty because the outcome and timeline cannot be modeled, leading to conservative pricing. Bill 18 would allow Chapter 32 projects to proceed directly to building permits, bypassing discretionary approvals and reducing carry costs. Perkins emphasizes that this certainty would speed up the process and attract more capital. The 2024 Hawaii housing planning study projects a need for 27,710 new units in Honolulu between 2023 and 2027, making efficient approval pathways essential. Related regulatory changes on Maui (Bill 9 phasing out short-term rentals and Bill 88 creating new rezoning pathways) and the state mandate for two accessory dwelling units per lot are also shaping the market. Perkins notes that regulatory clarity now weighs more heavily in underwriting than interest rates. For investors, the approval pathway attached to a site is as important as its physical characteristics, and local expertise in navigating these pathways is invaluable. Current Hawaii inventory and monthly market statistics help inform investment decisions, but understanding which approval pathway applies is key to positioning.