A bill to exempt state-financed housing developments from county council approval has passed second reading on the Hawaiʻi Senate floor and advanced to the Ways and Means Committee.
Senate Bill 27 drew mixed reactions during a public hearing late last month before the Senate Housing Committee, chaired by Sen. Stanley Chang of urban Honolulu and southeast Oahu, and vice chaired by Sen. Troy Hashimoto of Central Maui.
Lahaina Strong submitted written testimony saying that current fast-tracked state housing projects have a 45-day review period and “are reviewed thoroughly while remaining time-sensitive.”
“In the broader context of Maui’s permitting process, 45 days is not a significant delay,” Lahaina Strong said. “If a project truly meets the intent of the 201H law to prioritize affordable housing, then it should easily gain County Council approval. Eliminating this review period undermines the County Council’s role and the community’s opportunity to weigh in on projects that directly impact their lives.”
The housing advocacy group borne in the wake of the August 2023 Maui wildfires said that West Maui has had to “grapple with the misuse of the 201H process.”
“Developers have used it to push projects that may technically include affordable housing units but ultimately serve to subdivide rural land into multi-million-dollar ‘gentlemen’s estates.’ These projects have created deep mistrust in the community, as they fail to address the pressing need for truly affordable housing while exploiting loopholes for profit,” Lahaina Strong said. “For Lahaina, this is not just an abstract policy concern — it’s a matter of survival.”
“Our community faces unique challenges, including water scarcity and ongoing infrastructure recovery, which demand thoughtful, inclusive decision-making,” the group said. “Senate Bill 27 would sideline these considerations by fast-tracking projects without sufficient community engagement, exacerbating an already fragile situation.”
Other testimony opposed to the measure came from the City and County of Honolulu’s Department of Planning and Permitting, HI Good Neighbor and 16 individuals.
Maui Chamber of Commerce President Pamela Tumpap supported the bill.
“The Chamber recognizes that, historically, many projects have gone to the County Council for approval, only to face significant conditions that render them financially unfeasible,” she said. “This is particularly disconcerting for state-funded projects (201H), which already must meet special conditions and are intended to provide affordable housing. Given the urgency of the housing crisis, we need to expedite the development of housing as quickly as possible. The county approval process is often time-consuming and subject to extensive testimony, and additional delays can result in increased costs.”
“In light of the severe housing shortage in both the state and Maui County, we strongly support initiatives that promote, rather than hinder, the development of housing for our residents,” Tumpap said.
Other submittals of testimony in favor of the bill came from the Hawaii Appleseed Center for Law and Economic Justice, Housing Hawaiʻi’s Future and one individual.
Senate Bill 27 was introduced by Chang and Hashimoto, as well as Republican Kurt Fevella of Ewa Beach, Sharon Moriwaki of urban Honolulu and Glenn Wakai of Central Oʻahu.
A Housing Committee report on this bill is here. A YouTube recording of the Jan. 28 committee meeting is here.
The Senate also has passed on second reading Senate Bill 38, which would prohibit county councils from making modifications to housing development proposals that would increase project costs.
That bill, also heard in committee on Jan. 28, was introduced by Sens. Chang, Fevella, Hashimoto and Joy San Buenaventura of Puna, Hawaiʻi Island.
Public testimony on Senate Bill 38 was as mixed as Senate Bill 27, with both sides of the debate lining up in favor or opposition in similar fashion.
Lahaina Strong expressed strong concerns about diminishing the County Council’s role in addressing community needs on pending housing projects.
“The County Council is the body closest to the people and the realities on the ground, particularly in disaster-affected communities like Lahaina,” the group said. “Ensuring that housing projects align with our community’s needs and values requires a process where local voices are heard. The current proposal undermines this essential process by allowing the state to bypass county-level approval for projects that have received state funding. This sets a dangerous precedent and risks disenfranchising communities across Hawaiʻi.”
Lahaina Strong said that the bill provision that prohibits the County Council from making any modifications that could increase the cost of a project is “deeply concerning.”
“It effectively ties the hands of the County Council, preventing them from addressing critical design, safety or infrastructure concerns that could arise during the review process,” Lahaina Strong said. “Responsible development often requires adjustments to ensure a project is sustainable, accessible and aligned with local needs — adjustments that may incur additional costs but are essential to long-term success. This limitation prioritizes cost savings over the well-being and functionality of our communities.”
In support of the bill, Tumpap said: “we have witnessed projects that initially met county and state requirements and appeared financially feasible. However, when these projects went before the County Council for final approval, new conditions were often imposed. These modifications frequently led to increased costs, making the projects no longer financially viable. As a result, many housing developments were not built, and the housing that had been planned never materialized.”
“Developers are often unable to obtain accurate estimates for these last-minute conditions and cannot properly assess whether the changes fit within the overall project budget,” she said. “Many of these conditions involve the development of critical infrastructure, which we believe should be the responsibility of the county and state. By the time developers reach the County Council level, they already know what will work financially. Sudden changes during this process create significant challenges and, over the years, have led to a loss of potential housing.”
According to a committee report, testimony in support of the bill also came from the Hawaiʻi Housing Finance and Development Corp., Grassroot Institute of Hawaiʻi, NAIOP Hawaiʻi, Housing Hawaiʻi’s Future and one individual. Testimony in opposition was submitted by Honolulu’s Department of Planning and Permitting, HI Good Neighbor and 12 individuals.
Commenting as an individual Maui County Council member, Chair Alice Lee said this morning: “While I enthusiastically support efforts to limit affordable housing costs and expedite housing projects, I generally do not advocate for state restriction on local authority.”
“The counties are uniquely positioned to better understand local impacts and nuances of proposed developments,” she said, adding that Senate Bill 38 would “entirely remove the counties’ ability to safeguard and protect their communities from potential negative aspects of proposed developments if modifications increase the affordable housing project’s costs, even slightly. This proposed restriction on county power comes at too high a cost.”
“Similarly, Senate Bill 27 would exempt projects that have received a financial commitment from the state from needing county legislative approval. Removing all local approval of these housing projects could have costly and unintended results,” she said.
In other updates of housing-related legislation, House Bill 739 has cleared the Judiciary & Hawaiian Affairs Committee, chaired by Rep. David Tarnas and vice chaired by Rep. Mahina Poepoe.
The bill would establish a Kamaʻāina Homes Program. Modeled after the Vail InDEED program in tourist-Mecca Vail, Colo., the program would provide funding to the counties to purchase voluntary deed restrictions from eligible homeowners or homebuyers. Central Maui Rep. Tyson Miyake and Kaua’i Rep. Luke Evslin were co-introducers for the House bill.
The Kamaʻāina Homes Program would be established within the Hawaiʻi Housing Finance and Development Corp. at a time when the median single-family home sells for more than $1 million in Maui County, although the condominium market has sustained a recent price and sale volume chill over concerns about the vacation rental phase-out bill pending before the Maui County Council.
That measure is expected to be scheduled for consideration in late March. Meanwhile, the University of Hawaiʻi Economic Research Organization is working to complete a study of the bill’s economic impacts in the first quarter of this year. The Council has until June 18 to take action on the bill within a 180-day time period for department-initiated land use legislation set by the Maui County Charter.
In addition to Tarnas and Poepoe voting in favor of House Bill 739 were Reps. Della Au Belatti, Kirstin Kahaloa, Amy Perruso, Gregg Takayama, Chris Todd and Garner Shimizu. Rep. Diamond Garcia voted “aye” with reservations. Reps. Elle Cochran and Mark Hashem were excused.
Two bills going nowhere so far this session are House Bill 489 and Senate Bill 1214, which take aim at discouraging owners of second homes in Hawaiʻi who leave them unoccupied much of the time.
The legislation would establish a Vacant Homes Special Fund under the Hawaiʻi Housing Finance and Development Corp. for rental assistance programs similar to federal Section 8 tenant-based housing assistance. Under the measures, residential property owners who allow their property to remain vacant for 180 days, or more than a year, would be subject to an annual general excise tax surcharge. It also requires people who own residential property but don’t live there to obtain a general excise tax license.
Editor’s note: This story has been updated from its original post to add comments, as an individual council member, from Maui County Council Chair Alice Lee.