HB 1734: Counties; Lot Requirements and Dwelling Specifications; Prohibition; Residential Uses; Urban District; Counties; Petition Process; Exemptions

A BILL FOR AN ACT

RELATING TO ZONING.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that minimum lot sizes and other requirements or specifications in urban areas contribute to higher housing costs by restricting the number and diversity of homes that can be built.  The legislature further finds that many landowners and developers are already responding to market demand for smaller homes and lots by using the condominium property regime (CPR) process to create units with limited common elements in the one thousand two hundred square foot range.  This use of condominium property regimes to "CPR down" de facto lots demonstrates that there is strong demand for small homes on small pieces of land and that existing subdivision standards are being functionally circumvented rather than serving their intended planning purpose.

     The legislature also finds that Hawaii has a long history of modest, walkable neighborhoods built on small lots.  Plantation camps across the islands were commonly made up of compact cottages in the one thousand two hundred square foot range, on tightly knit streets that housed workers and their families near jobs and community facilities.  In many other states, attached townhomes and similar entry-level ownership housing types are frequently built in the one thousand two hundred square foot range as well, showing that smaller homes on compact parcels are a normal and effective part of the housing ladder.  These types of homes often function as "starter homes," or smaller, more affordable first homes that allow local families to get a foothold in homeownership, build equity, and upgrade over time as their needs change.

     The legislature additionally finds that relying on condominium property regimes instead of conventional subdivisions to deliver small-lot housing can create long-term challenges for homeowners.  When multiple dwelling units share fee ownership of a single parcel under a condominium property regime, owners are tied together through mandatory associations, shared maintenance obligations, and joint responsibility for common infrastructure and insurance.  In the current environment of rapidly increasing property and master policy insurance premiums and association costs, these shared obligations can lead to higher and more volatile monthly expenses, special assessments, and even difficulties obtaining or maintaining mortgage financing if a building is underinsured.  By contrast, allowing properly regulated, small, fee-simple lots to be created through subdivision would give households clearer, more traditional ownership interests while still achieving the same or greater levels of land-use efficiency, helping restore a pathway to true starter homes in Hawaii.

     The legislature therefore finds that eliminating certain minimum lot size and other requirements or specifications within the State's urban district, while maintaining protections for areas subject to coastal hazards, flooding, and other environmental risks, will allow for more efficient use of land, better align the law with existing market behavior, and support the State's housing goals.

     Accordingly, the purpose of this Act is to prohibit counties from imposing certain lot requirements and dwelling specifications for lands zoned for residential uses within the urban district, with certain exemptions.

     SECTION 2.  Chapter 46, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§46-     Lot and dwelling specifications; urban district; prohibition.  (a)  Notwithstanding any law to the contrary, for purposes of subdivision, development, or the issuance of a building permit, no county shall, by ordinance, rule, or regulation, on any parcel of land zoned for residential uses located within the urban district designated pursuant to section 205-2:

     (1)  Require a lot to:

          (A)  Be greater than one thousand two hundred square feet;

          (B)  Be wider than thirty feet;

          (C)  Be deeper than forty feet;

          (D)  Have a building plane or other setback greater than:

              (i)  Ten feet from the front or five feet from the back of the property; or

             (ii)  Five feet from the side of the property;

          (E)  Have covered parking;

          (F)  Have more than one parking space per unit;

          (G)  Have off-site parking; or

          (H)  Have more than thirty per cent open space or permeable surface; or

     (2)  Prohibit a dwelling from having three stories or less.

     For the purposes of this subsection, "dwelling" has the same meaning as in section 46-88.

     (b)  This section shall not apply to:

     (1)  Lands located within special management areas delineated pursuant to part II of chapter 205A;

     (2)  Lands located within special flood hazard areas as designated on flood maps issued by the National Flood Insurance Program of the Federal Emergency Management Agency;

     (3)  Lands located within tsunami evacuation zones as designated by the counties;

     (4)  Lands subject to other hazard area designations as determined by the counties; and

     (5)  Lands located within a shoreline area as defined in section 205A-41.

     (c)  A county may establish by ordinance a process by which a defined neighborhood, subdivision, or other geographically contiguous area within the urban district may petition the county to establish or retain any requirement or specification otherwise prohibited pursuant to subsection (a).  Any petition shall:

     (1)  Be initiated and signed by the owners of no less than seventy-five per cent of parcels within the area;

     (2)  Describe the proposed requirement or specification and boundaries of the area; and

     (3)  Be subject to notice and public hearing before the applicable county.

A county may impose reasonable limitations on the duration for which a successful petition is valid, require periodic renewal by petition, and establish conditions under which a successful petition may be rescinded.

     (d)  Nothing in this section shall be construed to:

     (1)  Affect requirements related to wastewater systems, potable water availability, stormwater management, or other public health and safety standards;

     (2)  Alter or impair the classification of lands pursuant to section 205-2 or the permissible uses within each land use district;

     (3)  Prohibit counties from imposing:

          (A)  Construction requirements or specifications based on fire separation distance.  For the purposes of this subparagraph, "fire separation distance" means the distance measured at a right angle from the face of a building's exterior wall to:

              (i)  A property line;

             (ii)  A centerline of a public street, road, or alley; or

            (iii)  Another building on the same lot; or

          (B)  Wildfire mitigation measures, such as additional exterior-fire resistant material requirements, ember protection, and defensible space requirements; or

     (4)  Require counties to approve any subdivision, development, or building permit if the applicant demonstrates compliance with applicable requirements relating to the following or prohibit counties from denying or conditionally approving any subdivision, development, or building permit unless the applicant demonstrates compliance with applicable requirements relating to the following:

          (A)  Wastewater systems;

          (B)  Potable water availability;

          (C)  Stormwater management; and

          (D)  Fire and life safety standards, including fire code requirements, emergency vehicle access, wildfire mitigation and setback requirements, ladder or aerial apparatus access requirements, minimum water supply and fire-flow requirements for fire suppression, and any other relevant public health and safety standards;

          provided that the requirements in this paragraph shall not be used to establish a minimum lot size greater than permitted under this section.

     (e)  Any ordinance, rule, or county requirement inconsistent with this section shall be void to the extent of the inconsistency."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 3000.

Report Title:

Counties; Lot Requirements and Dwelling Specifications; Prohibition; Residential Uses; Urban District; Counties; Petition Process; Exemptions

Description:

Prohibits the counties from imposing certain lot requirements and dwelling specifications for parcels of land zoned for residential uses located within the urban district for purposes of subdivision, development, or the issuance of a building permit, with certain exemptions.  Allows the counties to establish a petition process for neighborhoods, subdivisions, or other geographically contiguous areas to establish or retain certain requirements or specifications.  Effective 7/1/3000.  (HD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

relating to ZONING.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  The legislature finds that minimum lot sizes and other requirements or specifications in urban areas contribute to higher housing costs by restricting the number and diversity of homes that can be built.  The legislature further finds that many landowners and developers are already responding to market demand for smaller homes and lots by using the condominium property regime (CPR) process to create units with limited common elements in the one thousand two hundred square foot range.  This use of condominium property regimes to "CPR down" de facto lots demonstrates that there is strong demand for small homes on small pieces of land and that existing subdivision standards are being functionally circumvented rather than serving their intended planning purpose.

     The legislature also finds that Hawaii has a long history of modest, walkable neighborhoods built on small lots.  Plantation camps across the islands were commonly made up of compact cottages in the one thousand two hundred square foot range, on tightly knit streets that housed workers and their families near jobs and community facilities.  In many other states, attached townhomes and similar entry-level ownership housing types are frequently built in the one thousand two hundred square foot range as well, showing that smaller homes on compact parcels are a normal and effective part of the housing ladder.  These types of homes often function as "starter homes," or smaller, more affordable first homes that allow local families to get a foothold in homeownership, build equity, and upgrade over time as their needs change.

     The legislature additionally finds that relying on condominium property regimes instead of conventional subdivisions to deliver small-lot housing can create long-term challenges for homeowners.  When multiple dwelling units share fee ownership of a single parcel under a condominium property regime, owners are tied together through mandatory associations, shared maintenance obligations, and joint responsibility for common infrastructure and insurance.  In the current environment of rapidly increasing property and master policy insurance premiums and association costs, these shared obligations can lead to higher and more volatile monthly expenses, special assessments, and even difficulties obtaining or maintaining mortgage financing if a building is underinsured.  By contrast, allowing properly regulated, small, fee-simple lots to be created through subdivision would give households clearer, more traditional ownership interests while still achieving the same or greater levels of land-use efficiency, helping restore a pathway to true starter homes in Hawaii.

     The legislature therefore finds that eliminating certain minimum lot size and other requirements or specifications within the State's urban district, while maintaining protections for areas subject to coastal hazards, flooding, and other environmental risks, will allow for more efficient use of land, better align the law with existing market behavior, and support the State's housing goals.

     Accordingly, the purpose of this Act is to prohibit counties from imposing certain lot requirements and dwelling specifications within the urban district, with certain exemptions.

     SECTION 2.  Chapter 46, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§46-     Lot and dwelling specifications; urban district; prohibition.  (a)  Notwithstanding any law to the contrary, no county shall, by ordinance, rule, or regulation, on any parcel of land located within the urban district designated pursuant to section 205-2:

     (1)  Require a lot to:

          (A)  Be greater than one thousand two hundred square feet;

          (B)  Be wider than thirty feet;

          (C)  Be deeper than forty feet;

          (D)  Have a building plane or other setback greater than:

               (i)  Ten feet from the front or five feet from the back of the property; or

              (ii)  Five feet from the side of the property;

          (E)  Have covered parking;

          (F)  Have more than one parking space per unit;

          (G)  Have off-site parking; or

          (H)  Have more than thirty per cent open space or permeable surface; or

     (2)  Prohibit a dwelling from having three stories or less,

for purposes of subdivision, development, or the issuance of a building permit.

     For the purposes of this subsection, "dwelling" has the same meaning as in section 46-88.

     (b)  This section shall not apply to:

     (1)  Lands located within special management areas delineated pursuant to part II of chapter 205A;

     (2)  Lands located within special flood hazard areas as designated on flood maps issued by the National Flood Insurance Program of the Federal Emergency Management Agency;

     (3)  Lands located within tsunami evacuation zones as designated by the counties;

     (4)  Lands subject to other hazard area designations as determined by the counties; and

     (5)  Lands located within a shoreline area as defined in section 205A-41.

     (c)  A county may establish by ordinance a process by which a defined neighborhood, subdivision, or other geographically contiguous area within the urban district may petition the county to establish or retain any requirement or specification otherwise prohibited pursuant to subsection (a).  Any petition shall:

     (1)  Be initiated and signed by the owners of no less than seventy-five per cent of parcels within the area;

     (2)  Describe the proposed requirement or specification and boundaries of the area; and

     (3)  Be subject to notice and public hearing before the applicable county.

A county may impose reasonable limitations on the duration for which a successful petition is valid, require periodic renewal by petition, and establish conditions under which a successful petition may be rescinded.

     (d)  Nothing in this section shall be construed to:

     (1)  Affect requirements related to wastewater systems, potable water availability, stormwater management, or other public health and safety standards;

     (2)  Alter or impair the classification of lands pursuant to section 205-2 or the permissible uses within each land use district;

     (3)  Prohibit counties from imposing construction requirements or specifications based on fire separation distance.  For the purposes of this paragraph, "fire separation distance" means the distance measured at a right angle from the face of a building's exterior wall to:

          (A)  A property line;

          (B)  A centerline of a public street, road, or alley; or

          (C)  Another building on the same lot; or

     (4)  Require counties to approve any subdivision, development, or building permit if the applicant demonstrates compliance with applicable requirements relating to the following or prohibit counties from denying or conditionally approving any subdivision, development, or building permit unless the applicant demonstrates compliance with applicable requirements relating to the following:

          (A)  Wastewater systems;

          (B)  Potable water availability;

          (C)  Stormwater management; and

          (D)  Fire and life safety standards, including fire code requirements, emergency vehicle access, wildfire mitigation and setback requirements, ladder or aerial apparatus access requirements, minimum water supply and fire-flow requirements for fire suppression, and any other relevant public health and safety standards,

          provided that the requirements in this paragraph shall not be used to establish a minimum lot size greater than permitted under this section.

     (e)  Any ordinance, rule, or county requirement inconsistent with this section shall be void to the extent of the inconsistency."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2026.

Report Title:

Counties; Lot Requirements and Dwelling Specifications; Prohibition; Urban District; Counties; Petition Process; Exemptions

Description:

Prohibits the counties from imposing certain lot requirements and dwelling specifications for parcels of land located within the urban district for purposes of subdivision, development, or the issuance of a building permit, with certain exemptions.  Allows the counties to establish a petition process for neighborhoods, subdivisions, or other geographically contiguous areas to establish or retain certain requirements or specifications.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO.  109-26

Honolulu, Hawaii

                , 2026

RE:   H.B. No. 1734

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

     Your Committee on Housing, to which was referred H.B. No. 1734 entitled:

"A BILL FOR AN ACT RELATING TO ZONING,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Prohibit the counties from imposing certain lot requirements and dwelling specifications for parcels of land located within the urban district for purposes of subdivision, development, or the issuance of a building permit, with certain exemptions; and

     (2)  Allow the counties to establish a petition process for neighborhoods, subdivisions, or other geographically contiguous areas to establish or retain certain requirements or specifications.

     Your Committee received testimony in support of this measure from Hawaiʻi YIMBY; Housing Hawaiʻi's Future; Grassroot Institute of Hawaii; Hawaiʻi Appleseed Center for Law & Economic Justice; and Maui Chamber of Commerce.  Your Committee received comments on this measure from the Department of the Attorney General and Department of Planning and Permitting of the City and County of Honolulu.

     Your Committee finds that existing minimum lot sizes, setbacks, parking mandates, and other specifications in the urban district restrict the number and diversity of homes that can be built, worsening the State's housing shortage and driving up development costs.  Your Committee further finds that these restrictions have led landowners to use the condominium property regime process to create de facto small lots, resulting in shared‑ownership arrangements that increase long‑term financial risk for homeowners and can complicate maintenance, insurance, and mortgage financing.  This measure enables more efficient land use and restores a pathway to fee‑simple starter homes.

     Your Committee has amended this measure by:

     (1)  Specifying that the lot requirement and dwelling specification prohibitions are for parcels of lands zoned for residential uses within the urban district;

     (2)  Specifying that the requirements of this measure shall not be construed to prohibit the counties from imposing wildfire mitigation measures;

     (3)  Changing the effective date to July 1, 3000, to encourage further discussion; and

     (4)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

     As affirmed by the record of votes of the members of your Committee on Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1734, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1734, H.D. 1, and be referred to your Committee on Water & Land.

Respectfully submitted on behalf of the members of the Committee on Housing,