SB 2423: Counties; Lot Requirements and Dwelling Specifications; Prohibition; 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 the State 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 the State.

     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, by ordinance, rule, or regulation, on any parcel of land located within the urban district designated pursuant to section 205-2, shall require a lot zoned for housing to:

     (1)  Be greater than two thousand five hundred square feet;

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

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

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

     (3)  Restrict solid fences or walls in side or back yards to less than seven and a half feet in height;

     (4)  Where accessory dwelling units are permitted by counties, require an accessory dwelling unit to be less than 1,250 square feet;

     (5)  Have covered parking;

     (6)  Have more than one parking space per unit; or

     (7)  Have off-site parking;

     (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 not 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, 2050.

Report Title:

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

Description:

Prohibits the counties from imposing certain lot requirements on lots zoned for housing on 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.  Effective 7/1/2050.  (SD1)

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. 2983

Honolulu, Hawaii

RE:     S.B. No. 2423

        S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committee on Judiciary, to which was referred S.B. No. 2423, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO ZONING,"

begs leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Prohibit the counties from imposing certain lot requirements on lots zoned for housing on 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 the Hawaii Appleseed Center for Law & Economic Justice, Maui Chamber of Commerce, AARP Hawaiʻi, Hawaiʻi YIMBY, Grassroot Institute of Hawaii, and two individuals.

     Your Committee received testimony in opposition to this measure from one member of the Honolulu City Council, Hawaii's Thousand Friends, HI Good Neighbor, and two individuals.

     Your Committee 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.  Your Committee further finds that reducing minimum lot sizes in the right locations supports denser, more affordable housing near jobs and transit, lowers transportation-related emissions, and strengthens "social resilience" by fostering more connected walkable communities.  By prohibiting the imposition of certain lot requirements on lots zoned for housing, this measure lowers unnecessary regulatory barriers in urban areas, encourages modest and attainable housing options, preserves critical health and environmental protections, and honors community participation. 

     As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2423, S.D. 1, and recommends that it pass Third Reading.

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

STAND. COM. REP. NO. 2684

Honolulu, Hawaii

RE:     S.B. No. 2423

        S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committees on Water, Land, Culture and the Arts and Housing, to which was referred S.B. No. 2423 entitled:

"A BILL FOR AN ACT RELATING TO ZONING,"

beg leave to report as follows:

     The purpose and intent 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 Committees received testimony in support of this measure from one member of the Kauaʻi County Council, Hawaiʻi YIMBY, Grassroot Institute of Hawaii, AARP Hawaiʻi, Housing Hawaiʻi's Future, Hawaiʻi Appleseed Center for Law and Economic Justice, and two individuals.

     Your Committees received testimony in opposition to this measure from one individual.

     Your Committees received comments on this measure from the Department of Planning and Permitting of the City and County of Honolulu.

     Your Committees find that there is strong demand in the State for small homes on small pieces of land, as evidenced by many landowners and developers who use the condominium property regime process to circumvent existing subdivision standards in urban areas.  The condominium property regime process creates long-term challenges for homeowners, including higher monthly expenses, special assessments, and difficulties obtaining or maintaining mortgage financing if a building is underinsured, whereas properly regulated, conventionally subdivided fee-simple lots would give homeowners clearer, more traditional ownership interests and achieve the same or greater levels of land-use efficiency.  This measure will reduce restrictions of lots and dwellings within the State's urban district, better aligning the law with market behavior and supporting the State's housing goals.

     Your Committees note the concerns raised in testimony by the Department of Planning and Permitting of the City and County of Honolulu that this measure currently applies to all industrial, commercial, and apartment districts, and to those lands in the county agricultural districts, all for which the minimum lot size of one thousand two hundred square feet may be too small to accommodate uses within the districts; and that the minimum lot standards proposed by this measure may be too small to be minimally developed with all the necessary public infrastructure required by county policies.  Amendments to this measure are therefore necessary to address these concerns.

     Accordingly, your Committees have amended this measure by:

     (1)  Inserting language that specifies that lot requirements that counties are prohibited from requiring, by ordinance, rule, or regulation, on any parcel of land located within the urban district designated pursuant to section 205-2, Hawaii Revised Statutes, apply only to a lot zoned for housing;

     (2)  Prohibiting the counties from requiring a lot to be greater than 2,500 square feet, rather than 1,200 square feet, by ordinance, rule, or regulation, on any parcel of land located within the urban district designated pursuant to section 205-2, Hawaii Revised Statutes;

     (3)  Deleting language that would have prohibited counties from requiring a lot to be wider than thirty feet and deeper than forty feet, by ordinance, rule, or regulation, on any parcel of land located within the urban district designated pursuant to section 205-2, Hawaii Revised Statutes;

     (4)  Inserting language that prohibits counties from requiring a lot to restrict the height of solid fences or walls in side or back yards to less than seven and a half feet, by ordinance, rule, or regulation, on any parcel of land located within the urban district designated pursuant to section 205-2, Hawaii Revised Statutes;

     (5)  Inserting language that, where accessory dwelling units are permitted by counties, prohibits counties from requiring a lot zoned for housing to require an accessory dwelling unit to be less than 1,250 square feet;

     (6)  Deleting language that would have prohibited counties from requiring a lot to have more than thirty percent open space or permeable surface, by ordinance, rule or regulation, on any parcel of land located within the urban district designated pursuant to section 205-2, Hawaii Revised Statutes;

     (7)  Deleting language that would have prohibited counties from prohibiting a dwelling from having three stories or less, for purposes of subdivision, development, or the issuance of a building permit, by ordinance, rule, or regulation, on any parcel of land located within the urban district designated pursuant to section 205-2, Hawaii Revised Statutes;

     (8)  Deleting the definition of "dwelling";

     (9)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

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

     As affirmed by the records of votes of the members of your Committees on Water, Land, Culture and the Arts and Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2423, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2423, S.D. 1, and be referred to your Committee on Judiciary.

Respectfully submitted on behalf of the members of the Committees on Water, Land, Culture and the Arts and Housing,