Allow more multi-unit housing

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To: Honolulu City Council
Tommy Waters, Chair
Esther Kia‘aina, Vice Chair

From: Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii

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RE: BILL 10 (2022), CD1 — RELATING TO USE REGULATIONS

Dear Chair and Council Members:

The Grassroot Institute would like to offer comments on Bill 10 (2022), CD1, which would restructure the land-use ordinances contained in Chapter 21 of the 1990 Revised Ordinances of Honolulu.

The bill would update the county’s land-use regulations for agricultural, residential, commercial, nonprofit, government and other uses.

We commend the Council for its work to update the code and lower the cost of housing, but we are concerned that some elements of the bill will undermine that goal.

Expanding multi-unit and group housing

In Sec. 21-5.50-1: “Household living,” page 26, Bill 10 clarifies the guidelines for multi-unit dwellings in business zones and expands the business zones in which they can be constructed.

Multi-unit dwellings with one or two dwelling units would be allowed in business zones as long as they are on the second floor and meet certain size specifications.

The Grassroot Institute of Hawaii welcomes this proposal, since any step to allow more housing will likely reduce housing costs.

The National Multifamily Housing Council has studied this issue and concluded that government regulation makes up more than 40% of multifamily development costs.[1]

Additionally, the Brookings Institution has written that “in places where land is expensive, building multiple homes on a given lot is the most direct way to reduce housing costs because it spreads the cost of land across multiple homes.”[2]

On this front, Bill 10 is a step in the right direction.

But there is more that can be done to expand multi-unit dwellings and lower housing prices for Honolulu residents.

As amended on Aug. 25, Bill 10 would permit multi-unit dwellings only in B-1 and B-2 zones, but only if those units are in so-called transit-oriented development plan areas — in other words, areas near the Honolulu rail line.

This amendment should be reconsidered, as it constrains these multi-unit dwellings to a needlessly small area.

I would like to comment on one other section of the bill, which the Grassroot Institute of Hawaii believes is well-intentioned but misguided.

Creating government-owned housing for teachers

In Sec. 21-5.50-3: “Accessory residential,” page 36, Bill 10 allows the city to finance, construct and lease housing for teachers whose household income is 80% or below the area’s median income. The housing would be built on land owned by the city and under lease to the state Department of Education.

Unfortunately, research has shown that such government-owned housing often traps tenants.

“Once they are segregated in low-income housing, residents are disincentivized to get ahead in life or move to better housing,” the Manhattan Institute’s Michael Hendrix has written.[3]

Stuck in housing they do not own and cannot improve, tenants can end up in unacceptable living conditions.

Since rent from lower-income individuals often does not keep pace with maintenance costs, governments must find the cash to pay for repairs. When they cannot, repairs are put off — sometimes with hazardous results.

In 2018, the New York City Housing Authority faced a lawsuit from residents alleging the agency “failed to provide tenants with heat and hot water” and did not “keep residents safe from lead.”[4]

Instead of spending more taxpayer money on housing, the city should incentivize private home development by liberalizing zoning regulations and cutting permitting delays — in the latter case, perhaps by reducing the number of permits needed.

In general, Bill 10 deserves praise for relaxing the zoning regulations on multi-unit homes, but it could and should do more.

Thank you for the opportunity to testify.

Sincerely,

Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii


[1]New Research Shows Regulations Account for 40.6 Percent of Apartment Development Costs,” National Multifamily Housing Council, June 9, 2022.

[2] Jenny Schuetz, “To improve housing affordability, we need better alignment of zoning, taxes, and subsidies,” Brookings Institution, Jan. 7, 2020.

[3] Michael Hendrix, “America’s Failed Experiment in Public Housing,” Governing, May 10, 2021.

[4] Ibid.

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