Housing in Hawaii is at a crisis level and constructing more affordable housing in Hawaii is a top priority issue with both the city and state governments. Hawaii’s Department of Business, Economic Development & Tourism estimates that 50,000 new housing units are needed by 2025 to keep up with demand. In response to the housing crisis the City and County of Honolulu passed Ordinance 19-8, commonly referred to as Bill 7. Among other things, Bill 7 makes the construction of affordable housing less expensive by allowing developers and landowners to construct denser structures than are normally allowed in areas that have apartment, apartment mixed-use and business mixed-use zoning. These buildings, which can rise to 60 feet, can only be constructed on lots of 20,000 square feet or less. They are not required to have off-street parking, elevators or loading zones.
Honolulu City Council
All units in these buildings must be rented to households earning below 100% of the area median income – about $131,000 for a family of four. The rents must be at or below the rental limits set by the U.S. Department of Housing and Urban Development for that income group and stay affordable for 15 years. Bill 7 projects receive waivers on building permit, sewer connection and water connection fees, a 10-year waiver of property taxes, as well as a grant from the City of Honolulu and matching grant from State of Hawaii upon completion. Bill 7 also allows for an expedited permitting process through the Department of Planning and Permitting.
Bill 7 was scheduled to sunset on May 21, 2024, but has been extended under the recently enacted Bill 8 for an additional seven years and now sunsets on May 21, 2031.
Lam Capital LLC specializes in new construction of multifamily properties on the island of Oahu. We specifically target properties compliant with Honolulu’s affordable housing legislation known as “Bill 7.” At Lam Capital LLC, we are passionate about Hawaii and its geographic and logistical importance on the world’s economic stage. We believe affordable housing on Oahu is critical to preserving the future of Hawaii.
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