Honolulu City Council members say they will take another look at what types of houses would be rejected under a bill imposing a moratorium on large-scale houses after being warned about unintended consequences.

The Council on Wednesday gave a second reading approval to Bill 110 (2017), requiring the Department of Planning and Permitting to stop issuing building permits for larger houses for up to two years as the city wrestles with a growing number of large-scale homes, or so-called “monster houses,” some of which are being used for illegal long-term rentals, vacation rentals or other businesses not allowed.

A homebuilder could seek an exemption during the interim, but would need to get approval for building permits from the Council.

Council members said they want to stop the proliferation of the larger homes, arguing that even when legal, they are unsightly and out of place in older residential neighborhoods and overburden sewer capacity, street parking and other infrastructure.

What defines a “large detached dwelling” is what Council members are grappling with.

The current draft says it is a house that exceeds 3,500 square feet of living area. That language replaced the original draft that says a large detached dwelling is one with “X” number of bedrooms, with the “X” up for discussion. Also in the mix has been a third idea, using a specific building density.

Representatives from the Building Industry Association of Hawaii, A&B Properties and several others tied to the housing industry were among a slew of people testifying against using a 3,500-square-foot threshold based on living area.

Gladys Marrone, BIA Hawaii chief executive officer, said the current draft “would have unintended consequences, negatively impacting more legitimate owners who are trying to accommodate multigenerational households and their families.” Marrone said her organization appreciates the Council’s efforts to regulate large-scale homes, “but we think it’s probably more of an enforcement issue.”

But the Council should not make homebuilding tougher at a time when the state estimates a need for 25,000 new units to deal with the current housing crunch, Marrone said. “There’s got to be a better way and, if this bill must move forward, the floor-to-area ratio is something that would be less discriminatory and more fair to the homeowners that are trying to build their homes.”

Earl Lee, co-president of Berkshire Hathaway HomeServices Hawaii Realty, said that by limiting new homes to 3,500 square feet of living area, “this bill is overreaching in that it makes no distinction between lot sizes.”

He added, “In essence, this bill would arbitrarily devalue the value of (larger) lots because of what cannot be built on those properties.”

Council Planning Chairman Ikaika Anderson has scheduled a special meeting for 10 a.m. Monday to hear the bill.

Councilman Trevor Ozawa, who has led the effort against large houses, said he has been looking at a draft that would allow a lower density than the Council had been considering.

“We should take a more balanced approached,” he said, adding that he also would want more discussion on parking requirements and the issue of projects that already have received other approvals.