A measure meant to continue greater private development of affordable rental housing on Oahu is under consideration by the Honolulu City Council.

The Council’s Committee on Zoning voted unanimously Wednesday to advance Bill 8 to second reading, which, if approved, would delay the automatic repeal of the city’s Ordinance 19-8, formerly known as Bill 7.

Approved in 2019, Bill 7 was signed into law by then-Mayor Kirk Caldwell to “create a temporary program to accelerate the construction of affordable rental housing” on apartment and business mixed-use-zoned properties by relaxing zoning and building code standards and offering financial incentives to developers.

Bill 7 further recognizes that for decades Oahu “has grappled with a critical shortage of affordable rental housing. This problem grows worse by the year and threatens to undermine our quality of life and permanently erode the city’s social and economic foundations so as to jeopardize its order and security.”

The ordinance is scheduled to sunset on May 21, 2024.

But the new measure, Bill 8, if approved, would extend the original ordinance by 10 years — to May 21, 2034. It would also require the director of the Department of Planning and Permitting to submit to the City Council a report — five years after the bill’s enactment — detailing the number of affordable rental housing units developed on the island.

At the Zoning Committee meeting, DPP Director Dawn Takeuchi Apuna said the city supports the new measure, in part, “to allow more time for Bill 7 projects to come through and receive the grant money to help finance these projects.”

DPP, she said, has approved eight Bill 7 projects so far. “And we have about 30 in our department right now under review,” Takeuchi Apuna added. “So there could be a great potential for affordable housing to be built in this apartment style that we support.”

During Council questioning, Council Vice Chair Esther Kia‘aina asked about the typical time it took DPP to review and approve Bill 7 affordable rental projects.

The DPP director responded that it depended on the type of project being proposed. “I would say we’ve approved eight in the last several months, so we’ve kind of hit our stride, but I couldn’t give you an exact timeline for these projects; they’re all kind of different, too,” Takeuchi Apuna said.

She said that another factor in bringing these kinds of projects to fruition was attempting to interpret the intent of Bill 7 itself.

“Bill 7 is not the easiest bill to work with,” Takeuchi Apuna said. “I think we are trying to work with the developers to try and understand the interpretation of the bill; so that was a struggle. And it continues to be (a struggle) to some extent, but we are trying to be collaborative.”

Later, Kia‘aina asked about the potential of “auto approval” of project permits under the ordinance.

“Within Bill 7 there is a 90-day automatic approval for these projects,” Takeuchi Apuna said. “Whether the developer wants to take advantage of that, that’s up to them. But we believe that it still needs to go through our process in order for them to receive an approved plan with which the inspector can go out and approve and issue a certificate of occupancy.”

She added that this would ensure a developer’s project meets code.

Then Kia‘aina asked, “What if they were to avail themselves of it without your approval? What happens then?”

“Then they might not get their inspection and their certificate of occupancy,” Takeuchi Apuna replied.

Among those who have succeeded in getting a Bill 7 project advanced to construction is local developer Paul Lam, who broke ground in 2022 on a planned 26-unit, three-story walk-up for low-income renters in Makiki.

In December, Lam, a principal of Lam Capital LLC, told the Honolulu Star-Advertiser he was motivated to build his project because Bill 7 provided developers like himself tax incentives and property exemptions for 10 years while expediting planning and permitting with no fees.

And under Bill 7, Lam’s project did not require City Council approval.

“This is essential to solving the housing crisis,” said Lam at the December ground­breaking before he and other dignitaries, including Honolulu Mayor Rick Blangiardi, whose stated priority is affordable housing, used golden shovels to symbolically turn the first soil on the vacant and narrow 5,388-square-foot parcel surrounded by high-rises.

Lam’s project at 1427 Ernest St. will offer 24 studio apartments and two one- bedroom units ranging in size from 230 to 420 square feet. Monthly rent has not been disclosed, but is aimed at tenants who earn 80% of the area median income and will include water, power and garbage collection costs. Lam paid $1.2 million to buy the Ernest Street property.

According to the city, under a project such as Lam’s apartment building, a Bill 7 grant would provide up to $9,000 per unit rented to households earning 60% to 100% of the area median income or up to $15,000 per unit rented to households earning below 60% of the area median income.

The city Department of Budget and Fiscal Services issues the grant after DPP determines eligibility, according to the city.

At the time, developer Lam worried that Bill 7 might discourage future developers of affordable rental housing because it was set to expire in 2024. At Wednesday’s Zoning Committee meeting, others like Evan Oue, representing commercial real estate development association NAIOP Hawaii, also supported the 10-year extension of Bill 7.

“Bill 7 offers a great option in order for developers to establish these affordable units, and we would love to see that program continue,” Oue said.

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Star-Advertiser staff writer Dan Nakaso contributed to this article.