One of the most hotly contested bills Hawaii lawmakers passed this year could make residential neighborhoods more dense, though the beginning of such change may be more than two years away.

Senate Bill 3202, if it becomes law, will allow “at least two” accessory dwellings in addition to a main home on lots zoned primarily for single-family housing, but gives counties until the end of 2026 to craft ordinances to carry out the mandate.

After the deadline, if no enabling ordinance exists, counties will be barred from denying permits for the additional homes.

SB 3202 has been described by proponents as an innovative and bold strategy to help relieve a chronic short supply of affordable housing statewide. But the measure also attracted heavy public opposition and was described by one lawmaker as one of the worst products to come out of Hawaii’s Legislature.

Votes to approve the bill were 29-22 in the House of Representatives and 16-9 in the Senate.

Gov. Josh Green, who has tried his own creative and aggressive approaches to combat Hawaii’s affordable-housing crisis with mixed results, is generally supportive of SB 3202. But a decision on enactment is still pending a final legal, fiscal and policy review by Green’s administration.

A lot of opposition to the original version of the bill focused on a provision allowing new residential lots as small as 1,200 square feet, in contrast to existing common minimum lot sizes from 3,500 to 10,000 square feet typically for one house in many neighborhoods. The bill also originally proposed to allow a minimum of four homes per lot.

The minimum lot size under SB 3202 got increased to 2,000 square feet in a later draft, but was altogether eliminated in the final draft approved by the Legislature.

Still, forcing counties to allow at least two accessory dwellings, also referred to as “granny flats,” on residential-­zoned lots created deep division among lawmakers, including some supporters who said they were inundated with calls or emails from people who urged them to vote against the bill.

Pitched debate

On the floor of the House chamber at the state Capitol before a final vote took place May 1, more than a dozen House members spent 45 minutes offering competing reasons why their colleagues should vote for or against the measure.

The biggest advocate of the bill in the House, Rep. Luke Evslin (D, Wailua-­Lihue), said the proposed changes would somewhat counteract very high regulatory constraints on housing development in Hawaii, and reduce out-migration of residents who can’t afford housing by allowing families to add small homes on their property for multigenerational use.

“We have essentially filled up our urban state land-use district with predominantly single-family homes,” he told colleagues. “Every single day, 180 people are moving to the mainland. In a lot of ways, these are economic exiles from Hawaii. … SB 3202 is not going to solve the housing crisis, but it’s a step in the right direction.”

Since 2021, the median sale price for single-family homes has exceeded $1 million on Oahu, Maui and Kauai.

Rep. Nicole Lowen (D, Kailua-Kona-Honokohau-­Puuanahulu) said during the debate that not enough progress has been made on affordable housing despite it being one of the most important and challenging issues in the state.

“I think (the bill is) a really sincere attempt to do something good for the state,” she said.

Another supporter, Rep. Cedric Gates (D, Waianae-Makaha), said he’s going to support any tools to address Hawaii’s housing crisis.

“For my generation, I believe it’s getting increasingly harder to envision calling Hawaii home, and long term I hope that this measure will help us achieve that,” he said.

The biggest criticisms of the bill include a contention that investors will buy up more housing to add rental units that won’t be affordable to most residents, and that higher allowable density will make property more expensive while degrading neighborhoods and the quality of life for community members.

“This, Mr. Speaker, is urban sprawl, and it is not the answer to our housing crisis,” said Rep. Natalia Hussey-Burdick (D, Kailua-­Kaneohe Bay), addressing House Speaker Scott Saiki.

Rep. Scot Matayoshi (D, Kaneohe-Maunawili) said he supports higher density that goes vertical around rail stations in mostly urban parts of Oahu, but can’t endorse what the bill would allow in suburban single-family neighborhoods.

“I have been listening to my constituents and I’ve been thinking about this and how this would apply to Kaneohe and Kailua, and it disturbs me,” he said during the debate. “It seems like this bill is trying to expand horizontally without expanding the bounds horizontally. It’s trying to pack in more houses into our neighborhoods where that was never the intention, and that would change the fundamental nature of our communities.”

Rep. Gene Ward (R, Hawaii Kai-Kalama Valley) called SB 3202 one of the worst bills produced by the state Legislature.

Another opponent of the bill, Rep. Richard Onishi (D, Hilo), said he was offended by a comment during one public hearing on the bill where the planning director for Hawaii County said the proposed legislation was needed because the Hawaii County Council is unwilling to do what the bill proposes.

“The planning director basically admitted that he’s coming to the state Legislature and through proponents of this bill because he cannot get similar requirements passed by the County Council,” Onishi said during the debate. “And that really offends me because we always talk about home rule and the ability for our county councils to do what is best for the people within the county … .”

On Oahu, the Honolulu City Council passed a resolution opposing SB 3202, while the city Department of Planning and Permitting expressed concerns.

Tommy Waters, City Council chair, reiterated his opposition to the bill in a letter to state lawmakers a day before their May 1 final vote, and in an email urged his own constituents to contact their representatives in the Legislature to urge them to vote against the bill.

“The most recent draft of this measure argues that it will address our housing crisis, but these changes will increase speculation and drive up housing costs,” Waters said in the email.

County options

Evslin told fellow House members, as they contemplated voting, that counties retain considerable control over how additional homes get permitted. He said the bill preserves county rules conditioning more homes on adequate infrastructure and meeting requirements for parking, setbacks from property lines, building coverage limits and other things.

“The intention here was to push the counties to act, but give them a lot of flexibility in how they choose to act,” he said during the May 1 debate.

SB 3202 directs the counties to enact ordinances permitting at least two accessory dwellings subject to “reasonable” standards.

The bill also contains an option for counties to permit the additional homes only in certain districts instead of on all residential-­zoned lots.

This provision has requirements that include having the special districts reasonably distributed among regional planning areas, and permitting additional development that is equivalent to at least half of a county’s projected five-year need for new housing under a 2019 study.

There is also an extra requirement under the alternative option applying only to Oahu. This extra condition requires a City Council ordinance permitting additional housing in areas zoned for apartment use or apartment/mixed use equivalent to Oahu’s projected five-year need for new housing in the 2019 study.

Rep. Linda Ichiyama (D, Fort Shafter Flats-Salt Lake-Pearl Harbor) called the alternative unfair for Oahu because it requires a 150% increase in development potential compared with 50% for neighbor islands.

Ichiyama, who voted against SB 3202, said the alternate requirement for Oahu equates to 30,000 more homes.

Speaker Saiki, who voted for the bill, said during a news conference on May 1 after the vote that counties have choices and two years to develop rules around the anticipated new state law.

“This does not diminish home rule,” said Saiki (D, Ala Moana-Kakaako-Downtown). “It’s really in the hands of the counties.”

The governor’s office, in a statement, said that the bill, based on a preliminary review, appears to still leave counties with authority to regulate reasonable use.

After the approval by lawmakers, Waters said in an email to constituents that he will help to ensure that the City Council considers a wide range of measures to safeguard against what he views as the worst aspects of SB 3202 while continuing to pursue its good intentions.

“Although I am disappointed and firmly believe that this measure will ultimately do more harm than good, I am hopeful that by working closely with all of you, we can effectively protect our communities as we continue to address our statewide affordable housing crisis,” he said.