Council advances plan to allow affordable rental housing in some business zones; DPP flags development-standard questions

The Honolulu City Council moved forward with a proposal to allow affordable rental housing projects under Chapter 32 in certain business zones, a step supporters say will unlock new sites for housing while planners and some council members requested further committee-level work on development standards.

At first reading the council advanced Bill 44, which would add B1 (neighborhood business) and B2 (community business) districts to the districts eligible for housing development under Chapter 32. Supporters said the change would let affordable rental projects locate in more urban and mixed-use areas.

“Allowing these projects in business and in mixed use zoning areas just makes sense, especially when the demand for affordable homes keep growing and available land is so limited,” said Fred Tamayo of the Hawaii Regional Council of Carpenters. Mitchell Tainenas, also testifying for the Carpenters, said the measure “puts our local construction crews out to work.”

Elizabeth Krieger of the Department of Planning and Permitting told the council that the bill would be a meaningful change because Chapter 32 currently applies in certain mixed-use districts but does not automatically apply to B1 and B2. She urged discussion of specific development standards: “I do think that there should be a discussion relating to impacts to areas where B1, the height limit is 40. Under chapter 32, it can be 60. And then I think it's also important that we continue to discuss the impacts to the special districts because, chapter 32 overrides the special districts.”

Krieger also clarified that Chapter 32 includes fee and tax waivers for projects that meet affordability requirements, but that adding districts to Chapter 32 “doesn't necessarily require affordable housing per se.” Council members said those clarifications show the need for committee work to set standards such as required commercial components and height limits in particular areas.

What the council did: Bill 44 was set and passed first reading as part of the omnibus first-reading motion. Members recorded reservations (noted for the record) and requested committee hearings to examine height limits, commercial-use requirements and special-district overrides.

Next steps: The committee will consider amendments on development standards, affordability covenants, and whether Chapter 32 provisions such as minimum commercial uses and fee waivers should be modified when housing is allowed in B1 and B2. Staff and council members indicated they will seek targeted community outreach for districts where the changes would be most consequential.