In 2024, Hawaii residents won important victories that made it easier to build more housing and help alleviate part of the state’s crushing cost of living problem.

Thanks to the Grassroot Institute of Hawaii, it is now easier for homeowners to build Additional Dwelling Units (ADUs) on their property. Also, builders now have more flexibility to convert single-family-zoned properties to duplexes and triplexes, or commercial buildings to residential. Getting these reforms to the finish line was no simple task, and they are addressing the real problem of low housing supply in Hawaii. But more importantly, they’re shining a light on the real issue of the state’s housing shortage.

During this year’s legislative session, Grassroot’s team again worked with lawmakers to pass reforms that will help Hawaii residents build more homes and make paradise an affordable place to live.

One of the first bills Grassroot’s team worked to pass was HB422, a bill that eliminated “school impact fees” on most new housing construction. 

Hawaii’s education funding is different from many states. Instead of local public schools being funded primarily through local property taxes, public schools across the state are funded directly through state tax dollars. Partly for this reason (and likely because it was an easy way to justify more money for the state), Hawaii instituted a “school impact fee” for every new housing unit constructed. In other words, any time a family wanted to build an ADU, or whenever a new home or apartment building was being built, the state charged thousands of dollars per unit.

But these “school impact fees” weren’t based on actual data showing increased strain on local schools. And even more bafflingly, the money wasn’t getting spent. The money simply got dumped into a special state education fund and sat there. According to the state auditor, between 2007 (when the fees were established) and 2025, the state had collected $21.1 million in impact fees but not a single cent had been spent.

While school impact fees added marginal costs for new housing, they represented yet another roadblock and unnecessary cost that has led to the state’s long-term housing shortage. But thanks to Grassroot’s expertise on the desperately needed housing reforms in Hawaii, they were able to quickly produce the research and work with legislators to eliminate school impact fees for a huge portion of housing construction in the state.

HB422 was passed on a bipartisan vote and signed by the governor in early 2025. Now, Hawaii developers and homeowners trying to build homes will have one less state-imposed cost, hindering their projects.

Another major reform the Grassroot team helped pass was SB66, a bill that established a 60-day “shot clock” for issuing building permits.

For years, building permits have been one of the biggest roadblocks for developers building new housing or homeowners simply wanting to update or renovate their homes. According to “The Hawai’i Housing Factbook,” produced by The Economic Research Organization at the University of Hawai‘i, the median permit processing time between mid-2018 and mid-2023 across the state was 161 days. Even for simple home-repair projects.

This created a real burden for Hawaii residents needing to wait months (if not years) to begin a building project or face the fees and fines if they built without a permit. And for development projects, permit delays not only cost time, but can add real financial costs to projects.

To alleviate this (and other challenges for building new housing), Grassroot released a report titled Seven low-cost ways to speed up permitting in Hawaiiwith common-sense, affordable ways to reform Hawaii’s housing construction industry. Included in their report was the 60-day shot clock reform. The new policy would change permitting laws to create an expedited permitting pathway if county agencies failed to make a determination within  60 days. After 60 days, licensed architects and engineers can sign-off on these plans via self-certification.

In addition to providing legislators with the reports and model legislation, Grassroot’s experts testified before Hawaii’s legislature to advocate for passing the shot clock law. The Grassroot team also created an advocacy campaign that sent 145 individual supporter testimonies to legislators right before the final vote. Earlier this year, thanks to Grassroot’ research and lobbying, SB66 passed, giving island residents clarity and certainty on building permits.

Additionally, the Grassroot team helped update and reform the state’s convoluted and burdensome “historic property” laws. For years, Hawaii considered any building, structure, object, district, area, or site over fifty years old a “historic property.”

While protecting historic buildings and properties is important, equally important is recognizing that a building is not historic simply because it is old. Automatically categorizing every 50-year-old building as “historic” not only increases the cost and time to renovate (or demolish) buildings that need work, it also bogged down the permit and approval process for working on truly historic buildings.

The Grassroot team once again led the way for getting the necessary reforms across the finish line. In February, 2025, they released the report Preserving the past or preventing progress?In the report, they clearly laid out how the state’s historic buildings law was not only a real barrier for property owners trying to update and maintain their buildings, it was putting truly historic properties at risk by blurring the lines of properties that truly needed protection and buildings that were simply older.

Largely because of Preserving the past, the legislature introduced and ultimately passed SB15 and HB830 which updated the definitions for a historic building and also streamlined how building permits can be issued. Now, thanks to these pieces of legislation, Hawaii property owners will no longer need to wade through a maze of regulations and bureaucracy just to update an aging building.

Ted Kefalas, the Grassroot Institute’s Director of Strategic Campaigns summed up Hawaii’s housing issue well when he said, “Hawaii is simply not building enough homes.” While there is still work to be done to bring Hawaii’s housing supply in line with its demand, the Grassroot Institute has cut record amounts of red tape to ensure housing becomes affordable for Hawaii families.