RELATING TO URBAN DEVELOPMENT.

HB541

HOUSE OF REPRESENTATIVES

H.B. NO.

541

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to urban development
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION
1
.
�
Section 46-4,
Hawaii Revised Statutes, is amended by amending subsection (g) to read as
follows:

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"(g)
�
Notwithstanding any
other law, county charter, county ordinance, or rule
,
for a county with
a population of less than five hundred thousand,
any administrative
authority to accept, reject, and approve or deny any application for
subdivision, consolidation, or resubdivision of a parcel of land that has been
fully zoned for residential use within the state urban district designated
pursuant to section 205-2 shall be vested with the director of the county
agency responsible for land use or a single county officer designated by
ordinance; provided that:

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(1)
�
The parcel of land
being subdivided is not located on a site that is:

���������
(A)
�
Designated as
important agricultural land pursuant to part III of chapter 205;

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(B)
�
On wetlands, as
defined in the United States Fish and Wildlife Service Manual, Part 660 FW2;

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(C)
�
Within a
floodplain as determined by maps adopted by the Federal Emergency Management
Agency;

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(D)
�
A habitat for
protected or endangered species;

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(E)
�
Within a state
historic district:

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(i)
�
Listed on the
Hawaii register of historic places or national register of historic places;

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(ii)
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Listed as a
historic property on the Hawaii register of historic places or the national
register of historic places; or

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(iii)
�
During the period
after a nomination for listing on the Hawaii register of historic places or
national register of historic places is submitted to the department of land and
natural resource's state historic preservation division and before the Hawaii
historic places review board has rendered a decision; or

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(F)
�
Within lava zone 1
or lava zone 2, as designated by the United States Geological Survey;

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(2)
�
Any
approval under this subsection shall be consistent with all county zoning,
development standards, and requirements pursuant to part II of chapter 205A;
and

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(3)
�
This
subsection shall not apply to county powers within special management areas
delineated pursuant to part II of chapter 205A.

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Neither this subsection, any permit
issued in accordance with this subsection, or structures developed pursuant to
this subsection shall create any vested rights for any applicant, permit
holder, or land owner."

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SECTION
2
.
�
Section 46-4.8,
Hawaii Revised Statutes, is amended to read as follows:

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"
[
[
]
�46-4.8[
]
]
�
Accessory dwelling units on residentially
zoned lots.
�
(a)
�

Each county shall adopt or amend accessory dwelling unit ordinances
pursuant to this section to help address deficits in their housing inventory
based on Hawaii housing planning studies published by the Hawaii housing
finance and development corporation.

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(b)
�

Except as provided in [
subsections
]
subsection
(c) [
and
(d)
], each county
shall
adopt or amend ordinances defining reasonable
standards that allow for
the construction of at least two accessory dwelling units, or the reasonable
equivalent, for residential use on all residentially zoned lots.

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(c)
�

A county that does not adopt or amend an ordinance pursuant to
subsection (b) shall adopt or amend ordinances pursuant to this subsection [
and
subsection (d), if applicable,
] defining:

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(1)
�
Districts that
authorize at least two accessory dwelling units, or the reasonable equivalent,
for residential use per each permitted existing single-family dwelling on a
residentially zoned lot; provided that these districts shall be:

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(A)
�
Consistent with
the county's comprehensive general plan;

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(B)
�
Reasonably
distributed throughout the county's various regional planning areas; and

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(C)
�
Estimated to add
development potential equivalent to half of the county's projected five-year
demand of needed housing units for ownership or rental as stated in the 2019
Hawaii housing planning study; and

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(2)
�
Districts that
authorize at least two accessory dwelling units or the reasonable equivalent
for residential use per each permitted existing single-family dwelling on a
residentially zoned lot within a reasonable walking distance to and from:

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(A)
�
Stations of a
locally preferred alternative for a mass transit project; and

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(B)
�
Urban principal
arterials as classified by the Federal Highway Administration for purposes of
federal-aid highways projects and situated within a primary urban area, urban
core, or county equivalent identified by a county comprehensive general plan.

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[
(d)
�
In addition to the requirements under
subsection (c), a county with a population of five hundred thousand or more
shall adopt or amend an ordinance defining reasonable standards to add
development potential in existing apartment districts or apartment mixed-use
districts equivalent to the county's projected five-year demand of needed
housing units for ownership or rental in the 2019 Hawaii housing planning
study.

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(e)
]
(d)
�
Accessory dwelling units developed pursuant
to this section shall be subject to all development standards adopted by the
respective county, including but not limited to those adopted pursuant to this
chapter.

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[
(f)
]
(e)
�
Nothing in this section shall preclude a
county from denying applications for permits if there is insufficient utility
infrastructure to service the additional demand caused by the development of
accessory dwelling units pursuant to this section.

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[
(g)
]
(f)
�
If a county does not adopt or amend zoning
ordinances pursuant to this section by December 31, 2026, the county shall not
deny any permit application on the basis of exceeding the maximum number of
housing units allowed if any owner, or their designated representative, of a
single-family dwelling in a residentially zoned lot applies for construction of
up to two accessory dwelling units, or the reasonable equivalent, until the
county adopts or amends an ordinance pursuant to this section; provided that a
county may deny a permit application on the basis of infrastructure, design, or
development standards.

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[
(h)
]
(g)

�
No county shall adopt prohibitions on using
any dwelling unit on a residentially zoned lot as separately leased long-term
rentals, as defined by each county.

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[
(i)
]
(h)
�
This section shall not apply to:

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(1)
�
Any area outside
of the urban district established by chapter 205;

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(2)
�
County powers
within special management areas delineated pursuant to chapter 205A; and

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(3)
�
Any area within an
urban district that a county deems to be at high risk of a natural hazard such
as flooding, lava, or fire, as determined by the most current data and maps
issued by a federal or state department or agency.

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[
(j)
]
(i)
�
Neither this section, any permit issued in
accordance with this section, or structures developed pursuant to this section
shall create any vested rights for any applicant, permit holder, or land owner.
�
This section shall not preempt a county's
ability to accept, review, approve, and deny permit applications.

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[
(k)
]
(j)
�
For purposes of this section[
,
"residentially
]
:

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"County" means a county of the
State with a population of less than five hundred thousand.

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"Residentially
zoned lot"
means a zoning lot in a county zoning district that is principally reserved for
single-family and two-family detached dwellings.
�
"Residentially zoned lot" does not
include a lot in a county zoning district that is intended for rural, low
density residential development, and open space preservation."

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SECTION
3
.
�
Section 46-143,
Hawaii Revised Statutes, is amended by amending subsection (d) to read as
follows:

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"(d)
�
An impact fee shall be substantially related
to the needs arising from the development and shall not exceed a proportionate
share of the costs incurred or to be incurred in accommodating the development.
�
The following factors
, as applicable,

shall be considered in determining a proportionate share of public facility
capital improvement costs:

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(1)
�
The level of
public facility capital improvements required to appropriately serve a
development, based on a needs assessment study that identifies:

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(A)
�
Deficiencies in
existing public facilities;

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(B)
�
The means, other
than impact fees, by which existing deficiencies will be eliminated within a
reasonable period of time; and

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(C)
�
Additional demands
anticipated to be placed on specified public facilities by a development;

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(2)
�
The availability
of other funding for public facility capital improvements, including but not
limited to user charges, taxes, bonds, intergovernmental transfers, and special
taxation or assessments;

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(3)
�
The cost of
existing public facility capital improvements;

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(4)
�
The methods by
which existing public facility capital improvements were financed;

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(5)
�
The extent to
which a developer required to pay impact fees has contributed in the previous
five years to the cost of existing public facility capital improvements and
received no reasonable benefit therefrom, and any credits that may be due to a
development because of the contributions;

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(6)
�
The extent to
which a developer required to pay impact fees over the next twenty years may
reasonably be anticipated to contribute to the cost of existing public facility
capital improvements through user fees, debt service payments, or other
payments, and any credits that may accrue to a development because of future
payments;

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(7)
�
The extent to
which a developer is required to pay impact fees as a condition precedent to
the development of non-site related public facility capital improvements, and
any offsets payable to a developer because of this provision; and

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(8)
�
[
The
]
For
a county with a population of less than five hundred thousand, the
square
footage of the development; provided that:

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(A)
�
In cases where the
developer is converting an existing structure, the square footage of the
existing structure shall be deducted from the total square footage of the
development when calculating impact fees; and

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(B)
�
In cases where the
public facility impacted is a water or sewage facility, the appropriate board
of water supply may choose to calculate impact fees based on the total number
of fixtures in the development, rather than by square footage."

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SECTION
4
.
�
Section 205-20,
Hawaii Revised Statutes, is amended by amending subsection (a) to read as
follows:

����
"
(a)
�
No private covenant for a residentially zoned
lot within an urban district
in a county with a population less than five
hundred thousand
recorded after May 28, 2024, shall limit the:

����
(1)
�
Number of
accessory dwelling units on that residentially zoned lot below the amount
allowed pursuant to section 46-4.8; or

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(2)
�
Long-term rental
of residential units on that residentially zoned lot."

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SECTION 5.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

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SECTION 6.
�
This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

Counties; Zoning; Land Use; Subdivision; Consolidation;
Resubdivision; Accessory Dwelling Units; Residentially Zoned Lots; Impact Fees
Assessment; Private Covenants; Urban District

Description:

Makes
certain urban development and land use requirements applicable only to counties
with a population of less than five hundred thousand, including:
�
vesting the director of the county land use
agency with the administrative authority to act on any application for
subdivision, consolidation, or resubdivision; the required adoption or
amendment of an ordinance to allow at least two accessory dwelling units,
subject to certain conditions, on all residentially zoned lots; the calculation
of certain school impact fees; and a prohibition on private covenants that
include certain limitations or restrictions for residentially zoned lots within
an urban district.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.