UHERO report evaluates Honolulu’s Bill 7 housing program

A report from the University of Hawaiʻi Economic Research Organization (UHERO) assesses the impact of Honolulu’s Bill 7 housing program, which was established in 2019 to encourage affordable apartment development on small lots.

Since the program's inception, 85 projects totaling 2,280 units have entered the program, though only seven projects with 224 completed units have been finished. This remains significantly below the city's statutory goal of 500 completed units per year. However, as of September 2026, 22 additional projects containing 776 apartments have received permits.

The report notes that Bill 7 improves financial feasibility by allowing higher density. On a representative 10,000-square-foot lot, the program could allow 49 apartments compared to 26 under previous zoning rules. Despite this, the estimated return on cost remains below the 6.6% industry benchmark, which researchers suggest contributes to slower completion rates.

Challenges cited include high borrowing and construction costs, as well as permitting timelines that exceed the 90-day target. UHERO suggests that allowing more apartments per project and providing construction grants earlier could help the city meet its housing goals.