Honolulu Bill 7 Falls Short of Housing Goals

A University of Hawaii report finds the affordable housing program has completed far fewer units than its annual target.

Updated on Nov. 9, 2026 in Construction

Isometric editorial illustration of unfinished concrete residential blocks, one framed in exposed steel, set against a distant green ridge under a pale blue sky. — The University of Hawaii Economic Research Organization found Honolulu's Bill 7 affordable housing program has completed only 224 units since 2019 against a goal of 500 a year. AI Illustration. Upload story photo >

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The University of Hawaii Economic Research Organization released a report finding Honolulu's Bill 7 affordable housing program falls short of its goals. Researchers recommended increasing units per project, accelerating permitting, and increasing subsidy amounts.

Why it matters

With only 224 units completed since 2019 against a goal of 500 a year, the program is not yet meeting the housing need it was designed to address. Permitting delays, high interest rates, and construction costs are making development harder for Honolulu builders.

Of 85 projects totaling 2,280 units that applied for permits as of early September, 776 units in 22 projects have been permitted but not completed. None of the 19 permits issued by July 2025 were ready within the required 90 days, and the median wait was 531 days.

The players

University of Hawaii Economic Research Organization

The University of Hawaii's research arm that conducts economic analysis on Hawaii's economy and public policy.

The details

Bill 7 offers waivers and incentives to Honolulu developers, and UHERO tested its effect by comparing a simulated project against standard zoning rules in place before 2026. A new ordinance that took effect in 2026 has further narrowed the program's advantage over standard development.

2019: Bill 7 was enacted.
July 2025: The cutoff for the 19 Bill 7 permits issued so far.
Early September 2025: 85 projects had applied for permits under the program.
2026: A new ordinance took effect, narrowing Bill 7's advantage.
November 9, 2026: The UHERO report was released.

Market Landscape

Bill 7 was designed to lower the cost of building in Honolulu by offering waivers and incentives, but the program's simulated return of 6.2% still sits below the 6.6% industry target. The 2026 ordinance narrowing its advantage over standard zoning suggests the gap between subsidized and conventional development is shrinking.

Honolulu residents seeking affordable units will see slow progress while hundreds of permitted units remain unfinished. Developers weighing Bill 7 must account for permit waits of more than a year and returns that trail the industry target.

The takeaway

Bill 7's shortfall shows that subsidies alone do not overcome permitting delays and high costs. Any fix will depend on faster approvals and changes to how many units each project can build.