USA – HAWAII Trends and Developments Contributed by: Lisa Broulik, Matthew Cohen, Michelle Chapman and Jon Pang, Case Lombardi, A Law Corporation
Modern Urbanism: Adaptive Reuse and Transit- Oriented Development Honolulu’s urban development strategy emphasises internal growth as greenfield development faces geo - graphical and political constraints. Under Ordinance 19-8 (2019), the City and County of Honolulu estab - lished a regulatory framework to facilitate the adaptive reuse of commercial office space for affordable hous - ing. However, as of March 2026, large-scale conver - sions have not reached completion due to significant structural and fiscal challenges. Converting office tow - ers, which typically have centralised utility systems, requires substantial investment to install independent water and wastewater lines for each unit, often involv - ing core-drilling through post-tensioned concrete. Furthermore, deep floor plates in legacy commercial structures often fail to meet residential egress and nat - ural light requirements for bedrooms, resulting in non- revenue generating “dead space” that compromises project feasibility. Infrastructure constraints, including Board of Water Supply and wastewater capacity limi - tations, further restrict project viability. The implementation of Ordinance 19-8 has been lim - ited primarily to small-lot, ground-up developments rather than converting existing high-rise structures. As reported in the 2026 State of the City address, only six projects have been completed under the programme, mostly as new construction. New legislative proposals aim to expand the eligibility criteria for these regu - latory relaxations by adjusting lot size and building height parameters. Transit-Oriented Development (TOD) has also become a driver of growth on Oʻahu as the “Skyline” rail sys - tem progresses. The master-planned community of Hoʻopili in West Oʻahu is designed around three rail stations: Kualakaʻi, Keoneʻae and Honouliuli. Hoʻopili neighbourhoods such as ʻAhakea and Alana are deliv - ering mixed-use units within proximity to rail plat - forms. These developments utilise “FLEX Homes” to integrate residential and business uses. The state’s objective is to create “20-minute neighbourhoods” by aligning high-density housing with bike paths and bus-to-rail hubs.
Tourism Crackdown on short-term rentals
The legal status of transient accommodations in Hawaiʻi is evolving. In 2024, the state legislature amended HRS Section 46-4 to give counties author - ity to phase out non-conforming land uses, thereby facilitating the gradual elimination of short-term rent - als (STRs) that were previously permitted or grandfa - thered, partly with the intent of stabilising resale value. This legislation prioritises long-term housing inventory over visitor accommodations. Pursuant to this author - ity, Maui County is implementing a bill to phase out approximately 7,000 units on the “Minatoya List” by 2031. On Oʻahu, a recent ordinance now restricts new STRs to resort hubs such as Waikiki, Ko Olina and Turtle Bay, while maintaining a 90-day minimum rental period in other zones. In addition to the recent legislation, the Honolulu Department of Planning and Permitting (DPP) is reportedly looking to increase enforcement against improper STR uses. Properties that are legally reg - istered to operate a STR, and those that have been issued a notice of violation or order, are displayed on a publicly available mapping system published online by DPP. Recent developments in resort zones also signify a transition toward a model effectively separating visi - tor short-term accommodations from the local hous - ing stock. For example, major 2026 capital projects include the USD180 million renovation of the Mauna Kea Beach Hotel, restoration of the Moana Surfrider, and construction of a new 515-room, 36-storey tower In 2025, the Hawaiʻi state legislature established the nation’s first climate impact fee, known as the “Green Fee”. The fees are intended to address the need to build resiliency against the impacts of climate change and tourism. As of 1 January 2026, the Green Fee increased Hawaiʻi’s transient accommodations tax (TAT) rate by 0.75%. The TAT generally applies to hotel stays, vacation rentals, timeshare units and similar accommodations rented to visitors for less than 180 consecutive days. at the Hilton Hawaiian Village. Tourism: new “Green Fee”
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