Honolulu’s Bill 7 housing program has helped bring hundreds of affordable apartments to neighborhoods near public transit.

A new report from the University of Hawaiʻi Economic Research Organization (UHERO) finds that allowing more apartments per project, streamlining permitting and making construction grants available earlier could help the city build on that progress.

The report, Assessing Honolulu’s “Bill 7” Housing Program, examines the city’s Affordable Rental Housing Program, which began in 2019 to encourage apartment construction on small lots. The program offers incentives such as fee waivers, grants and tax breaks in exchange for keeping most units affordable to moderate-income households.

Key takeaways from the Nov. 9 report

• More apartments are in the pipeline. As of September 2026, seven projects with 224 apartments had been completed since the program began, and another 776 apartments across 22 projects had received permits. Those permitted projects could help bring the program closer to the city’s goal of completing 500 apartments per year.
• Bill 7 makes small-lot projects more financially viable. On a representative 10,000-square-foot lot, researchers estimated that Bill 7 would allow 49 apartments, up from 26 under the zoning rules in place before 2026. The estimated return also improved, though it remained below the industry benchmark used in the study.
• Projects are close to public transit. Every Bill 7 project in the study is within a quarter mile of a bus stop, and six are within a half mile of a current or planned Skyline station.
• Several changes could help more projects move forward. Hig her borrowing and construction costs, along with longer permitting timelines, have made development more difficult. Researchers found that allowing more apartments per project could improve financial feasibility without increasing the city’s subsidy per apartment. The report also identifies opportunities to streamline permitting and make construction grants available earlier.

“Despite unexpected macroeconomic challenges, the Bill 7 program has produced hundreds of workforce housing units in central locations with excellent transit access,” the report said.

Read the full report on UHERO’s website.

UHERO is housed in UH Mānoa’s College of Social Sciences.