HB516 Summary

• Repeals section 46-4.8 of Hawaii Revised Statutes, which mandated that counties allow construction of at least two accessory dwelling units (ADUs) on all residentially zoned lots.

• Establishes the Accessory Dwelling Unit Housing Development Program administered by the Hawaii Community Development Authority to award matching funds (one-to-one basis, up to a maximum amount) to homeowners who construct ADUs in compliance with county requirements.

• Creates the Accessory Dwelling Unit Housing Development Special Fund to be funded by legislative appropriations, public and private contributions, and interest earnings to support the matching funds program.

• Exempts rental income from accessory dwelling units funded through this program from general excise tax for the first three years of operation, with the tax savings requirement passed through to renters without rent increases.

• Takes effect July 1, 2025, and includes appropriations to the Hawaii Community Development Authority for fiscal years 2025-2026 and 2026-2027 (amounts not specified in bill text).