WeVote
Log In

Bill

Bill

GM 1221

Informing the Legislature that on June 8, 2026, the Governor signed the following bill into law: SB2061 SD2 HD2 CD1 (ACT 121).

2026 Regular Session

Hawaii’s new law requires urban redevelopment condo units to be owner-occupied, limits rentals, and sets eligibility, buyback, and enforcement rules to preserve affordability.

Received.
#act121
0
WeVote Research Nonpartisan
Bill Summary · GM 1221

Overview

  • Bill: SB2061, SD2, HD2, CD1
  • Jurisdiction: Hawaii
  • Session: 2026
  • Title: Relating to Residential Condominiums
  • Status: Signed into law as ACT 121 on June 8, 2026

This summary explains the bill’s purpose, main provisions, who is affected, and key procedural/timeline aspects.

Purpose and Intent

  • The act reforms the sale and management of leasehold residential condominium units within urban redevelopment sites in Hawaii.
  • It emphasizes owner-occupancy, attempted revenue-neutral development, and enhanced enforcement of occupancy rules.
  • The goal is to limit non-owner-occupied use (e.g., rentals) of condominium units within designated urban redevelopment areas and to create a framework for sale, buyback, and transfer that preserves affordability and occupancy.

Key Provisions and Changes

Section 1 – Definition of Owner-Occupied Residential Use

  • Redefines “owner-occupied residential use” to align with uses currently permitted in existing residential zones, while clarifying that owner-occupancy includes, and is not limited to, traditional owner-occupied use.

Section 2 – Rules and Guidelines for Redevelopment Sites

  • Residential condo units within urban redevelopment sites shall not be advertised for rent, rented, or used for otherwise non-owner-occupied residential use.
  • The authority may set penalties for violations, including potential forced sale of a unit.
  • Development should be revenue-neutral where possible (policy goal).
  • Urban redevelopment sites should maximize walkability (policy objective).

Section 3 – Sale and Eligibility Rules; Buybacks

  • The Hawaii Community Development Authority (or successor agency) must adopt rules for selling leasehold interests in these units, with leases of 99 years.
  • Initial offerings must target eligible buyers for owner-occupied residential use.
  • Requirements for eligible buyers:
    • Must be a qualified Hawaii resident, with residency and occupancy restrictions defined by future rules.
    • Must primarily use the unit as owner-occupied; rental or subleasing is largely restricted.
    • Must not own other real property (including other residential or non-residential property) or hold certain trust beneficiaries interests while owning a unit in the redevelopment site.
    • If the buyer or spouse buys additional real property or becomes a beneficiary of a trust holding property, the buyer must sell the unit to another eligible buyer or dispose of the other property within six months.
  • At least 60% of units should be sold to individuals/families with income up to 140% of the area median income (AMI).
  • If a unit not subject to income restrictions remains unsold after 60 days from initial offering, it may be sold to other buyers without an owner-occupancy requirement.
  • Strict enforcement of owner-occupancy, with possible prohibitions on renting/subleasing; the rules may set minimum days residents must live on-site and maximum days non-residents may access the property.

Section 3 – Additional Provisions for Transfers and Buyback

  • The authority retains the right of first refusal to purchase a leasehold, with buyback pricing to be determined by the authority through established rules.
  • If the authority does not exercise its right, the owner may sell to an eligible buyer.
  • Upon the death of the owner, the heir may transfer the leasehold by devise or other real property transfer, provided heirs meet section (a) requirements; if not, the heir must sell to an eligible buyer.

Section 4 – Repeals

  • Repeals a prior provision (206E-288) related to condominium development and redevelopment, aligning statutory framework with the new scheme.

Section 5 – Effective Date

  • The act takes effect upon approval (June 8, 2026).

Who Is Affected

  • Owners and prospective buyers of leasehold residential condominium units within urban redevelopment sites.
  • The Hawaii Community Development Authority (or corresponding authority) responsible for administering rules on sale, eligibility, buyback, and enforcement.
  • Households and individuals with income up to 140% AMI who qualify as owner-occupants.
  • Heirs or beneficiaries inheriting such leaseholds, subject to occupancy and eligibility requirements.

Procedural and Timeline Details

  • Effective date: Upon approval (June 8, 2026).
  • The act establishes a multistep regulatory framework:
    • Rulemaking by the redevelopment authority (for eligibility, occupancy, and sale conditions).
    • Initial 60-day window to determine eligible buyers for certain units.
    • Ongoing enforcement mechanisms for owner-occupancy and penalties for violations, including possible forced sale.
    • Buyback and right-of-first-refusal processes governed by authority rules.
  • Applies to all existing and future residential condo units within designated urban redevelopment sites under the authority’s purview.

Potential Impacts and Considerations

  • Increased emphasis on owner-occupancy potentially reducing investor-driven rentals within redevelopment sites.
  • Affordability impact through targeted sale prohibitions and income-restriction requirements.
  • Administrative and regulatory burden on the redevelopment authority to implement and enforce rules and processes.
  • Possible legal and market implications for current condo owners, heirs, and prospective buyers in redevelopment zones.

If you’d like, I can provide a section-by-section line-item comparison with the prior statute or a concise checklist for stakeholders (owners, buyers, and developers) to navigate the new rules.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.