OHA urges repeal of Kakaako Makai residential ban to build workforce housing; HCDA and AG press for planning and legal fixes

The Office of Hawaiian Affairs asked the Legislature on Jan. 29 to repeal a long‑standing prohibition on residential development in parts of Kakaako Makai so the agency can pursue workforce housing on lands it controls.

Awina Lakaako, chair of the Board of Trustees at the Office of Hawaiian Affairs, told a joint hearing of the Senate Committees on Water and Land, Hawaiian Affairs and Housing that SB 534 would permit the Hawaii Community Development Authority to approve residential development on a defined Makai corridor, raise selected Ala Moana Boulevard height limits to 400 feet and require that at least "50% plus 1" of residential units in that corridor be reserved for workforce households. "OHA is committed to responsible development," Lakaako said.

The bill would also add owner‑occupancy requirements for units, create a Kakaako Makai special fund for park and shoreline amenities, and define an "essential workforce" preference (health care, education, law enforcement, civil service, construction and hospitality) for applicants who work within a five‑nautical‑mile radius of the site. Lakaako said OHA controls about 30 acres—roughly 14% of the 220 acres in Kakaako Makai—and proposed using land value and joint ventures with developers to finance both housing and OHA programs. She described three pathways for development under the proposal: an HCDA master plan approval, use of the 201H affordable‑housing process, or a partnership with the Department of Hawaiian Home Lands.

Why it matters: Lakaako framed the bill as a response to Hawaii’s housing crisis—high prices, high interest rates and outmigration—and said OHA’s 2012 conveyance of about 30 acres to settle unpaid public‑trust revenues was premised on entitlements that never materialized. She described finance tools OHA would explore, including retaining land while selling air rights and using deed restrictions and shared‑equity instruments to help qualified buyers with limited down payments.

HCDA, planning and environmental process: Craig Nakamoto, executive director of the Hawaii Community Development Authority, said HCDA shares an interest in housing but urged a planning‑first approach. "I think I'm not necessarily opposed to residential development in the MacKay area as, of course, is OHA. But where we differ is how do we get there?" he said, summarizing HCDA’s position that community engagement, an updated master plan and environmental review should precede statutory entitlements. Nakamoto pointed to existing HCDA parcels, City and County Gateway Park acreage and local pump‑station infrastructure as items that must be considered in any map of parcels eligible for 400‑foot heights.

Legal counsel and constitutional concerns: Deputy Attorney General Kevin Tong told the committees the attorney general’s office has concerns that parts of the draft statute could be challenged as special legislation under Article II, section 5 of the Hawaii Constitution and might authorize an illegal tax under Article VIII, section 3. Tong offered specific drafting recommendations—replacing some parcel‑specific mandates with a procedural authorization for HCDA to approve residential projects after HCDA rule‑based findings and public hearings—and confirmed the AG’s office would provide detailed amendment language.

Environmental, infrastructure and cost issues raised in testimony: Multiple speakers urged careful environmental and infrastructure review before any entitlements are granted. Planning and environmental commenters said state law (Chapter 343, Hawaii Environmental Policy Act) requires early environmental assessment and, likely, an environmental impact statement for projects affecting government lands or funds. Several opponents and several independent witnesses raised soil‑contamination, brownfield remediation and sea‑level‑rise concerns; the developer work across Ala Moana Boulevard was cited as precedent for costly soil mitigation. Lakaako and others said OHA intends to complete the horizontal infrastructure work, geotechnical studies, soil remediation and required environmental review to derisk vertical development for private partners.

Public testimony: Labor groups, construction and hospitality industry representatives, the Ironworkers Stabilization Fund and several unions testified in support, emphasizing workforce housing and local jobs. The Department of Hawaiian Home Lands testified it is willing to explore partnerships with OHA. Kamehameha Schools said it owns property within the statutory boundary but has no immediate plans to develop the Makai parcels and noted many of its leases extend into the 2030s and beyond. Friends of Kiawalos and several community speakers opposed the bill, arguing for protection of the last open coastal spaces, citing prior legislation (Act 317 of 2006) that limited Makai residential uses, and calling for complete environmental and technical review before any change.

Next steps: The committees heard testimony and questions but did not vote. Committee chairs announced decision‑making was deferred: the Water and Land and Hawaiian Affairs committees set decision‑making for Monday, Feb. 3 (1 p.m., room 229), and the Housing Committee deferred to Tuesday, Feb. 4 (1 p.m., room 220). No formal action on SB 534 was taken at the Jan. 29 hearing.

What remains uncertain: The bill as drafted would raise statutory height limits and FAR in a defined corridor, require a 50%+1 workforce set‑aside, and create new assessment and special‑fund language; the AG recommended redrafting several parcel‑specific provisions to avoid constitutional risk. HCDA asked for clear boundary language and urged that HCDA and community planning and environmental review occur before or as part of any entitlement changes. OHA representatives said they intend to complete environmental and remediation work and to seek federal funding where applicable.

The Legislature faces competing objectives: community preservation and shoreline access advocates want durable protections and study of contamination and sea‑level rise; OHA and supporters argue the lands can deliver workforce housing and revenue for native Hawaiian beneficiaries if entitlements and infrastructure are secured. The committees will weigh the AG’s drafting recommendations, HCDA’s process concerns and OHA’s development plan before deciding whether to advance SB 534.