Maui County HOU Committee Meeting – June 3, 2026: ADU Bill Advanced, Molokai B&B Cap Approved, Workforce Housing Tax Exemption Deferred

The Housing, Land Use, and Planning (HOU) Committee of the Maui County Council met on June 3, 2026, starting at 9:08 AM and adjourning at 11:09 AM HST. The committee considered three bills: Bill 78 (2026) to comply with state law on accessory dwelling units (ADUs), Bill 84 (2026) to set a cap and spacing requirements for bed-and-breakfast homes on Molokai, and Bill 37 (2026) to create a real property tax exemption for qualified workforce housing developments. The committee voted to advance the first two bills and deferred the third.

Public Comments & Testimony

• Jonathan Johan Lal (on Bill 78) suggested that when ADU permits are submitted, the Planning or Public Works departments should coordinate with the Department of Health to review cesspool or septic capacity.
• Keo Pouni Kahovay Ipaina testified on Bill 84 and Bill 37, asserting that decisions regarding royal patent lands are being made without notifying the descendants of original patent holders, and requested that such notification occur. They also stated that TMK information is being illegally changed.
• Tom Crowley (on Bill 37) described the problem of new affordable homeowners being subject to much higher property taxes if they miss the filing deadline for the homeowner exemption, and urged the committee to address the underlying issue.

Discussion Items

Bill 78 (2026) – Accessory Dwelling Units

• Purpose: To amend the Maui County Code to allow at least two accessory dwellings per residentially zoned lot, consistent with state Act 39 (2024), which requires counties to adopt an ordinance by December 31, 2026.
• Planning Department Presentation: Gregory Post, Administrative Planning Officer, reviewed the bill’s background. Current code allows one ADU per lot under 7,500 sq ft and two for larger lots (with island-specific limits for Lānaʻi and Molokaʻi). The proposed change would allow up to two ADUs regardless of lot size or island location. The department recommended 13 modifications to the planning commissions, including: (4) exempting Lānaʻi project districts because they are low-density; (8, 11) allowing ADUs in zero-lot line districts; (9, 10) removing limitations in specific project districts; (12) maintaining existing limits in rural districts (not subject to state law); and (13) requiring a determination of adequate water supply. The Maui, Molokaʻi, and Lānaʻi planning commissions all recommended approval with the department’s modifications.
• Fire Department Concerns: Captain Voss noted that increased density could tip access and water supply requirements, especially in subdivisions originally designed for fewer dwellings. He cautioned that owners might not realize infrastructure is inadequate until they apply for permits.
• Committee Discussion: Members raised issues of lot size, setbacks, existing CC&Rs that prohibit ADUs (which state law does not override for covenants recorded before Act 39’s effective date), infrastructure capacity, and the need for public education. An amendment was offered by Member Paulton to add language clarifying that the ordinance does not affect conditional zoning agreements executed before its effective date. The chair also proposed amendments to Section 19.35.050 (rural district limits) and Section 19.35.070 (parking language referencing Chapter 19.36B). Both amendments were approved by voice vote (7 ayes).
• Vote: The committee voted 7 ayes (with Members Batangan and Sugimura excused) to recommend passage on first reading of Bill 78 as amended (CD1).

Bill 84 (2026) – Bed-and-Breakfast Cap on Molokaʻi

• Purpose: To establish a maximum of five bed-and-breakfast (B&B) home permits island-wide on Molokaʻi and require a minimum separation distance of 1,000 feet between B&Bs (as originally proposed).
• Molokaʻi Planning Commission Recommendation: The commission recommended approval with a cap of five B&Bs allocated to specific areas (Kualapuʻu, Kaunakakai, Pukoʻo, and Wailua) and a minimum separation of 3,000 feet (measured from property lines). The motion before the committee included this recommendation.
• Discussion: Member Rollins Fernandez, the bill’s introducer, supported the commission’s approach, noting that setting a cap early avoids the problems seen with short-term rental homes in other areas.
• Vote: The committee voted 8 ayes (with Vice Chair Batangan excused) to recommend passage on first reading.

Bill 37 (2026) – Real Property Tax Exemption for Workforce Housing

• Purpose: To create a property tax exemption for developers of qualified residential workforce housing developments, aimed at preventing new owner-occupants from being charged higher non-owner-occupied rates if they miss the homeowner exemption filing deadline.
• Views: Council Chair Lee, the introducer, requested the item be deferred, citing lack of support from the Finance Department and the need for more time to develop a workable solution. Finance Director Martin stated the department is open to discussion but noted software and staffing limitations. Councilmembers Johnson and Paulton expressed interest in finding a path forward, with suggestions to model the exemption after the Hawaiian Home Lands program or the existing deed-restricted valuation process.
• Outcome: The committee voted without objection to defer Bill 37.

Key Outcomes

• Bill 78 (2026) – Passed out of committee on a 7–0 vote (with two excused) as amended. The amendments included: (1) inserting language preserving existing conditional zoning agreements; (2) maintaining current ADU limits in rural districts (1 per lots <7,500 sq ft, 2 for larger, with island-specific limits for Lānaʻi and Molokaʻi); and (3) clarifying that ADU parking must comply with Chapter 19.36B (bedroom-count-based parking). The bill proceeds to the full Council for first reading.
• Bill 84 (2026) – Passed out of committee on an 8–0 vote (one excused), incorporating the Molokaʻi Planning Commission’s recommendation of a 5-cap and 3,000-foot separation requirement. Proceeds to first reading.
• Bill 37 (2026) – Deferred without objection. The committee will continue to work with the Finance Department and other stakeholders to address the underlying tax burden on new affordable homeowners.