SB 491 Hawaii Senate · 2026 Regular Session

RELATING TO HOUSING.

Summary

Establishes the Accessory Dwelling Unit Financing and Deed Restriction Program to be administered by the Hawaii Housing Finance and Development Corporation to allocate funds to the counties for the purchase of equity for eligible homeowners or homebuyers to finance construction costs, development costs, and non-reoccurring closing costs associated with the construction of an accessory dwelling unit and purchase deed restrictions on such property. Exempts the conveyance tax for certain properties for taxable years beginning on 1/1/2026. Effective 7/1/2050. (SD1)

Bill status passed 3 of 5 stages cleared

Introduction

Jan 2025

Committee Review

Feb 2025

Senate Passage

Feb 2025

House Passage

Governor

Introduced Jan 17, 2025 Last action Dec 8, 2025

Maddy AI version diff · 1 comparison

What changed between versions

SB491 → SB491_SD1 · 5 edits

MODERATE

This bill shifts the funding source for the Accessory Dwelling Unit (ADU) program from a 'dwelling unit revolving fund' to a 'rental housing revolving fund,' changing the program's focus from general ADU construction grants to purchasing equity in properties. It expands eligibility by allowing properties held in revocable living trusts and permits deed restrictions to take second position in certain community settings. The effective date is delayed to July 1, 2050, with tax exemptions applying starting January 1, 2026.

Scope change

The bill's scope expands from a general ADU construction grant program to an equity purchase program specifically targeting rental housing projects with low-income affordability commitments, while also broadening property eligibility to include revocable living trusts.

FISCAL

The funding source changed from the 'dwelling unit revolving fund' to the 'rental housing revolving fund,' aligning the program with rental housing goals.

ELIGIBILITY

Eligibility was expanded to include properties held in revocable living trusts, and the program now prioritizes projects with low-income affordability commitments.

REQUIREMENT

Deed restrictions may now take second position in circumstances where common interest communities require specific covenants to be in first position.

TIMELINE

The bill's effective date was moved to July 1, 2050, while tax exemptions apply to years beginning on or after January 1, 2026.

ENFORCEMENT

A new repayment mechanism was added requiring homeowners to repay the corporation's prorated share of the ADU's appraised value plus appreciation within 30 years or upon sale.

Floor votes

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Feb 12, 2025

Upper · Passed

Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM.

upper

Feb 12, 2025

Committee

Reported from HOU (Stand. Com. Rep. No. 332) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM.

upper

Feb 4, 2025

Upper · Passed

The committee(s) on HOU recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in HOU were as follows: 4 Aye(s): Senator(s) Chang, Hashimoto, Kanuha, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Aquino.

upper

Jan 27, 2025

Upper · Passed

The committee(s) on HOU has scheduled a public hearing on 01-30-25 1:10PM; Conference Room 225 & Videoconference.

upper

Jan 27, 2025

Committee

Re-Referred to HOU, WAM.

upper

Jan 21, 2025

Committee

Referred to HOU/EIG, WAM.

upper

Jan 17, 2025

Introduced

Introduced.

upper

1 primary · 0 co-sponsors