2026-09-10 · Hawaii · Legislation

A class of Hawaii condominium units is being created where the rental restriction comes from a state agency’s rules, not from the declaration. Act 121 (2026) restructures the Hawaii Community Development Authority’s Ninety-Nine Year Leasehold Program for residential condominium units in urban redevelopment sites. Signed June 8, 2026, effective that day.¹²

It amends HRS §§ 206E-281, 206E-283, 206E-284 and 206E-288. It does not amend chapter 514B.

What HCDA must now put in its rules

The Act works by directing rulemaking rather than by legislating the terms directly. HCDA must adopt rules that:

• “For the period within sixty days from the initial offering, require residential condominium units within the project to be offered only to eligible buyers… for owner-occupied residential use,” with HCDA setting “the durational requirements for owner-occupied residential use”;
• require an eligible buyer who holds other real property or a beneficial trust interest to “sell the leasehold interest in the residential condominium unit to another eligible buyer within six months from the date of purchase or acquisition” or divest the beneficial interest in the same period;
• “require at least sixty per cent of the residential condominium units be sold to an individual or household with an income of up to one hundred forty per cent of the area median income”;
• allow a unit that is not income-restricted and “not sold within sixty days from the initial offering” to be sold to other buyers “without an owner-occupancy requirement”;
• include “strict enforcement of owner-occupancy, unless otherwise exempted by rule, including a prohibition on renting or subleasing a residential condominium unit within an urban redevelopment site to any tenant or sublessee”; and
• establish “buyback pricing similar to other state agencies’ existing pricing formulas.”

The structural change

The rental prohibition used to sit in the statute. Act 121 moves it into HCDA rulemaking. That is the change most worth noticing, because it means the operative detail — the exemptions, the enforcement mechanism, the definition of a prohibited sublease — will live in administrative rules that have not been adopted yet.

1. SB 2061, C.D. 1 (enrolled) — Act 121, Session Laws of Hawaii 2026 ↩
2. Governor's Message 1221 — signing of Act 121, June 8, 2026 ↩
3. Legislative Reference Bureau, Bills Enacted — Regular Session of 2026 ↩