ADUs in Hawaii

Where can I live in Hawaii? How can I afford housing? These may be questions on many Hawaii residents’ or relocators’ minds due to some real estate challenges of living in Hawaii.

Accessory dwelling units or ADUs play an innovative role in offering more housing in Hawaii at a reasonable price and in offsetting the cost of the main dwelling unit. Land in the islands of Hawaii is limited, with the state having a housing shortage, especially in the city of Honolulu. In a report from the state that measured housing demand in Hawaii from 2015 to 2025, it was estimated that around 65,000 more housing units were needed between 2015 and 2025. In addition to limited housing, the cost of living in Hawaii is higher than most places in the U.S. ADUs offer one option to help make living in paradise possible.

What is an ADU in Hawaii?

Accessory dwelling units or ADUs were introduced in Honolulu in 2015 as one possible solution to the Hawaii housing shortage. An ADU is another place to live or “dwelling unit” on a single-family lot. It includes a full kitchen with an oven, a bathroom, a sleeping area, and at least one parking stall. In other places, ADUs are called in-law apartments or granny flats. 

An ADU can be a completely separate building, an extension of the main house, or a conversion of an existing structure. This means a single-family lot landowner could build a separate little home, transform a large shed into a home, or covert an existing portion of the house to include a kitchen and bathroom to create an ADU.

What is an Ohana unit?

Not to be confused with an ADU, an Ohana Unit is also a permitted second home on a single-family lot. Like the name says, they are typically for family members desiring a space for their parents, children, aunties, uncles, or other multi-generational family members. 

The main difference between an ADU and an Ohana unit is that Ohana units can only have a “wet bar,” or an eating area with a sink, refrigerator, and stovetop – not a full oven. They also can only be rented to a family member, which is agreed upon through the signing of a restricted covenant agreement. Ohana units were first introduced to Oahu around in the late 1980s, and many single-family Hawaii homes are set up for multi-generational living – some legally permitted while some are not. 

Why would I build an ADU on my property?

There are many benefits to building an ADU in Hawaii, including the following:

  • Rental Income. Earn extra income by renting out your ADU. This income could subsidize your monthly mortgage payment. Note that ADUs must be rented out for six months or more and cannot legally be used as vacation rentals or an Airbnb – unless you gain a separate conditional use permit.
  • Neighborhood diversity. If you rent, you might enable some people to live in your neighborhood that otherwise would not. Having a variety of income levels and people from diverse backgrounds can create a richer neighborhood ‘ohana.
  • Appreciation. Building an ADU adds value to your property. Speak with your real estate agent about the possible appreciation that your property could accumulate if you build an ADU.
  • Infrastructure. ADUs utilize existing infrastructure, like water, electricity, and waste management systems, thus avoiding the costs of creating and expanding utilities into undeveloped areas.
  • Keeping country county. Building additions in single-family home neighborhoods assists in preventing more undeveloped, rural areas from turning into urban areas with sprawling condo buildings. For example, Kakaako is an urban neighborhood with minimal single-family home lots or ADUS. However, the North Shore of Oahu is considered the country or a rural area, and thus is a prime place for homeowners to consider constructing an ADU.
  • Aging in place. You might not always need to live in the three-bedroom home on your lot, and it even might become too big to maintain. As you age, you might consider moving into the smaller ADU and renting out the large home on the lot.
  • Sustainable living. Since ADUs are required to be smaller, they often produce less water. Some homeowners decide to build ADUs with solar panels, efficient appliances, and more features to practice sustainability.

What are the rules for ADU in Hawaii?

The City and County of Honolulu’s Department of Planning and Permitting (DPP) issues permits for constructing ADUs and thus is responsible for regulating them on the island of Oahu. To legally build one of these complimentary little homes, there are eight main rules:

  1. Your lot’s zone must be one of the following: R-3.5, R-5, R-7.5, R-10, R-20, Country District
  2. Your lot must be at least 3,500 square feet. For lots that are 3,500 to 4,999 square feet, an ADU that is 400 square feet can be built. For lots that are 5,000 square feet or more, an ADU that is 800 square feet of living space can be built.
  3. You must currently have one complete dwelling or home on your lot. An ADU cannot be built on lots that have duplexes, an apartment building, or more than one home already on the lot. 
  4. Your lot cannot be landlocked, meaning your lot needs to at least be connected to a road via a driveway. This driveway can also be an easement through an adjoining lot. 
  5. You must have a space for one more parking spot within the lot’s parking areas. This requirement is waived if your lot is within a half-mile of a planned Honolulu Transit Rail station
  6. The landowner or a family member of the landowner must live on the property – either in the main home or the ADU – after the ADU’s construction is complete. The non-lived-in building can be legally rented to non-family members.
  7. You do not have any covenant restrictions on your lot prohibiting an ADU. For example, if you live in a planned master community, such as those in Ewa Beach, you may be in a Homeowner’s Association (HOA) that prohibits the construction of ADUs. Check before applying for the ADU permit.
  8. Record your covenant once you have completed the ADU build. To make your ADU completely legal record with either the Bureau of Conveyances or the Land Court of the State of Hawaii. This recording also ensures that the ADU cannot be sold separately or that the lot cannot be divided into two separate properties. The ADU is legal as an accessory building to the main building on the property.

ADUs in Hawaii is a fairly new option for landowners and they create an enticing option for additional rental income. For more information, contact a trusted contractor in Hawaii or the Honolulu Department of Planning and Permitting.