Proposed Housing Bills May Worsen Oahu Labor Shortages and Increase Operating Costs
The Honolulu City Council is currently deliberating on Bills 53 (2025) and 17 (2026), measures that critics contend will further inflame Oahu's acute housing shortage. If enacted as proposed, these bills could significantly compound the challenges businesses face in attracting and retaining employees, potentially leading to increased operating costs and reduced competitiveness.
The Change
Bills 53 (2025) and 17 (2026) are under consideration by the Honolulu City Council. While specific details of their proposed amendments are still in flux, the general sentiment expressed by concerned parties is that these bills, if passed without significant revision, will favor existing homeowners by potentially introducing new restrictions or increasing the complexity of housing development and rental regulations. This approach is seen by some as prioritizing the concerns of a segment of incumbent voters over the pressing needs of families and individuals struggling with Hawaii's high cost of living and limited housing availability.
The outcome of these deliberations, expected within the coming months, could directly impact the supply of available housing units on Oahu. The current housing deficit is a primary driver of the island's high cost of living, which in turn affects labor markets and business operations.
Who's Affected
Real Estate Owners: Property owners, developers, and landlords may face increased regulatory hurdles or zoning changes that impact the feasibility and profitability of new developments or rental income. Property managers could see increased compliance costs and more complex tenant screening processes if regulations become more stringent.
Small Business Operators: With a limited housing supply and high cost of living, businesses already struggle to attract and retain employees. If these bills worsen the housing situation, it will intensify pressure on businesses to offer higher wages and benefits simply to compete for a shrinking pool of available workers. This directly impacts operating costs and profit margins, particularly for small businesses with limited pricing power.
Entrepreneurs & Startups: For companies reliant on attracting skilled talent to scale, the worsening housing crisis presents a significant barrier. High housing costs make it difficult to recruit from the mainland and may even drive local talent away. This can stifle innovation and growth opportunities.
Tourism Operators: Hotels, restaurants, and tour operators are heavily reliant on a stable workforce. A continued housing crisis means ongoing challenges in hiring and retaining staff, potentially affecting service quality and operational capacity during peak seasons.
Healthcare Providers: The healthcare sector in Hawaii already grapples with staffing shortages. If housing becomes even less accessible, it will further deter medical professionals from relocating to or remaining on Oahu, exacerbating the strain on existing healthcare services and potentially impacting patient care.
Second-Order Effects
- Worsened housing affordability → Increased demand for higher wages → Higher labor costs for businesses → Reduced business profitability and potential price increases for consumers.
- Constrained housing development → Limited labor pool for construction and service sectors → Stagnant or declining local economic diversification → Reduced tax revenue for public services.
- Housing crisis impact on cost of living → Difficulty retaining essential service workers (teachers, first responders) → Strain on public services and quality of life.
What to Do
Businesses should closely monitor the progress of Honolulu City Council Bills 53 (2025) and 17 (2026), particularly as public hearings and council votes approach. The specific language and amendments adopted will determine the precise impact.
Action Details: Monitor city council meeting agendas and public testimony related to Bills 53 (2025) and 17 (2026). Pay close attention to any amendments that could alter zoning laws, development requirements, or rental property regulations. If the bills move towards final passage with provisions that restrict housing supply, businesses should evaluate the potential impact on their staffing costs and explore strategies for wage adjustments, flexible work arrangements, or operational efficiencies. Engaging with council members or industry associations to voice concerns during public comment periods is advisable for roles most directly impacted.
