The Honolulu City Council green-lighted a bill Wednesday that waives building permit and sewer hookup fees for homeowners who want to build accessory dwelling units — secondary rental units on their property.

Mayor Kirk Caldwell’s administration has been advocating for the measure in an effort to entice more homeowners to build affordable rental units. The city estimated earlier this year that the fee waivers could save homeowners up to $10,000.

When Caldwell signed a law last September establishing accessory dwelling units, it was a key part of the mayor’s push to increase the city’s affordable housing stock.

Mayor Kirk Caldwell signs Bill 20, allowing for the creation of accessory dwelling units.

Mayor Kirk Caldwell signs Bill 20 in September 2015, which allowed for the creation of accessory dwelling units.

Courtesy of Mayor Kirk Caldwell

But in the months since, only two units have been built. An additional 26 units have been permitted and seven more permits are waiting to be picked up.

Overall, the city has received 125 applications since Caldwell approved the measure last fall.

But 40 applications were rejected because there wasn’t adequate sewer capacity. Eight didn’t move forward because of lack of road access and seven were rejected due to zoning and association restrictions.

The city rejected just one due to lack of water hookups. The remaining 34 applications are still being processed.

The Rev. Bob Nakata, an affordable housing advocate who testifies frequently at the City Council and Legislature, said in a phone interview that he’s been disappointed at the number of accessory dwelling units permitted so far.

“There have not been as many of these being built as I thought there might be,” he said. He worried that high construction costs might be discouraging people from building rental units.

“I’m glad to see the Council trying to encourage the production of more ADUs,” he said, adding that waiving the fees might help offset those costs. “That’s a good move.”

In the meantime, the cost of housing continues to rise. The median price of a single-family home in Honolulu hit another record Wednesday: $760,000.

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