POSSIBLE INCOME WITH ACCESSORY DWELLING UNITS

Big Island homeowners can now build up to three Accessory Dwelling Units (ADUs) per property in residential and agricultural zones under Bill 123, which became effective in late 2024. Each ADU has a maximum size of 1,250 square feet, and a minimum of one parking space is required. While one ADU can be used for short-term vacation rentals in residential areas, the primary intent of the bill is to create more long-term, stable housing on the island. Property owners also need to ensure their property's infrastructure, such as sewage disposal and water supply, meets the new requirements, potentially requiring upgrades like septic system installations.

Key Provisions of Bill 123:

• Number of ADUs: You can build up to three ADUs per property.

• Maximum Size: Each ADU is limited to 1,250 square feet of interior living space.

• Location: ADUs are permitted in residential (RS) and agricultural (A) zoning districts.

• Unit Type: ADUs can be attached to or detached from the primary dwelling.

• Rental: Only one ADU can be used for short-term vacation rentals.

• Parking: Each ADU must have a dedicated parking space and a driveway.

• Infrastructure: Upgrades to infrastructure, like water and sewage, may be required before ADU construction.

Goals of the New Law:

• Increase Housing Supply: The law aims to create more long-term housing to address the housing shortage.

• Support Families: ADUs provide space for aging parents, adult children, or other family members.

• Generate Rental Income: The bill offers opportunities for homeowners to generate rental income.

• Promote Smart Growth: By utilizing existing lots, the bill encourages development within existing communities

  rather than expanding into large agricultural areas.

Other Possibilities with this ADU provision:

• Long Term Rental may be allowed with the ADU's(check with County to Verify)

  Hawaii County rules for long-term rentals at time of website publishing (9/17/2025) include:

  You must have a rental agreement for 31 consecutive days or more.

  If you rent the property as a long-term rental, you do not need to obtain a Short-Term Vacation Rental (STVR) permit from Hawaii County.

  Zoning compliance: A long-term rental can be operated in any zone that permits residential use, including residential

  and agricultural zones where most short-term rentals are now prohibited.

• Permitted activities on Ag-zoned land at this time include animal hospitals, aquaculture, botanical gardens and kennels.

• Must apply for special permit for guest ranch, day camps, retreat center, etc.

• For full list of A zoning permitted uses go to this link;

https://www.planning.hawaiicounty.gov/home/showpublisheddocument/301481/637203338523370000