Governor Josh Green signed Senate Bill 2061 into law as Act 121 on June 23, and it deserves attention whether you're a local family priced out of Oahu's market or an investor tracking how the state is trying to solve its affordability problem. The law strengthens Hawaii's 99-year leasehold program for condominiums built on state and county land, fixing a design flaw that had stalled the state's very first project before it could get off the ground. If you've assumed homeownership in Hawaii requires inherited land or a seven-figure budget, this program is built to change that math for a limited pool of qualified local buyers.
What Act 121 Actually Changes
Act 121 builds on Act 97, passed in 2025, which created a pilot leasehold condominium program within the Hawaii Community Development Authority. The original pilot required units to stay owner-occupied for the entire 99-year lease term, a far stricter standard than HCDA's usual two-to-ten-year residency requirement. That mismatch made lenders and prospective buyers nervous and effectively froze the program before HCDA could issue a single lease. Act 121 realigns the owner-occupancy rules with HCDA's more familiar practice while still protecting the program's affordability goals, giving the agency workable rules it can actually build a project around.
Who Qualifies
The law requires at least 60% of units in a leasehold project to go to households earning no more than 140% of the area median income, and every unit must be owner-occupied by a qualified local resident rather than held as an investment or rental. In practice, the target buyer is a local family with a steady but unremarkable income who has been shut out by a statewide single-family median sitting above $1.1 million. Because the state or county keeps ownership of the land itself, buyers only pay for the structure sitting on top of it — that's where the real savings come from.
The Kakaako Project to Watch
The first real test of this program is a planned HCDA pilot at the corner of Kapiolani Boulevard and Ward Avenue in Kakaako. Site details and final lease terms are still being worked out, but this project is the one that will show whether the leasehold model can actually deliver units at scale, not just on paper. State Sen. Stanley Chang, who chairs the Senate Housing Committee and has championed similar "ALOHA Homes" proposals for years, called Act 121 a step toward restoring realistic homeownership for local families.
What This Means for Buyers, Sellers, and Investors
If you're a first-time buyer, keep an eye on HCDA's announcements about the Kakaako project and any future sites, and get a sense of your household income relative to 140% of AMI now so you're ready to move when applications open. If you own or are considering selling a condo in the affordable-to-mid price tier, understand that new leasehold supply will eventually compete at that end of the market, even if it takes a few years to materialize. And if you're an investor, this program isn't for you — the owner-occupancy requirement rules out rental use entirely.
Where the Broader Market Stands
This law arrives while the rest of Hawaii's housing market is still working through familiar pressures. Statewide single-family median prices are hovering above $1.1 million, up modestly year over year, while condo prices sit closer to $525,000 to $530,000. Mortgage rates have held in the mid-6% range through mid-summer, and the Federal Reserve's more cautious tone means buyers shouldn't count on relief there anytime soon. Days on market have crept up for both homes and condos compared to a year ago, giving buyers a little more breathing room to negotiate — though condo buyers still need to factor in rising insurance costs and the risk of special assessments when running the numbers on any building.
A single law won't solve Hawaii's affordability crisis, but Act 121 is a genuinely new tool the state hasn't tried before, and it's worth watching closely if you or your family have been waiting for a realistic entry point into ownership here. If you want to talk through how this or any other 2026 legislative change affects your specific buying or selling plans, reach out — I'm happy to walk through it with you.