A 370-unit mixed-income residential project in Honolulu’s Kakaako neighborhood is officially resuming development following the passage of new state legislation. Hawaii Gov. Josh Green recently signed Senate Bill 2061 into law, effectively easing prior leasehold restrictions that had temporarily stalled the project due to a lack of buyer interest. The Ko Laila LLC development, situated at the corner of Ward Avenue and Kapiolani Boulevard, serves as the pilot for the Hawaii Community Development Authority’s (HCDA) first-ever 99-year leasehold program.

The HCDA originally acquired the 26,626-square-foot parcel in January 2025 to test a new model for increasing local housing inventory. Under the 99-year leasehold initiative, the state plans to sell both affordable and market-rate condominium units built on government-owned land directly to qualified residents. By utilizing a long-term ground lease rather than traditional fee-simple ownership, the program aims to provide an alternative pathway to homeownership in Honolulu’s high-priced urban core.

Development was initially paused late last year as economic uncertainties and stringent leasehold regulations dampened prospective buyers’ interest. According to HCDA Executive Director Craig Nakamoto, the newly enacted legislation addresses those problematic restrictions, providing the agency with the necessary flexibility to make the units more competitive and marketable. With the legislative hurdles now cleared, the HCDA will begin updating its administrative rules in September to align with the new regulations.

The resumption of the Kakaako development marks a renewed effort by the state to utilize state-owned land for workforce and mixed-income housing. Project officials are actively preparing for the next phases of the rollout, with the HCDA aiming to launch official presales for the condominiums in the first quarter of 2027.