The exemptions for the central Kaka'ako high-rise would allow the developer to build a tower close to three times the current 65-foot height limit.
Opponents who live in the Imperial Plaza complex said the project is too big for such a small space.
"This project is a nightmare. I would not even want to run tower crane on this project. It is so tight there is no laydown. It is going to be a very dangerous situation," said Isaac Smyth, a retired crane operator.
Developer Franco Mola said he is asking for exemptions for density and height in exchange for building 192 affordable units.
The next-door neighbors fear their breezes and views will be blocked and shade could be a problem for the solar system for an adjacent business.
"Anyone can understand a few minor exemptions but when the requests are for so many variances and huge adjustments that it seems obviously not suitable for the size of the property," said Clara Morikawa.
Mola met with his potential neighbors and offered to make some concessions, but not enough to appease the residents.
"We reduced some floors. We reduced some parking but the reality is that's not their interest. Their interest is not having a building next to them," Mola said.
Mola also countered the opposition with some 400 signatures on a petition in support of workforce housing, and others turned out to appeal for an option to commuting.
"It's important that young families are able to live in town in Honolulu. Right now the only affordable places are on the other side of the island, and my husband leaves before we get up and gets home after my baby goes to bed," said Lia Powers.
Area lawmakers asked the Hawaii Community Development Authority for more advance notice and more opportunity for public input.
Their message: proceed with caution.
"You will be establishing a bad precedent and you will be opening a gate of hell in Kaka'ako," said area resident Gerald Chun.
A final public hearing and vote on the project is set for July 3.
If the project is approved, the developer hopes to break ground by the end of the year and complete construction in 2015.