Bill Text: HI HB678 | 2024 | Regular Session | Amended
Bill Title: Relating To Housing.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Engrossed - Dead) 2024-03-25 - Received notice of discharge of all conferees (Hse. Com. No. 457). [HB678 Detail]
Download: Hawaii-2024-HB678-Amended.html
HOUSE OF REPRESENTATIVES |
H.B. NO. |
678 |
THIRTY-SECOND LEGISLATURE, 2023 |
H.D. 1 |
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STATE OF HAWAII |
S.D. 2 |
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A BILL FOR AN ACT
RELATING TO HOUSING.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the State has a housing crisis. A 2019 study commissioned by the department of business, economic development, and tourism found that the State will require an additional 50,156 homes by the year 2025, with the city and county of Honolulu requiring 22,168 new units, Hawaii county requiring 13,303 new units, Maui county requiring 10,404 new units, and Kauai county requiring 4,281 new units. While this forecast projects an acute housing shortage, there has been a lack of measurable progress at the county level to enact policies that will stimulate housing production to meet the projected demand.
The legislature further finds that the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, reflects that the average thirty-year fixed residential mortgage interest rate has increased from 3.07 per cent in October 2021 to 6.90 per cent in October 2022, a one hundred twenty five per cent increase, which dramatically increases the monthly cost of owning a home for Hawaii residents and decreases the maximum sale price of income-specified units built under chapter 201H, Hawaii Revised Statutes. Furthermore, the one-month term secured overnight financing rate, which is a metric used by lenders to determine real estate construction loan interest rates, has increased from 0.05 per cent in November 2021 to 3.81 per cent in November 2022, a seventy-five-fold increase, dramatically increasing the cost of construction financing to build residential units. These increases in home loan and construction loan interest rates have rendered chapter 201H, Hawaii Revised Statutes, unusable by the home building community.
Accordingly, the purpose of this Act is to provide a new source of interim financing for affordable housing projects using the housing program in chapter 201H, Hawaii Revised Statutes.
PART I
SECTION 2. Section 46-15.1, Hawaii Revised Statutes, is amended to read as follows:
"§46-15.1 Housing; county powers. (a) Notwithstanding any law to the contrary, any county
shall have and may exercise the same powers, subject to applicable limitations,
as those granted the Hawaii housing finance and development corporation
pursuant to chapter 201H insofar as those powers may be reasonably construed to
be exercisable by a county for the purpose of developing, constructing, and
providing low- and moderate-income housing; provided that no county shall be
empowered to cause the State to issue general obligation bonds to finance a
project pursuant to this section; provided further that county projects shall
be granted an exemption from general excise or receipts taxes in the same
manner as projects of the Hawaii housing finance and development corporation
pursuant to section 201H-36; and provided further that section 201H-16 shall
not apply to this section unless federal guidelines specifically provide local
governments with that authorization and the authorization does not conflict
with any state laws. The powers shall
include the power, subject to applicable limitations, to:
(1) Develop
and construct dwelling units, alone or in partnership with developers;
(2) Acquire
necessary land by lease, purchase, exchange, or eminent domain;
(3) Provide
assistance and aid to a public agency or other person in developing and
constructing new housing and rehabilitating existing housing for elders of low-
and moderate-income, other persons of low- and moderate‑income, and
persons displaced by any governmental action, by making long-term mortgage or
interim construction loans available;
(4) Contract
with any eligible bidders to provide for construction of urgently needed
housing for persons of low- and moderate-income;
(5) Guarantee
the top twenty-five per cent of the principal balance of real property mortgage
loans, plus interest thereon, made to qualified borrowers by qualified lenders;
(6) Enter
into mortgage guarantee agreements with appropriate officials of any agency or
instrumentality of the United States to induce those officials to commit to
insure or to insure mortgages under the National Housing Act, as amended;
(7) Make
a direct loan to any qualified buyer for the downpayment required by a private
lender to be made by the borrower as a condition of obtaining a loan from the
private lender in the purchase of residential property;
(8) Provide
funds for a share, not to exceed fifty per cent, of the principal amount of a
loan made to a qualified borrower by a private lender who is unable otherwise
to lend the borrower sufficient funds at reasonable rates in the purchase of residential
property; and
(9) Sell
or lease completed dwelling units.
For purposes of this section, a limitation
is applicable to the extent that it may reasonably be construed to apply to a
county.
(b) Each county shall recognize housing units developed by the department of Hawaiian home lands and issue affordable housing credits to the department of Hawaiian home lands. The credits shall be transferable and shall be issued on a one‑credit for one-unit basis, unless the housing unit is eligible for additional credits as provided by adopted county ordinances, rules, or any memoranda of agreement between a county and the department of Hawaiian home lands. In the event that credits are transferred by the department of Hawaiian home lands, twenty-five per cent of any monetary proceeds from the transfer shall be used by the department of Hawaiian home lands to develop units for rental properties. Credits shall be issued for each single-family residence, multi-family unit, other residential unit, whether for purposes of sale or rental, or if allowed under the county's affordable housing programs, vacant lot, developed by the department of Hawaiian home lands. The credits may be applied county-wide within the same county in which the credits were earned to satisfy affordable housing obligations imposed by the county on market-priced residential and non-residential developments. County-wide or project‑specific requirements for housing class, use, or type; or construction time for affordable housing units shall not impair, restrict, or condition the county's obligation to apply the credits in full satisfaction of all county requirements, whether by rule, ordinance, or particular zoning conditions of a project. Notwithstanding any provisions herein to the contrary, the department may enter into a memorandum of agreement with the county of Kauai to establish, modify, or clarify the conditions for the issuance, transfer, and redemption of the affordable housing credits in accordance with county affordable housing ordinances or rules. Notwithstanding any provisions herein to the contrary, the department may enter into a memorandum of agreement with the city and county of Honolulu to establish, modify, or clarify the conditions for the issuance, transfer, and redemption of the affordable housing credits in accordance with county affordable housing ordinances or rules. At least half of the affordable housing credits issued by the city and county of Honolulu shall be subject to a memorandum of agreement pursuant to this subsection.
For purposes of this [section,]
subsection, "affordable housing obligation" means the
requirement imposed by a county, regardless of the date of its imposition, to
develop vacant lots, single-family residences, multi-family residences, or any
other type of residence for sale or rent to individuals within a specified
income range.
(c)
Each county shall recognize housing units developed pursuant to chapter
201H and issue affordable housing credits to the eligible developer, as defined
in section 201H-32, for residences required to be sold or rented to individuals
within a specified income range, if a developer chooses to receive affordable
housing credits. The credits shall be
transferable and shall be issued on a one-credit for one-unit basis, except as
modified by county ordinance or rule or any memoranda of agreement between a county
and the Hawaii housing finance and development corporation. Each county shall be responsible for
monitoring the use and transfer of credits.
In the event that the Hawaii housing finance and development corporation
owns credits and the credits are transferred, twenty—five per cent of any
monetary proceeds from the transfer shall be used by the Hawaii housing finance
and development corporation to develop units for rental properties. Credits shall be issued for each
income—specified single—family residence, multi—family unit, other residential
unit, whether for purposes of sale or rental as developed pursuant to chapter
201H. If low-income housing tax credits
are utilized, then credits shall not be issued.
The credits may be applied county—wide within the same county in which
the credits were earned to satisfy affordable housing obligations imposed by
the county on market—priced residential and non—residential developments. County—wide or project‑specific
requirements for housing class, use, or type or construction time for
affordable housing units shall not impair, restrict, or condition the county's
obligation to apply the credits in full satisfaction of all county
requirements, whether by ordinance, rule, or particular zoning conditions of a
project. Notwithstanding any provisions
in this section to the contrary, the Hawaii housing finance and development
corporation may enter into a memorandum of agreement with any county to
establish, modify, or clarify the conditions for the issuance, transfer, and
redemption of the affordable housing credits in accordance with county
affordable housing ordinances or rules.
For purposes of this subsection,
"affordable housing obligation" means the requirement imposed by a
county or the Hawaii community development authority, regardless of the date of
its imposition, to develop vacant lots, single—family residences, multi—family
residences, or any other type of residence for sale or rent to individuals
within a specified income range.
[(c)] (d) Notwithstanding any law to the contrary, any
county may:
(1) Authorize and issue bonds under chapter 47 and chapter 49 to provide moneys to carry out the purposes of this section or section 46-15.2, including the satisfaction of any guarantees made by the county pursuant to this section;
(2) Appropriate moneys of the county to carry out the purposes of this section;
(3) Obtain insurance and guarantees from the State or the United States, or grants from either;
(4) Designate, after holding a public hearing on the matter and with the approval of the respective council, any lands owned by it for the purposes of this section;
(5) Provide interim construction loans to partnerships of which it is a partner and to developers whose projects qualify for federally assisted project mortgage insurance, or other similar programs of federal assistance for persons of low and moderate income; and
(6) Adopt rules pursuant to chapter 91 as are necessary to carry out the purposes of this section.
[(d)] (e) Notwithstanding any law to the contrary, a
county may waive its right to repurchase a privately-developed affordable
housing unit built pursuant to a unilateral agreement or similar instrument,
and may transfer that right of repurchase to a qualified nonprofit housing
trust for the purpose of maintaining the unit as affordable for as long as
required by the county program.
For the purposes of this subsection,
"qualified nonprofit housing trust" means a corporation, association,
or other duly chartered organization that is registered and in good standing
with the State; that is recognized by the Internal Revenue Service as a
charitable or otherwise tax-exempt organization under section 501(c)(3) of the
Internal Revenue Code of 1986, as amended; and that has the capacity,
resources, and mission to carry out the purposes of this section as determined
by the county in which the housing unit is located.
[(e)]
(f) A qualified nonprofit housing
trust shall report the status and use of its housing units to its respective
county by November 30 of each calendar year.
[(f)]
(g) The provisions of this
section shall be construed liberally so as to effectuate the purpose of this
section in facilitating the development, construction, and provision of low-
and moderate-income housing by the various counties.
[(g)]
(h) For purposes of this section,
"low and moderate income housing" means any housing project that
meets the definition of "low- and moderate-income housing project" in
section 39A-281."
PART II
SECTION 3. The housing finance and development corporation shall conduct a study assessing the efficacy of housing credit programs. The study shall include:
(1) An inventory of current state and county programs that use housing credits, including the number of credits issued in the last ten years, and the number of projects that used credits under each program;
(2) An inventory of similar programs in jurisdictions outside Hawaii;
(3) An assessment of the Hawaii housing market's interest in expanded housing credit programs; and
(4) Recommendations on:
(A) Necessary legislation to modify the provisions of this program; and
(B) Whether to extend the sunset date for this program.
SECTION 4. In conducting the study required by this Act, the Hawaii housing finance and development corporation shall coordinate its efforts with the land use commission, Hawaii community development authority, and the planning and housing departments of each county. The corporation shall also consult with affordable housing developers and financial institutions that are involved with affordable housing financing.
SECTION 5. The Hawaii housing finance and development corporation shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2025.
SECTION 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2023-2024 for the Hawaii housing finance and development corporation to contract for services to conduct the study required by this part.
The sum appropriated shall be expended by the Hawaii housing finance and development corporation for the purposes of this part.
PART III
SECTION 7. Act 98, Session Laws of Hawaii 2012, as amended by Act 102, Session Laws of Hawaii 2015, section 4, as amended by Act 55, Session Laws of Hawaii 2016, section 50, as amended by Act 80, Session Laws of Hawaii 2019, section 2, is amended by amending section 3 to read as follows:
"SECTION
3. This Act shall take effect upon its
approval, and shall be repealed on July 1, 2024; provided that section 46‑15.1,
Hawaii Revised Statutes, shall be reenacted pursuant to section 3 of Act 141,
Session Laws of Hawaii 2009, and in accordance with section 23 of Act
96, Session Laws of Hawaii 2014[.] and section 9 of Act 159, Session
Laws of Hawaii 2017."
PART IV
SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 10. This Act shall take effect on July 1, 2050; provided that:
(1) The amendments made to section 46-15.1, Hawaii Revised Statutes, by section 2 of this Act shall not be repealed when that section is reenacted on July 1, 2024, pursuant to:
(A) Section 3 of Act 141, Session Laws of Hawaii 2009, as amended by Act 102, Session Laws of Hawaii 2015, section 3, as amended by Act 80, Session Laws of Hawaii 2019, section 1; and
(B) Section 3 of Act 98, Session Laws of Hawaii 2012, as amended by Act 102, Session Laws of Hawaii 2015, section 4, as amended by Act 55, Session Laws of Hawaii 2016, section 50, as amended by Act 80, Session Laws of Hawaii 2019, section 2; and
(2) On July 1, 2028, section 2 of this Act shall be repealed and section 46-15.1, Hawaii Revised Statutes, shall be reenacted in the form in which it read on June 29, 2009; provided further that the amendments made to section 46-15.1, Hawaii Revised Statutes, by section 11 of Act 96, Session Laws of Hawaii 2014, and section 3 of Act 159, Session Laws of Hawaii 2017, shall not be repealed when that section is reenacted pursuant to this paragraph.
Report Title:
HHFDC; Affordable
Housing Development; Study; Report; Appropriation
Description:
Provides a new source of interim financing for affordable housing projects using housing program in Chapter 201H, Hawaii Revised Statutes. Requires and appropriates moneys for the Hawaii Housing Finance and Development Corporation to conduct a study assessing the efficacy of housing credit programs. Requires a report to the Legislature. Sunsets 7/1/2028. Effective 7/1/2050. (SD2)
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not legislation or evidence of legislative intent.