|
THE SENATE |
S.B. NO. |
1286 |
|
THIRTY-SECOND LEGISLATURE, 2023 |
S.D. 1 |
|
|
STATE OF HAWAII |
|
|
|
|
|
|
|
|
||
|
|
||
A BILL FOR AN ACT
RELATING TO THE HAWAII COMMUNITY DEVELOPMENT AUTHORITY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
The
legislature has for several years acknowledged that there exists a need for
housing statewide. Given the acute lack
of housing, a multi-pronged approach is necessary to meet current and future
housing demands in the State.
Development of housing units of various ownership types (rental, for‑sale
leasehold, for‑sale fee simple) that are affordable at all levels of
income must be explored to meet these current and future demands.
Leasehold
housing units tend to be more affordable than fee simple housing units if the
land on which the housing is developed is owned by the State and leased to a
developer for housing development.
Developing multi-family housing units on a lot lowers the cost of land
for the development, which in turn will lower the sales price of the housing
units. Because the cost of leasehold
land is lower than fee simple land and paid over a longer period, it further
reduces the land cost and makes the housing units even more affordable. Because the land will be in leasehold, the State
will continue to be the fee owner of the land.
Therefore, encouraging development of for‑sale leasehold housing
units is a viable strategy in meeting housing demand. However, the term of the lease needs to be
long enough to make for‑sale leasehold housing units attractive to buyers
and lenders. Typically, a
ninety-nine-year lease is considered to be adequate to attract both lenders and
buyers.
Given
its experience and expertise in developing affordable housing in Kakaako, the
Hawaii community development authority is ideally suited for developing for‑sale
leasehold housing units in community development districts. Therefore, the purpose of this Act is to
provide additional means to increase the supply of housing in Hawaii by allowing
the Hawaii community development authority to lease real property for a term of
ninety-nine years.
SECTION
2. Section 206E-14, Hawaii Revised
Statutes, is amended to read as follows:
"§206E-14 Sale or lease of redevelopment projects. (a) The
authority [may], without recourse to public auction, may sell, or
lease for a term not exceeding [sixty-five] ninety-nine years,
all or any portion of the real or personal property constituting a
redevelopment project to any person, upon [such] terms and conditions as
may be approved by the authority, if the authority finds that the sale or lease
is in conformity with the community development plan[.]; provided
that the lease of lands that were classed as crown or government lands prior to
August 15, 1895, shall have a term not to exceed sixty-five years.
For
the stadium development district, leases shall not exceed a term of ninety-nine
years.
(b) In the case of residential projects or
redevelopment projects, the terms of the sale shall provide for the repurchase
of the property by the authority at its option, in the event that the
purchaser, if other than a state agency, desires to sell the property within
ten years[,]; provided that this requirement may be waived by the
authority if the authority determines that a waiver will not be contrary to the
community development plan. The
authority shall establish at the time of original sale a formula setting forth
a basis for a repurchase price based on market considerations, including
but not [being] limited to interest rates, land values, construction
costs, and federal tax laws.
If
the purchaser in a residential project is a state agency, the authority may
include as a term of the sale a provision for the repurchase of the property in
conformance with this section.
(c) The Hawaii community development authority may adopt rules under
chapter 91 relating to sales by unit purchasers in a residential leasehold
project."
SECTION
3. Statutory material to
be repealed is bracketed and stricken.
New statutory material is underscored.
SECTION 4. This Act shall take effect on July 1, 2050.
Report Title:
Affordable Housing; HCDA; Lease of State Land
Description:
Increases options to build affordable housing in Hawaii Community Development Authority districts by increasing the permissible lease term to 99 years. Prohibits the Hawaii Community Development Authority from encumbering lands that were classed as crown or government lands prior to 8/15/1895, in leases longer than 65 years. Effective 7/1/2050. (SD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.