Hawaii-2024-SB2042-Amended

SECTION 1. The legislature finds that the State is facing a housing crisis. A 2019 study commissioned by the department of business, economic development, and tourism found that, using high scenario projections, the State will require an additional 46,573 homes by the year 2030, with the city and county of Honolulu requiring 21,392 new units; Hawaii county requiring 13,527 new units; Maui county requiring 8,515 new units; and Kauai county requiring 3,138 new units.

The legislature further finds that some of the largest obstacles for developers to construct more housing in the State are:

(1) A lack of areas with proper zoning for residential dwellings to be constructed;

(2) A lack of infrastructure to support newly developed residential dwellings; and

(3) Delays in the issuance of building permits for single-family and multi-family projects.

The building permit processing times for single-family and multi-family projects vary tremendously across the United States. However, the counties in Hawaii seem to have some of the longest processing times for residential building permits. A study prepared by the university of Hawaii economic research office in April 2022 found that, on average, Hawaii homebuilders wait three times longer for permits than those in other states, which drives up costs significantly and creates uncertainty, serving as a disincentive to build new projects. Furthermore, the study found that, compared to the most regulated markets in the country, Hawaii's permit delays are almost two times longer, meaning it can take between a year and a year and a half for a permit to be approved.

The lengthy processing times to obtain a building permit begs the question: what information is necessary for counties when processing building permit applications? The basic responsibilities of the county are to ensure compliance with various building codes and ensure adequate infrastructure capacity to support the proposed project or development. Although the counties are responsible to check for compliance with various building codes, if the construction plans do not satisfy the code and are not corrected prior to construction, the designer (a licensed professional who stamped the plans) and the contractor are ultimately responsible. The county is also not typically involved in litigation as the building permit process is ministerial, mainly to check for code compliance.

In other municipalities around the country, building plans are not scrutinized to the extent that they are in Hawaii counties. In Hawaii, the plan review is to ensure that the design meets all applicable codes. However, in other municipalities, the plans are used as a guide and code compliance is done during the inspection of the project during construction. Inspectors who find construction does not satisfy the code either have the correction done in the field or stop construction until proper corrective actions have been taken to ensure the new construction meets the code. Ultimately, the design professional and contractor are responsible to ensure the new construction meets all applicable codes.

Accordingly, the purpose of this Act is to establish a permit process that shifts the responsibility for code compliance from the counties to the design professional for all single-family and multi-family residential projects.

SECTION 2. Chapter 46, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§46- Building permit applications; certification; review time limit. (a) For single-family and multi-family projects in each county, a building permit shall be issued within sixty days of an application being filed that is stamped by a duly licensed structural, civil, electrical, or mechanical engineer and architect certifying that all plans and specifications are in compliance with the applicable building codes for the respective county. The certification shall include a statement that adequate infrastructure capacity is available to service the project site. During the sixty-day period after the building permit application has been submitted, the respective county shall ensure that the project is in compliance with applicable ordinances regarding land use, set-back, height, and site development requirements for the project site; provided that non-compliance with any of the county's discretionary approvals may delay the county's issuance of the building permit. If a permit submitted under this section is not approved by the county within sixty days of a complete application being filed, it shall be deemed approved; provided that county approval has not been delayed due to non-compliance of the permit with applicable state law or county ordinances. Nothing in this section shall be construed to allow any violation of federal, state, or county laws or rules.

(b) A county shall not consider an application complete until:

(1) Either:

(A) The county has made a reasonable and good faith determination that the project does not have the potential to affect historic properties, archeological resources, or burial sites; or

(B) The project has been submitted to the state historic preservation division of the department of land and natural resources and the chapter 6E process has been completed; and

(2) The developer submits documentation evidencing that the proposed development does not encroach in Special Flood Hazard Areas identified as "A" or "V" zones on the Federal Emergency Management Agency's Flood Insurance Rate Maps, or has been reviewed for floodplain management compliance and has been issued a development permit for construction by the applicable community official."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

THE SENATE	S.B. NO.	2042
THIRTY-SECOND LEGISLATURE, 2024		S.D. 1
STATE OF HAWAII