Authorizes HCDCH to amend housing development contracts executed by HFDC. Allows affordable housing requirements for certain undeveloped parcels in Puukolii Village to be established by agreement by developer, HCDCH, and Maui County. (CD1)

A BILL FOR AN ACT

SECTION 1. In an attempt to meet the housing needs of residents, the legislature enacted Act 15, Session Laws of Hawaii 1988 (Act 15). In part, Act 15 permitted the housing finance and development corporation to enter into agreements with eligible developers to develop badly needed homes by exempting approved projects from all statutes, ordinances, charter provisions, and rules relating to zoning. However, an approved Act 15 project was also required to have not less than sixty per cent of the units in the project be affordable units.

According to the housing and community development corporation of Hawaii, before Act 15 "sunsetted" in 1993, more than sixteen thousand homes were granted approval, but fewer than six hundred were actually constructed. It appears that the vast majority of these homes were not developed due to the sixty per cent affordable housing requirement that made many projects economically unfeasible. However, the approvals for these Act 15 projects remain in effect.

To coordinate and streamline the various state housing programs, the legislature enacted Act 350, Session Laws of Hawaii 1997 (Act 350). Among other things, Act 350 contained a provision similar to one in Act 15 that exempted approved projects with eligible developers from county zoning requirements. However, this similar provision did not contain the sixty per cent affordable housing requirement.

Act 350 transferred all jurisdiction, functions, rights, and powers exercised by the housing finance and development corporation and the Hawaii housing authority to the housing and community development corporation of Hawaii. Act 350 further provided that all contracts, agreements, permits, and other documents executed by the housing finance and development corporation remained applicable to the housing and community development corporation of Hawaii and remained in full force and effect.

Accordingly, while many approved Act 15 projects remain in effect, they are still unable to proceed unless the sixty per cent affordable housing requirement is amended. However, it is uncertain whether the housing and community development corporation of Hawaii has the authority to amend the Act 15 contracts and agreements entered into by the housing finance and development corporation to conform to current statutory requirements.

The purpose of this Act is:

SECTION 2. Chapter 201G, Hawaii Revised Statutes, is amended by adding a new section to subpart F of part II to be appropriately designated and to read as follows:

"§201G-   Authority to modify and amend development agreements with eligible developers. The corporation shall have the power and authority to amend, delete, restate, and otherwise modify the terms, conditions, plans, specifications, and all other matters relating, directly or indirectly, to any housing project that was previously approved by the housing finance and development corporation, including, without limitation, the terms, covenants, and conditions of any development agreement for a housing project between the housing finance and development corporation and an eligible developer."

SECTION 3. Notwithstanding Act 15, Session Laws of Hawaii 1988, the affordable housing requirements for the undeveloped parcels in Puukolii village shall be established by agreement among:

The affordable housing requirement shall include a requirement for housing that is affordable to households earning up to one hundred twenty per cent of the county median income.

The undeveloped parcels in Puukolii village are defined as tax map key numbers 4-4-02: por. 02 and 4-4-06: por. 01.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect on July 1, 2005.