Appropriates funds to acquire the property currently known as Kukui Gardens from Kukui Gardens Corp. Authorizes eminent domain proceedings should the acquisition be unsuccessful.

A BILL FOR AN ACT

SECTION 1. In its final report dated January 2006, the joint legislative housing and homeless task force (task force) expressed concern that the inventory of affordable housing rental units may be reduced. Affordable rental housing projects built in part with government subsidies have been offered for sale at market prices as a result of the expiration of income and conveyance restrictions encumbered on the property. The task force is committed to ensuring that such units remain affordable to persons at certain income levels.

In recent months, media reports have announced several affordable housing projects that may be offered for sale, such as the Kukui Gardens affordable rental housing project. Kukui Gardens was built in part with federal funds and its affordability restrictions will expire in five years.

The purpose of this Act is to preserve Kukui Gardens as an affordable housing project.

SECTION 2. The Hawaii housing finance and development administration shall immediately initiate negotiations with Kukui Gardens Corp. to acquire the Kukui Gardens property, and may partner with private developers for acquisition of the property; provided that at least fifty per cent of the housing units on the property shall be retained in perpetuity as affordable housing for persons and families at or below one hundred forty per cent of the median family income as determined by the United States Department of Housing and Urban Development.

The Hawaii housing finance and development administration shall submit a report to the legislature no later than twenty days prior to the convening of the 2007 Regular Session regarding its efforts to acquire Kukui Gardens and its recommendations for financing the purchase of the property.

SECTION 3. 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 2006-2007 for land acquisition of Kukui Gardens, tax map key 17026007, owned by Kukui Gardens Corp.; provided that if an agreement to acquire the property is not reached by June 30, 2007, the Hawaii housing finance and development administration shall exercise its power of eminent domain to acquire the property.

The sum appropriated shall be expended by the Hawaii housing finance and development administration for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 2006.