Report Title:
Honolulu Development Authority; Affordable Housing
Description:
Establishes the Honolulu development authority to provide affordable housing in Honolulu.
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
2792 |
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TWENTY-THIRD LEGISLATURE, 2006 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to AN AFFORDABLE HOUSING DEVELOPMENT AUTHORITY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:
"CHAPTER
HONOLULU DEVELOPMENT AUTHORITY
§ -1 Findings and purpose. The legislature finds that the lack of affordable housing continues to be a critical problem in Hawaii, especially in the heavily populated Honolulu area. The problem is exacerbated by record housing prices that have caused a shrinking rental market and a growing homeless population. Thus far, the State has failed to respond to this crisis.
The legislature also finds that a new and comprehensive state authority dedicated to the development of affordable housing in Honolulu must be created to meet the city's growing housing needs in the twenty-first century.
The purpose of this Act is to establish a Honolulu development authority to better respond to the affordable housing needs of the people of Honolulu. Because the great majority of the State's population resides in the city and county of Honolulu, the legislature finds that this issue is a matter of statewide concern.
§ -2 Definitions. As used in this chapter, the following words and terms have the following meanings unless the context indicates otherwise:
"Affordable housing" means housing provided to a family whose income is one hundred per cent or less of the median family income established by the federal Department of Housing and Urban Development and qualifies under other criteria established by the authority under rules adopted pursuant to chapter 91.
"Authority" means the Honolulu development authority established in section -4.
"County" or "local governing body" means the city and county of Honolulu.
"Mortgage lender" means any bank, trust company, savings bank, national banking association, savings and loan association, building and loan association, mortgage banker, credit union, insurance company, or any other financial institution, or a holding company that:
(1) Is authorized to do business in the State;
(2) Customarily provides service or otherwise aids in the financing of mortgages on single family or multi-family residential property; and
(3) Is a financial institution whose accounts are federally insured, or is an institution that is an approved mortgagee for the Federal Housing Administration, or is an approved lender for the Department of Veterans Affairs or the United States Department of Agriculture, or is an approved mortgage loan servicer for the Federal National Mortgage Association or the Federal Home Mortgage Corporation.
"Project" means an affordable housing project, including real and personal properties, or any interest therein, acquired, owned, constructed, reconstructed, rehabilitated, or improved by the Honolulu development authority.
"Real property" means:
(1) Lands, structures, and interests in land, including lands under water and riparian rights, space rights, and air rights and any and all other things and rights usually included within the term; and
(2) Any and all interests in such property less than full title, such as easements, incorporeal hereditaments and every estate, interest, or right, legal or equitable, including terms for years and liens thereon by way of judgments, mortgages, or otherwise.
§ -3 Honolulu development authority boundaries; jurisdiction. The Honolulu development authority shall have jurisdiction in the area bounded by:
(1) Mapunapuna street to the West;
(2) Moanalua Valley to the North;
(3) Koko Head avenue to the East; and
(4) The south shore of Oahu to the South;
provided that the jurisdiction of the Honolulu development authority shall not extend into, or interfere with, the Hawaii community development authority's Kakaako community development district, as specified by its boundaries under section 206E-32.
§ -4 Honolulu development authority; established. (a) There is established the Honolulu development authority, which shall be a body corporate and a public instrumentality of the State, for the purpose of implementing this chapter. The authority shall be placed within the department of business, economic development, and tourism for administrative purposes.
(b) The authority shall consist of seventeen voting members. The director of finance, the director of business, economic development, and tourism, the comptroller, and the director of transportation, or their respective designated representatives shall serve as ex officio, voting members. Four members shall be appointed by the governor for staggered terms pursuant to section 26-34. Five members shall be county members selected from a list of ten prospective appointees recommended by the Honolulu city council and confirmed by the mayor. Two members shall be appointed by the president of the senate and two members shall be appointed by the speaker of the house of representatives. Notwithstanding section 92-15, a majority of all members shall constitute a quorum, and the concurrence of a majority of all members shall be necessary to make any action of the authority valid. All members shall continue in office until their respective successors have been appointed and qualified. Except as provided in this chapter, no member appointed under this subsection shall be an officer or employee of the State or any county.
(c) The authority shall appoint the executive director who shall be the chief executive officer. The authority shall set the salary of the executive director, who shall serve at the pleasure of the authority and shall be exempt from chapter 76.
(d) The authority shall annually elect the chairperson and vice chairperson from among its members.
(e) The members of the authority appointed under subsection (b) shall serve without compensation, but each shall be reimbursed for expenses, including travel expenses, incurred in the performance of their duties.
§ -5 Authority powers; generally. Except as otherwise provided by this chapter, the authority may:
(1) Sue and be sued;
(2) Have a seal and alter the same at its pleasure;
(3) Make and execute contracts and all other instruments necessary or convenient for the exercise of its powers and functions under this chapter;
(4) Make and alter bylaws for its organization and internal management;
(5) Adopt rules, pursuant to chapter 91, with respect to its projects, operations, properties, and facilities;
(6) Through its executive director appoint officers, agents, and employees, prescribe their duties and qualifications, and fix their salaries, without regard to chapter 76;
(7) Prepare a master affordable housing development plan;
(8) Acquire, reacquire, or contract to acquire or reacquire by grant or purchase real or personal property or any interest therein; to own, hold, clear, improve, and rehabilitate, and to sell, assign, exchange, transfer, convey, lease, or otherwise dispose of or encumber;
(9) Acquire or reacquire by condemnation real, personal, or mixed property for the purposes of this chapter, including but not limited to streets, sidewalks, parks, schools, and other public improvements;
(10) By itself, or in partnership with other persons: acquire, reacquire, construct, reconstruct, rehabilitate, improve, alter, or repair or provide for the construction, reconstruction, improvement, alteration, or repair of any project; own, hold, sell, assign, transfer, convey, exchange, lease, or otherwise dispose of or encumber any project, and in the case of the sale of any project, accept a purchase money mortgage in connection therewith; and repurchase or otherwise acquire any project that the authority has theretofore sold or otherwise conveyed, transferred, or disposed of;
(11) Arrange or contract for the planning, replanning, opening, grading, or closing of streets, roads, roadways, alleys, or other places, or for the furnishing of facilities or for the acquisition of property or property rights or for the furnishing of property or services in connection with a project;
(12) Grant options to purchase any project or to renew any lease entered into by it in connection with any of its projects, on such terms and conditions as it deems advisable;
(13) Prepare or cause to be prepared plans, specifications, designs, and estimates of costs for the construction, reconstruction, rehabilitation, improvement, alteration, or repair of any project and, from time to time, modify such plans, specifications, designs, or estimates;
(14) Provide advisory, consultative, training, and educational services, technical assistance, and advice to any person, partnership, or corporation, either public or private, in order to carry out the purposes of this chapter, and engage the services of consultants on a contractual basis for rendering professional and technical assistance and advice;
(15) Procure insurance against any loss in connection with its property and other assets and operations in such amounts and from such insurers as it deems desirable;
(16) Contract for and accept gifts or grants in any form from any public agency or from any other source; and
(17) Do any and all things necessary to carry out its purposes and exercise the powers given and granted in this chapter.
§ -6 Authority duties; generally. (a) The authority shall assess the affordable housing needs within its jurisdiction and develop a master plan and timetable to address those needs.
(b) The authority may enter into cooperative agreements as necessary to for the purposes of this chapter.
(c) Whenever possible, planning activities of the authority shall be coordinated with federal, state, and county plans. Consideration shall be given to state goals and policies, adopted state plan or land use guidance policies, county general plans, development plans, and ordinances.
(d) The governor shall submit to the legislature requests for appropriations, authorization to issue bonds, or both, to implement this chapter in an orderly, affordable, and feasible manner. The governor shall submit the requests to the legislature as part of the executive budget or supplemental budget, as appropriate. In addition to the information, data, and materials required under chapter 37, the requests shall be accompanied by:
(1) Plans, maps, narrative descriptions, and other appropriate materials on the:
(A) Locations and design of projects proposed to be funded; and
(B) Phases of plans proposed to be implemented with the requested funds; and
(2) Other information deemed by the governor of significance to the legislature regarding the projects proposed to be funded, including a discussion of the public benefits intended by, and adverse effects that may result from, implementation of the projects.
(e) The authority may amend its plans as may be necessary in accordance with chapter 91.
§ -7 Honolulu development revolving fund. There is created the Honolulu community development revolving fund into which all receipts and revenues of the authority shall be deposited. Proceeds from the fund shall be used for the purposes of this chapter.
§ -8 Honolulu development authority rules. The authority shall adopt rules pursuant to chapter 91 regarding health, safety, building, planning, zoning, and land use that, upon final adoption, shall supersede all other inconsistent ordinances and rules relating to the use, zoning, planning, and development of land and construction thereon. Rules adopted under this section shall follow existing law, rules, ordinances, and federal regulations as closely as is consistent with standards meeting minimum requirements of good design, pleasant amenities, health, safety, and coordinated development. The authority may provide by rule, adopted pursuant to chapter 91, that lands shall not be developed beyond existing uses or that improvements thereon shall not be demolished or substantially reconstructed, or provide other restrictions on the use of the lands.
§ -9 Use of public lands; acquisition of state lands. (a) Any provision of chapter 171 to the contrary notwithstanding, the governor may set aside public lands to the authority for its use pursuant to this chapter.
(b) If state lands under the control and management of other public agencies are required by the authority for its purposes, the agency having the control and management of those required lands, upon request by the authority and with the approval of the governor, shall convey or lease the lands to the authority upon terms and conditions as may be agreed to by the parties.
(c) Notwithstanding the foregoing, no public lands shall be set aside, conveyed, or leased to the authority as provided in this section, if the setting aside, conveyance, or lease would impair any covenant between the State or the county or any department or board thereof and the holders of bonds issued by the State or the county, department, or board.
§ -10 Acquisition of real property from the county. Notwithstanding the provision of any law or charter, the county by resolution and without public auction, sealed bids, or public notice, may sell, lease for a term not exceeding sixty-five years, grant, or convey to the authority any real property owned by it which the authority certifies to be necessary for its purposes. The sale, lease, grant, or conveyance shall be made with or without consideration and upon such terms and conditions as may be agreed upon by the county and the authority. Certification shall be evidenced by a formal request from the authority. Before the sale, lease, grant, or conveyance may be made to the authority, a public hearing shall be held by the county. Notice of the hearing shall be published at least ten days before the date set for the hearing in a publication and in a manner as may be designated by the county.
§ -11 Condemnation of real property. The authority, upon finding that it is necessary to acquire any real property for its immediate or future use for the purposes of this chapter, may acquire the property by condemnation pursuant to chapter 101, including property already devoted to a public use. The property shall not thereafter be taken for any other public use without the consent of the authority. No award of compensation shall be increased by reason of any increase in the value of real property or the actual or proposed acquisition, use, or disposition of any other real property by the authority.
§ -12 Relocation. (a) Any law to the contrary notwithstanding, the authority shall adopt rules pursuant to chapter 91 to ensure the appropriate relocation of displaced persons, families, and businesses. The rules may include, but are not limited to: the establishment and operation of a central relocation office; relocation payments for actual moving costs; fixed payments for losses suffered; payments for replacement housing or business locations; relocation payments and loans to displaced businesses for certain costs related to the re-establishment of their business operations; and other similar relocation matters.
(b) The authority shall provide relocation assistance to displaced persons, families, and businesses; provided that the assistance shall not include any form of direct monetary payments, except that the authority may make relocation loans to displaced businesses in accordance with rules adopted by the authority, in accordance with chapter 91, for the purposes of this section. Temporary relocation facilities may be made available to displacees; provided that those displaced shall be afforded priority to the facilities.
§ -13 Construction contracts. The authority shall award construction contracts in conformity with the applicable provisions of chapter 103D.
§ -14 Public projects. Any applicable project or activity of the county or agency of the State shall be constructed, renovated, or improved in consultation with the authority.
§ -15 Sale or lease of development projects. (a) The authority, without recourse to public auction, may sell, or lease for a term not exceeding sixty-five years, all or any portion of the real or personal property constituting a development 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 its master plan.
(b) 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. 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 limited to interest rates, land values, construction costs, and federal tax laws.
If the purchaser in a 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.
§ -16 Cooperative agreements. The authority may enter into an agreement with qualified persons, as determined by the authority, to construct, maintain, operate, or otherwise dispose of a project. The sale, lease, or rental of dwelling units in the project shall be as provided by rules adopted by the authority pursuant to chapter 91. The authority may enter into cooperative agreements for the financing, development, construction, sale, lease, or rental of dwelling units and projects.
§ -17 Loans to lenders program. (a) The authority may make loans to mortgage lenders under terms and conditions requiring that the loan proceeds be used within a time period prescribed by the authority to make loans, as determined by the authority, to individual borrowers in an aggregate principal amount substantially equal to the amount of the loan to mortgage lenders.
(b) The loan made to a mortgage lender shall be a general obligation of the respective mortgage lender.
(c) The loan as determined by the authority shall:
(1) Bear a date or dates;
(2) Mature at a time or times;
(3) Be evidenced by a note, bond, or other certificate of indebtedness;
(4) Contain other provisions consistent with this chapter.
(d) Subject to any agreement with the holders of its revenue bonds, the authority may consent to any modification to the rate of interest, time, and payment of any installment of principal or interest, security, or any other term of any loan to a mortgage lender or any bond, note, contract, or agreement of any kind to which the authority is a party.
§ -18 Loan to lenders program; collateral security. (a) Loans made to mortgage lenders shall be additionally secured by a pledge of a lien upon collateral security in an amount as the authority deems necessary to ensure the payment of principal of and interest on the loans as they become due.
(b) The authority shall determine the nature and type of collateral security required.
(c) A statement designating the collateral security pledged, the mortgage lender pledging the collateral, and the authority's interest in the pledged collateral may be filed with the bureau of conveyances. Where a statement has been filed, no possession, further filing, or other action under any state law shall be required to perfect any security interest that may be deemed to have been created in favor of the authority. The mortgage lender shall be deemed the trustee of an express trust for the benefit of the authority in all matters relating to the pledged collateral.
(d) Subject to any agreement with the holders of its revenue bonds, the authority may collect, enforce the collection of, and foreclose on any collateral securing its loans to mortgage lenders. The authority may acquire, take possession, sell at public or private sale with or without bidding, or otherwise deal with the collateral to protect its interests.
§ -19 Purchase of existing loans program. (a) The authority may contract with a mortgage lender to purchase, in whole or in part, existing loans. The contract may contain provisions as determined by the authority to be necessary or appropriate to provide security for its revenue bonds, including but not limited to provisions requiring the:
(1) Repurchase of the loans, in whole or in part, by mortgage lenders at the option of the authority;
(2) Payments of premiums, fees, charges, or other amounts by mortgage lenders to provide a reserve or escrow fund for the purposes of protecting against loan defaults; and
(3) Guarantee by, or for recourse against, mortgage lenders, with respect to defaults on these loans of the authority.
(b) The authority shall require as a condition of each purchase of existing loans from a mortgage lender that the mortgage lender proceed to make and disburse loans in an aggregate principal amount substantially equal to the amount of the proceeds from the purchase by the authority of loans therefrom.
§ -20 Advance commitments program. (a) The authority may contract with a mortgage lender for the advance commitment to purchase loans or project loans.
(b) The contract may contain provisions as determined by the authority to be necessary or appropriate to provide security for its revenue bonds.
§ -21 Loans; service and custody. The authority may contract for the service and custody of its loans. The contract may provide for the payment of fees or charges for the services rendered; provided that the fees or charges shall not exceed the usual, customary, and reasonable charges for the services rendered.
§ -22 Loans; sale, pledge, or assignment. (a) Subject to any agreement with the holders of its revenue bonds, the authority may sell its loans at public or private sale at a price and upon terms and conditions as it determines.
(b) Subject to any agreement with the holders of its revenue bonds, the authority may pledge or assign its loans, other agreements, notes, or property to secure the loans or agreements.
§ -23 Loans; insurance and guarantees. The authority may procure insurance or guarantees against any default of its loans, in amounts and from insurers or guarantors, as it deems necessary or desirable.
§ -24 Loans; default. The authority may renegotiate, refinance, or foreclose any loan in default.
The authority may waive any default or consent to the modification of the terms of any loan or security agreement.
The authority may commence any action to protect or enforce any right conferred upon it by any law, mortgage, insurance policy, contract, or other agreement.
The authority may bid for and purchase the property secured by the loan at any foreclosure or other sale, or acquire or take possession of the property secured by the loan.
The authority may operate, manage, lease, dispose of, or otherwise deal with the property secured by the loan."
SECTION 2. This Act shall take effect upon its approval.
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