Appropriates $4,500,000 to Habitat for Humanity as a grant pursuant to the grants and subsidies law for no interest loans to build 200 homes in the State.

A BILL FOR AN ACT

SECTION 1. The legislature finds that the price of owning and renting a home has risen above the ability of working families who earn below fifty per cent of the median income and, accordingly, increasing numbers of working families are unable to find a place to live. There are now six thousand homeless people in Hawaii at any one time. Moreover, family shelters are full, and homeless families must wait three months or longer to get into emergency or transitional shelters.

The legislature further finds that Habitat for Humanity builds safe, decent, and affordable homes at no interest, with mortgages of $45,000 to $65,000, and monthly payments ranging from $300 to $650 for families with incomes from thirty to fifty per cent of the median income. Families also contribute sweat equity by volunteering five hundred hours toward building their own homes and homes for others. This process strengthens communities by bringing together people from all walks of life to participate in building affordable homes that provide a stable environment for raising children for families who might otherwise become homeless.

Hawaii Habitat for Humanity has established a statewide Fund for Humanity, a revolving loan fund that makes no interest loans to the seven home-building Habitat for Humanity affiliates across the islands. Habitat affiliates are found in Honolulu and Leeward Oahu, Hilo and Kona on the Big Island, Maui, Kauai, and Molokai. A grant from the State for $4,000,000 would provide two hundred loans at $20,000 per home. These no interest loans would each leverage approximately $40,000 in additional funds per home. Leveraged funds come from other major donors, churches, and a variety of fundraising activities. A grant would also assist in leveraging no cost land from the State, the counties, and the department of Hawaiian home lands. On twenty-year mortgages, the $20,000 loans will be repaid at the rate of $1,000 per year per home. Within ten years, the repayments will be able to fund another one hundred homes for $2,000,000 and in twenty years, the loan repayment will have funded another two hundred homes for low-income families.

Each home also leverages five hundred hours of sweat equity from new homeowners and a total of approximately seven thousand hours of community building labor. In order for the Habitat affiliates to increase their capacity to add to the number of homes built in their communities, each $20,000 home loan will be accompanied by an allocation of an additional $2,000 per home for capacity building at the affiliate level. The total funding for this capacity building will total $400,000. In order for Hawaii Habitat for Humanity to increase its capacity to manage the additional $4,400,000 for two hundred revolving home loans and two hundred capacity building grants, Hawaii Habitat for Humanity requires $100,000 for administration, which amounts to 2.23 per cent per loan. The legislature finds that the total cost of $4,500,000 to prevent homelessness of at-risk working families is far less than the cost of providing shelter for two hundred families or of building two hundred affordable rental units.

SECTION 2. There is appropriated out of the general revenues of the State of Hawaii the sum of $4,500,000, or so much thereof as may be necessary for fiscal year 2006-2007, as a grant pursuant to chapter 42F, Hawaii Revised Statutes, to the Hawaii Habitat for Humanity to fund the building of two hundred homes, capacity building for Habitat affiliates, and administration costs pursuant to this Act.

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

SECTION 3. This Act shall take effect upon its approval, except that section 2 shall take effect on July 1, 2006.