Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 141 entitled:

begs leave to report as follows:

The purpose of this measure is to create an exemption for the development of workforce housing and affordable housing on leased residential lots.

Testimony in support of this measure was submitted by the Housing and Community Development Corporation of Hawaii, the Land Use Research Foundation of Hawaii, and Hawaii Reserves, Inc.

Your Committee finds that in Hawaii, the cost of living has been and continues to be high. A significant contributing factor to the high cost of living is the high cost of housing, which is in turn significantly impacted by the high cost of land. Chapter 516, Hawaii Revised Statutes, was enacted to address the shortage of fee simple residential land and the inflation of residential land values. Although it has helped to create more fee simple residential land, spiraling inflationary land values have severely negatively impacted the ability of Hawaii's workforce to afford home ownership. Your Committee determines that an exemption from the lease-to-fee conversion law for workforce and affordable housing leased on residential lots will create an attractive incentive for landowners to put land into affordable residential development on a long-term lease basis.

Accordingly, your Committee has amended this measure by:

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 141, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 141, S.D. 1, and be referred to the Committee on Judiciary and Hawaiian Affairs.