HB2512 SD1

PART I

SECTION 1. The legislature finds that the affordable housing crisis continues to be one of the State's most significant and challenging social problems and is a critical issue for many Hawaii residents. As the cost of home ownership and rentals increases, the State must continue to assist residents to obtain affordable housing.

This Act provides that assistance by:

(1) Appropriating funds to assist developers in contracting for third party review and certification to expedite the processing and issuance of building permits for affordable housing projects;

(2) Establishes a self-help housing trust fund under the Hawaii housing finance and development corporation to provide funding for self-help housing projects; and

(3) Increases the Hula Mae multifamily revenue bond authorization from $400,000,000 to $500,000,000 to not only provide home financing for residents but to also finance the purchase of the Kukui Gardens Rental Housing Complex.

PART II

SECTION 2. 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 2008-2009 for the Hawaii housing finance and development corporation to assist developers in contracting for third party review and certification to expedite the process and issuance of building permits for housing projects that are affordable to households with incomes 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. Third party review and certification shall apply to inspections and ministerial and discretionary permits. In processing requests for third party review and certification, the Hawaii housing finance and development corporation shall give priority to projects that allocate at least fifty per cent of the available units for persons and families with incomes at or below eighty per cent of the median family income.

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

PART III

SECTION 3. The legislature finds that self-help housing is the lowest-cost means of producing affordable housing for very‑low-income and low-income households. Self-help housing programs target families who are unable to buy clean, safe housing through conventional methods, and provides assistance to very-low-income and low-income households to construct their own homes. The savings from the reduction in labor costs allows otherwise ineligible families to own their own homes.

In Hawaii, more than 1,100 homes have been constructed using the self-help housing method for very-low-income, low-income, and moderate-income families. Additional funding, especially in the area of technical assistance, could allow self-help housing programs in the state to add an average of 50 additional units per year to production schedules. There is limited funding for technical assistance, which includes funding for construction supervision, development of construction plans, contractor payment processing, project bidding, subcontractor monitoring, recruiting and qualifying self-help builders, and family guidance and motivation throughout the entire self-help housing process. The typical technical assistance cost per self-help housing unit is $20,000. Although there are other sources of funding available for the construction of homes, additional funding to cover technical assistance costs will provide additional benefits to self-help housing programs and allow these programs to provide more housing opportunities to families in need.

The purpose of this part is to establish a self-help housing trust fund to be administered by the Hawaii housing finance and development corporation to provide funds for land acquisition, infrastructure costs, and technical assistance to self-help housing programs in the state.

SECTION 4. Chapter 201H, Hawaii Revised Statutes, is amended by adding a new subpart under part III to be appropriately designated and to read as follows:

" . SELF-HELP HOUSING TRUST FUND

§201H-A Definitions. As used in this subpart, unless the context otherwise requires:

"Fund" means the self-help housing trust fund established in this subpart.

"Self-help housing" means a model of housing production in which purchasers reduce the cost of their homes by contributing "sweat equity" — their own labor in the construction of their own homes.

"Technical assistance" means any assistance necessary to carry out housing efforts by or for very-low-income and low-income households to improve the quality or quantity of housing available to meet their needs, including construction supervision and planning, contractor payment processing and bidding, subcontractor monitoring, recruiting and qualifying self-help housing builders, and guiding and educating families throughout the entire self-help housing process.

§201H-B Self-help housing trust fund. (a) There is established the self-help housing trust fund to be administered by the corporation.

(b) An amount from the fund, to be set by the corporation and authorized by the legislature, may be used for administrative expenses incurred by the corporation in administering the fund; provided that fund moneys shall not be used to finance day-to-day administrative expenses of projects that are allotted fund moneys.

(1) Appropriations made by the legislature;

(2) Private contributions;

(3) Interest;

(4) Other returns; and

(5) Moneys from other sources.

(d) The moneys available in the fund shall be used to provide, in whole or in part, additional funding to self-help housing organizations for land acquisition, infrastructure, and technical assistance costs generated from self-help housing projects in the state. Permitted uses of the fund may include but are not limited to:

(1) Construction supervision and planning;

(2) Contractor payment processing and bidding;

(3) Subcontractor monitoring;

(4) Recruiting and qualifying self-help housing builders;

(5) Guiding and educating families throughout the entire self-help housing process; or

(6) Other self-help housing services or activities as provided in rules adopted by the corporation pursuant to chapter 91.

(e) Funds available for technical assistance of the self-help housing project shall be limited to $20,000 per unit.

(f) The corporation shall submit an annual report to the legislature no later than twenty days prior to the convening of each regular session describing the projects funded, its efforts to develop self-help housing projects, a description of proposals submitted for self-help housing projects and action taken on the proposals, and any barriers to developing self-help housing projects.

§201H-C Eligible self-help housing projects. (a) Funds under this subpart shall only be provided to self-help housing organizations that are tax-exempt charitable organizations under the Internal Revenue Code Section 501(c)(3) that offer self-help housing services in the state and have an option on the land they intend to develop.

(b) Technical assistance funding for self-help housing projects shall be limited to projects targeted to very-low-income, low-income, and moderate-income families. For the purposes of this subpart, the applicable median family income shall be the median family income for the county or standard metropolitan statistical area in which the project is located as determined by the United States Department of Housing and Urban Development, as adjusted from time to time. Technical assistance funding shall be provided based on the readiness of the project to use moneys available in the fund, such as whether the project site is ready for house construction or the track record of the eligible self-help housing organization in producing self-help housing units.

(c) The corporation may adopt rules pursuant to chapter 91 and include other eligibility criteria as it deems necessary to carry out the purposes of this subpart.

§201H-D Additional powers. The powers conferred upon the corporation by this subpart shall be in addition and supplemental to the powers conferred by any other law, and nothing in this subpart shall be construed as limiting any powers, rights, privileges, or immunities conferred."

SECTION 5. 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 2008-2009 to be deposited into the self-help housing trust fund.

SECTION 6. There is appropriated out of the self-help housing trust fund the sum of $ or so much thereof as may be necessary for fiscal year 2008-2009 to be used to provide additional funding for land acquisition, infrastructure, and technical assistance costs generated by self-help housing projects in the state.

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

PART IV

SECTION 7. Act 291, Session Laws of Hawaii 1980, as amended by Act 304, Session Laws of Hawaii 1996, as amended by Act 185, Session Laws of Hawaii 2004, as amended by Act 231, Session Laws of Hawaii 2007, is amended by amending section 11 to read as follows:

"SECTION 11. Issuance of revenue bond; amount authorized. Revenue bonds may be issued by the Hawaii housing finance and development corporation pursuant to part III, chapter 39 and subpart A of part III of chapter 201H, Hawaii Revised Statutes, in an aggregate principal amount not to exceed [~~$400,000,000,~~] $500,000,000 at such times and in such amounts as the Hawaii housing finance and development corporation deems advisable for the purpose of undertaking and maintaining any of the housing loan programs under subpart A of part III of chapter 201H, Hawaii Revised Statutes, relating to the funding or purchasing of eligible project loans."

PART V

SECTION 8. In codifying the new sections added by section 4 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect upon its approval; provided that sections 2, 5, and 6 shall take effect on July 1, 2008.

HOUSE OF REPRESENTATIVES	H.B. NO.	2512
TWENTY-FOURTH LEGISLATURE, 2008		H.D. 2
STATE OF HAWAII		S.D. 1