HB3427 HD1

SECTION 1. According to the Corporation for Enterprise Development (Corporation) 2007-2008 "Scorecard for Hawaii," the State "lacks a comprehensive asset policy framework." In the Corporation's survey ranking the 50 states and the District of Columbia, it reported that Hawaii families "face significant challenges" both in purchasing a home and sustaining financial security. It goes on to state that Hawaii households have "unusually low net worth," are among the "most likely in the nation to have zero or negative net worth," and "lack sufficient savings to subsist above the poverty level for three months." As the survey ranked Hawaii at 44th and 48th among the 51 jurisdictions in home affordability and rate of homeownership, respectively, it seems that the dream of homeownership remains out of reach for far too many. In 2006, 59 per cent of households paid more than 30 per cent of their incomes for shelter each month. The gap between average wages earned by renters and the cost of rent in Hawaii is the highest in the nation. Average shelter costs for renter households rose by 40 per cent between 2003 and 2006. In the last four years, the median sale price for a single-family home exceeded $600,000. In this situation, the majority of families desiring to own a single-family dwelling are not able to find one that is affordable.

These financial hardships have also led to an increase in the incidence of homelessness in Hawaii. According to the 2007 Hawaii homeless service utilization report prepared by the University of Hawaii center on the family and the Hawaii public housing authority, the most frequently cited reason for homelessness among those surveyed was "financial problem". Close to 16,000 individuals accessed state services for the homeless between July 1, 2005, and June 30, 2006. Nearly one in five Hawaii residents is at risk of homelessness or of becoming one of the state's "hidden" homeless.

One alternative to this crisis that holds real promise for the State of Hawaii is self-help housing. Self-help housing is a low-cost form of housing development through which low-income and poor families are given the opportunity to build their own homes with the help of other homeowners and volunteers. Through the intense physical process of building their own homes, families provide significant "sweat equity" toward asset- building which can, in turn, strengthen ties among participant families, invest in community improvement, and create legacies to last for generations. A coalition of self-help housing providers is already active in Hawaii, and if it is successful in obtaining sufficient funding, is ready to expand the self-help housing model dramatically throughout the state over the next five years.

The purpose of this Act is to establish a self-help housing trust fund to provide technical assistance grants, construction grants, long-term zero-interest loans, long-term loans for land acquisition, and predevelopment costs.

SECTION 2. Chapter 201H, part III, Hawaii Revised Statutes, is amended by adding a new subpart to be appropriately designated and to read as follows:

" . SELF-HELP HOUSING TRUST FUND

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

(b) A certain amount from the fund that is authorized by the legislature and set by the corporation may be used for administrative expenses solely incurred by the corporation. Fund moneys shall not be used to finance the administrative expenses of any project or entity to which fund moneys have been allocated in the form of a grant or loan.

(1) Technical assistance grants not to exceed $20,000 per home;

(2) Construction grants;

(3) Long-term zero-interest loans; and

(4) Long-term loans for land acquisition; and

(5) Predevelopment costs.

(d) The corporation shall adopt rules pursuant to chapter 91 to carry out the purposes of this subpart.

§201H‑ Eligible fund applicants. Eligible applicants shall include nonprofit self-help housing organizations that offer self-help services in the state, have an option on the land they intend to develop, and are otherwise deemed qualified in accordance with the eligibility rules adopted by the corporation in accordance with this subpart.

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

SECTION 3. Section 247-7, Hawaii Revised Statutes, is amended to read as follows:

"§247-7 Disposition of taxes. All taxes collected each fiscal year under this chapter shall be deposited as follows:

(1) Ten per cent shall be paid into the land conservation fund established pursuant to section 173A-5;

(2) Fifty per cent shall be paid into the rental housing trust fund established by section 201H‑202; and

(3) Twenty-five per cent shall be paid into the natural area reserve fund established by section 195-9; provided that the funds paid into the natural area reserve fund shall be annually disbursed by the department of land and natural resources in the following priority:

(A) To natural area partnership and forest stewardship programs after joint consultation with the forest stewardship committee and the natural area reserves system commission;

(B) Projects undertaken in accordance with watershed management plans pursuant to section 171-58 or watershed management plans negotiated with private landowners, and management of the natural area reserves system pursuant to section 195-3; and

(4) Fifteen per cent shall be paid into the self-help housing trust fund established by section 201H‑ ."

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect on June 29, 2008; provided that the amendments made to section 247-7, Hawaii Revised Statutes, by this Act shall not be repealed when that section is reenacted on June 30, 2008, pursuant to section 4 of Act 222, Session Laws of Hawaii 2007.

HOUSE OF REPRESENTATIVES	H.B. NO.	3427
TWENTY-FOURTH LEGISLATURE, 2008		H.D. 1
STATE OF HAWAII