STAND. COM. REP. NO. 23

Honolulu, Hawaii

RE: S.B. No. 891

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committees on Housing and Education, to which was referred S.B. No. 891 entitled:

"A BILL FOR AN ACT RELATING TO HOUSING DEVELOPMENT,"

beg leave to report as follows:

The purpose and intent of this measure is to exempt Hawaii Housing Finance and Development Corporation housing projects approved for a general excise tax exemption, additions to existing dwelling units, accessory dwelling units, ohana dwelling units, and affordable housing projects developed by the Hawaii Public Housing Authority from school impact fee requirements.

Your Committees received testimony in support of this measure from the Hawaii Public Housing Authority, Hawaiian Community Assets, O‘ahu County Committee on Legislative Priorities of the Democratic Party of Hawai‘i, Hawaiian Community Development, Hawaii Habitat for Humanity Association, and one individual. Your Committees received testimony in opposition to this measure from the Chamber of Commerce Hawaii, Building Industry Association of Hawaii, and two individuals. Your Committees received comments on this measure from the Department of Education and Tax Foundation of Hawaii.

Your Committees find that there is a severe lack of affordable housing in the State, especially for those most vulnerable to the high costs of living. The Hawaii Public Housing Authority has identified fourteen redevelopment projects along the rail line for development through public-private partnerships and is in the midst of executing those projects, some of which would be subject to school impact fees. According to testimony received by your Committees, for two out of the three redevelopment projects currently being undertaken by the Hawaii Public Housing Authority, the school impact fees would be approximately $26,300,000. The school impact fees would increase the total cost of the redevelopment and ultimately the developer fee for affordable housing. Therefore, your Committees find that lowering the cost of construction for new affordable housing units, accessory and ohana dwelling units, and alteration or expansion of existing dwelling units by exempting those units from school impact fees is a vital component in addressing the shortage of housing in Hawaii.

As affirmed by the records of votes of the members of your Committees on Housing and Education that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 891 and recommend that it pass Second Reading and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Housing and Education,

________________________________ MICHELLE N. KIDANI, Chair

________________________________ STANLEY CHANG, Chair