SB3167

SECTION 1. The legislature finds that Hawaii's lack of rental unit supply leads to higher rents for households of all income levels, leaving all tenants with less disposable income, increasing the personal stress of tenants, reducing tenant quality of life, and exacerbating the population overcrowding and homelessness problems. Without sufficient affordable rental housing, the future social, community, and economic consequences for Hawaii may be dire. The need for affordable rental units is particularly acute for households with low incomes. Approximately ninety-three to ninety-five per cent of rental unit tenants have a household income of less than one hundred forty per cent of the median Hawaii income.

The legislature further finds that, although many reasons contribute to the lack of affordable rental units for low- and moderate-income households, the primary reason is a poor rate of return for investments in affordable rental housing projects. Notably, government regulations that restrict affordable housing development and lengthen the time tenants qualify for affordable rental housing also contribute to the lack of affordable rental housing. Given these barriers, the lack of affordable rental housing requires the concentrated attention of state government at the highest level.

The legislature further finds that Act 127, Session Laws of Hawaii 2016 (Act 127), established an affordable rental housing goal to be met by 2026. To assist in the State's efforts to reach that goal, Act 127 also established the affordable rental housing special action team, which was directed to issue reports in 2017, 2018, and 2019 and develop a ten-year plan, which was presented to the Governor in 2018. However, the affordable rental housing special action team ceased to exist in 2019 and there have been no updates to the State's ten-year plan since it was completed in 2018.

Accordingly, the purpose of this Act is to re-establish the affordable rental housing special action team to issue additional reports in 2023, 2024, and 2025 and produce updates to the State's ten-year plan.

SECTION 2. Special action team on affordable rental housing; establishment, purpose, termination. (a) There is established for administrative purposes within the office of planning and sustainable development a temporary special action team on affordable rental housing.

(b) The special action team is established for the special purpose of recommending actions to increase the supply of rental housing, particularly rental housing affordable to low- and moderate-income families.

(c) The special action team shall terminate on December 31, 2025; provided that the chair and members of the special action team may represent themselves as the chair or a member after December 31, 2025, when testifying or commenting on actions or recommendations of the team.

SECTION 3. Membership. (a) The special action team shall be composed of the following members:

(1) The director of the office of planning and sustainable development, who shall serve as chair;

(2) The executive director of the Hawaii housing finance and development corporation;

(3) A member of the house of representatives, to be appointed by the speaker of the house of representatives;

(4) A member of the senate, to be appointed by the president of the senate;

(5) A representative from each county, to be appointed by the mayor of the respective county;

(6) A member of the public to represent affordable housing advocacy groups, to be appointed by the governor;

(7) A member of the public to represent non-profit developers with expertise in housing development, to be appointed by the governor; and

(8) A member of the public to represent for-profit developers with expertise in housing development, to be appointed by the governor.

(b) A special action team member may designate another officer or employee of the member's department or agency or member's representative group to attend one or more meetings in place of the member. The special action team member shall make the designation in writing and submit it to the special action team chair before the meeting that the designee is to attend. The designation may apply to more than one meeting or the entire term of the special action team. The designation may be withdrawn at any time by written notice to the special action team chair.

A designee of a special action team member shall have all rights and privileges of the member while serving as a designee.

(d) Members of the special action team shall receive no additional compensation for service on the team beyond their normal compensation.

Members shall be reimbursed for expenses necessarily incurred for service on the team.

(e) The special action team may elect officers from among its members.

SECTION 4. Duties. (a) The special action team shall recommend to the governor, legislature, and other parties, actions to be taken to achieve the affordable rental housing goal set forth in section 3 of Act 127, Session Laws of Hawaii 2016.

(b) To comply with subsection (a), the special action team shall recommend short- and long-term actions to:

(1) Increase the supply of rental housing affordable for low- and moderate-income families;

(2) Increase the supply of rental housing for the remainder of the resident population;

(3) Target rental housing development in transit-oriented development areas as a top priority;

(4) Preserve the existing rental housing stock;

(5) Enhance the attractiveness of and market for rental housing relative to fee simple housing; and

(6) Mitigate community concerns over the development of nearby rental housing projects, particularly affordable public or private rental housing projects for low-income families and individuals.

(c) The special action team shall also establish performance measures and timelines for the development of affordable rental housing units for the following:

(1) Families with not more than thirty per cent of the area median income;

(2) Families with more than thirty per cent, but not more than fifty per cent, of the area median income;

(3) Families with more than fifty percent, but not more than sixty per cent, of the area median income;

(4) Families with more than sixty per cent, but not more than eighty per cent, of the area median income;

(5) Families with more than eighty per cent, but not more than one hundred per cent, of the area median income;

(6) Families with more than one hundred per cent, but not more than one hundred twenty per cent, of the area median income; and

(7) Families with more than one hundred twenty per cent, but not more than one hundred forty per cent, of the area median income.

The special action team shall also recommend the agency that should monitor and periodically report on the achievement of the performance measures and compliance with the timelines.

(d) The special action team shall also address and make recommendations to reconcile the public interests that may compete against and restrict the development of rental housing. The competing public interests shall include the following:

(1) Regulatory burden associated with developing, managing, and operating subsidized affordable housing projects;

(2) Preservation of the environment;

(3) Protection of the quality of life of the surrounding communities;

(4) Devotion of scarce public resources for mixed-use projects that include fee simple, market-priced housing;

(5) Reluctance to use more public lands for affordable rental housing development; and

(6) Preference of most persons for low-density dwelling units.

(e) The special action team shall also update the State's ten-year plan that was developed pursuant to Act 127, Session Laws of Hawaii 2016. The updated ten-year plan shall be incorporated into the state housing plan. In identifying parcels of land, the special action team shall consider:

(1) The estimated number of affordable housing units the parcel of land can sustain;

(2) What infrastructure challenges there are in developing affordable housing units on the parcel of land; and

(3) The estimated cost to develop affordable housing units and address the infrastructure challenges on the parcel of land.

(f) In the performance of its duties, the special action team shall periodically consult with the Hawaii interagency council on homelessness.

SECTION 5. Annual reports. The special action team shall submit reports to the legislature of its findings, recommendations, and progress toward the ten-year plan no later than twenty days prior to the convening of the regular sessions of 2023, 2024, and 2025.

SECTION 6. Update to the Hawaii state planning act. The special action team shall submit legislation proposing an update to the Hawaii State Planning Act to include the state housing plan no later than twenty days prior to the convening of the regular session of 2023, in accordance with this Act.

SECTION 7. Appropriation. (a) 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 2022-2023 for the administration and operation of the special action team on rental housing, including the establishment and filling of one full-time equivalent (1.0 FTE) temporary planner position, which shall be exempt from chapter 76, Hawaii Revised Statutes, and to propose an update to the Hawaii State Planning Act to include the state housing plan, in accordance with this Act.

The sum appropriated shall be expended by the office of planning and sustainable development for the purposes of this Act.

(b) In addition to the appropriation under subsection (a), the office of planning and sustainable development may use other moneys appropriated to it relating to the purposes of this Act.

SECTION 8. This Act shall take effect upon its approval; provided that section 7 shall take effect on July 1, 2022.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	3167
THIRTY-FIRST LEGISLATURE, 2022
STATE OF HAWAII