STAND. COM. REP. NO. 3456

Honolulu, Hawaii

RE: H.B. No. 1917

H.D. 1

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2022

State of Hawaii

Sir:

Your Committee on Housing, to which was referred H.B. No. 1917, H.D. 1, entitled:

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

begs leave to report as follows:

The purpose and intent of this measure is to indefinitely extend the deadline for the Hawaii Housing Finance and Development Corporation to renegotiate or issue a new ground lease for the Front Street Apartments affordable housing project before the Corporation's requirement to initiate condemnation proceedings is triggered.

Prior to decision making on this measure, your Committee made available for public review a proposed S.D. 1 of this measure. The proposed S.D. 1 amends this measure by:

(1) Removing the indefinite extension of the ground lease on the Front Street Apartments; and

(2) Inserting an appropriation of private activity bonds and funds from the Rental Housing Revolving Fund to the Hawaii Housing Finance and Development Corporation for the purpose of allowing an eligible developer to acquire and rehabilitate the Front Street Apartments affordable housing project in Maui County.

Your Committee received testimony in support of the proposed S.D. 1 from two members of the Maui County Council, Affordable Housing and Economic Development Foundation, Hawaii Appleseed Center for Law & Economic Justice, Ahe Group, and one individual. Your Committee received testimony in opposition to the proposed S.D. 1 from the Hawaii Housing Finance and Development Corporation. Your Committee received comments on the proposed S.D. 1 from the Department of Budget and Finance.

Your Committee finds that there is a severe shortage of affordable rental housing in the County of Maui. To address the shortage, the Legislature passed Act 150, Session Laws of Hawaii 2018 (Act 150), which appropriated funds to support the Front Street Apartments in Maui County. However, the Hawaii Housing Finance and Development Corporation was unable to renegotiate its lease for the Front Street Apartments before the 2021 deadline set by Act 150, thereby triggering a requirement for the Corporation to initiate condemnation proceedings. Your Committee further finds that a long-term solution for the Front Street apartments is necessary. Additionally, your Committee notes a need for the Hawaii Housing Finance and Development Corporation to work with the Department of the Attorney General and Department of Budget and Finance to find consensus language on this measure.

Accordingly, your Committee has amended this measure by adopting the proposed S.D. 1 and further amending this measure by changing the ground lease to be an amount determined by the Hawaii Housing Finance and Development Corporation Board of Directors.

As affirmed by the record of votes of the members of your Committee on Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1917, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1917, H.D. 1, S.D. 1, and be referred to your Committees on Judiciary and Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Housing,

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STANLEY CHANG, Chair