THE SENATE	S.B. NO.	612
THIRTY-THIRD LEGISLATURE, 2025		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO RENT TO BUILD EQUITY.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that the State's residents are facing a housing shortage. It is estimated that Hawaii needs sixty-five thousand to eighty thousand new units to keep up with housing demand. High demand and low supply result in housing prices that are simply too expensive for most local families. As of September 2018, the median home price on Oahu was $810,000.

The legislature also finds that long-term renters are even more disadvantaged. As rents hit historic highs, families are forced to dedicate more of their monthly incomes to rent, which prohibits them from making investments in their futures, paying off debt, or saving for home ownership. This is partially a result of Hawaii's development environment, in which renters have become increasingly disadvantaged while mainland and foreign developers siphon rental income or reap the profits of housing developments built with state benefits subsidized by state taxpayers.

The legislature notes that although developers may build affordable rental properties to take advantage of certain exemptions under the law, these developers often subsequently sell their properties at market rates after the initial affordable rental period expires. Families who had relied on affordable housing are then forced to find new housing accommodations, often without substantial savings or investments of their own.

The legislature therefore believes that developers who use state incentives should be required to share a portion of their sale profits with affordable housing tenants. Profit-sharing will facilitate the reinvestment of these profits in Hawaii's economy and enable local families to invest in their futures by building equity in homes of their own.

Accordingly, the purpose of this Act is to require the Hawaii housing finance and development corporation to conduct a study on rent-to-build equity for existing and future state‑financed housing.

SECTION 2. (a) The Hawaii housing finance and development corporation shall conduct a study on rent-to-build equity for existing and future state-financed housing.

(b) The study shall include:

(1) The imposition of a conveyance tax, capital gains tax, or other tax on projects following the expiration of the affordability period;

(2) Requirements to pay for tenant assistance for any displaced tenants; and

(3) Other topics deemed relevant to determining rent‑to‑build equity on existing and future state‑financed housing.

(c) The Hawaii housing finance and development corporation shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2026.

SECTION 3. This Act shall take effect on July 1, 2050.

Report Title:

HHFDC; Rent-to-Build Equity; Study; Report

Description:

Requires the Hawaii Housing Finance and Development Corporation to conduct a study on rent-to-build equity for existing and future state-financed housing. Requires a report to the Legislature. Effective 7/1/2050. (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.