STAND. COM. REP. NO. 1292

 

Honolulu, Hawaii

                  

 

RE:    H.B. No. 417

       H.D. 1

       S.D. 1

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

 

Sir:

 

     Your Committee on Housing, to which was referred H.B. No. 417, H.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO THE RENTAL HOUSING REVOLVING FUND,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to:

 

     (1)  Establish the Housing Efficiency and Innovation Subaccount within the Rental Housing Revolving Fund;

 

     (2)  Specify permissible uses of funding and priorities; and

 

     (3)  Authorize the Hawaii Housing Finance and Development Corporation to transfer funds between the Housing Efficiency and Innovation Subaccount and the Rental Housing Revolving Fund without legislative approval.

 

     Your Committee received testimony in support of this measure from the Hawaii Housing Finance and Development Corporation (HHFDC); Holomua Collaborative; Title Guaranty Hawaii; HPM Building Supply; Hawaiʻi Gas; Mana Up; Tori Richard, Ltd.; Church of the Crossroads; Chamber of Commerce Hawaii; and one individual.

 

     Your Committee received comments on this measure from the Department of Budget and Finance and one individual.

 

     Your Committee finds that the State is experiencing a severe housing shortage, which has catalyzed higher rates of outmigration by local working individuals and families.  Presently, the Rental Housing Revolving Fund (RHRF) provides equity gap, low-interest loans for the development, construction, acquisition, preservation, and substantial rehabilitation of rental housing units.  RHRF has been instrumental in increasing the number of affordable housing units in the State.  However, demand for housing units has far exceeded existing inventory and the projects utilizing RHRF funds has resulted in an overproduction of units that cannot be offered to many local working families, due to their higher incomes.  As the State seeks solutions to ensure progress to meet housing demand, amending existing priority provisions for RHRF funds will ensure more housing projects can commence, including projects for a diverse income range to alleviate pressures on the current housing market.  Therefore, this measure provides HHFDC with greater flexibility to utilize innovative housing development approaches to increase the State's existing housing inventory.

 

     Your Committee has amended this measure by:

 

     (1)  Clarifying that RHRF funds shall be used for financing including but not limited to loans, equity investments, and credit enhancement;

 

     (2)  Clarifying that, for Tier 1 projects that are allocated low-income housing credits, priority shall be given to projects with a perpetual affordability commitment;

 

     (3)  Clarifying that the Housing Efficiency and Innovation Subaccount shall be used for financing including loans, equity investments, and credit enhancement, for-sale, rental, or rent-to-own housing projects exclusively for qualified residents as defined in section 201H-32, Hawaii Revised Statutes; provided that priority shall be given to:

 

          (A)  Projects that efficiently use state funding;

 

          (B)  Projects with a mix of units affordable to a diverse income range, as defined by HHFDC; and

 

          (C)  Projects prioritizing government employees;

 

     (4)  Clarifying that HHFDC shall give preference to a nonprofit or government project equally ranked with a for-profit project in allotting funds from RHRF;

 

     (5)  Inserting a blank appropriation out of the general revenues of the State for deposit into the RHRF;

 

     (6)  Inserting a blank appropriation out of the Housing Efficiency and Innovation Subaccount of the RHRF for the Hawaii Community Development Authority's ninety‑nine‑year leasehold project;

 

     (7)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

 

     (8)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

 

     Your Committee notes that this measure, as amended, contains unspecified appropriation amounts.  Should your Committee on Ways and Means choose to deliberate on this measure, your Committee respectfully requests that it consider inserting an appropriation amount of $150,000,000, or $75,000,000 for each year of the biennium, for the establishment of the Housing Efficiency and Innovation Subaccount.  Additionally, your Committee respectfully requests your Committee on Ways and Means to consider inserting an appropriation amount of $75,000,000 out of the Housing Efficiency and Innovation Subaccount for the Hawaii Community Development Authority's ninety-nine-year leasehold project.

 

     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. 417, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 417, H.D. 1, S.D. 1, and be referred to your Committee on Ways and Means.

 

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

 

 

 

________________________________

STANLEY CHANG, Chair