STAND. COM. REP. NO. 30

Honolulu, Hawaii

RE: S.B. No. 27

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 S.B. No. 27 entitled:

"A BILL FOR AN ACT RELATING TO HOUSING,"

begs leave to report as follows:

The purpose and intent of this measure is to exempt state-financed housing developments from the requirement to obtain approval from the applicable county council.

Your Committee received testimony in support of this measure from the Hawaii Appleseed Center for Law and Economic Justice, Housing Hawaiʻi's Future, Maui Chamber of Commerce, and one individual.

Your Committee received testimony in opposition to this measure from the Department of Planning and Permitting of the City and County of Honolulu, Lāhainā Strong, HI Good Neighbor, and sixteen individuals.

Your Committee received comments on this measure from the Hawaii Housing Finance and Development Corporation.

Your Committee finds that state financing is essential to the development of housing for low-income individuals and families. Presently, the Hawaii Housing Finance and Development Corporation (HHFDC) requires developers to undergo rigorous reviews for proposed housing developments. Mandating additional approval from a county legislative body introduces duplicate layers of bureaucracy, significantly increasing costs and delays for the development. As the State has a critical housing shortage, providing certain exemptions for housing developments that have received financing from the State and have been reviewed by HHFDC will alleviate certain barriers to promote, rather than hinder, the development of housing.

Your Committee notes that developers who receive state financing or financing commitments from the State to build housing classified as "affordable" are required to complete an extensive process to receive approval pursuant to section 201H-38, Hawaii Revised Statutes. Your Committee further notes testimony asserting that this measure would "skew" the approval process so that even a small amount of state funding would allow a developer to bypass the county approval process. However, HHFDC does not provide nominal financing for projects and typically, state financing constitutes a majority of a project's costs. Therefore, this measure expedites the process for certain developments while promoting operational efficiency for housing developments that receive financing from the State.

Your Committee has amended this measure by clarifying that projects that have received a financing commitment from the State shall be exempt from approval by the legislative body of the county in which the housing project is to be situated.

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 S.B. No. 27, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 27, 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,

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STANLEY CHANG, Chair