STAND. COM. REP. NO. 6

Honolulu, Hawaii

RE: S.B. No. 38

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. 38 entitled:

"A BILL FOR AN ACT RELATING TO HOUSING,"

begs leave to report as follows:

The purpose and intent of this measure is to prohibit the legislative body of a county from making modifications to housing development proposals that would increase the cost of the project.

Your Committee received testimony in support of this measure from the Hawaii Housing Finance and Development Corporation, Grassroot Institute of Hawaii, NAIOP Hawaii, Maui Chamber of Commerce, Housing Hawaiʻi's Future, 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 twelve individuals.

Your Committee finds that county land-use rules are a key driver of Hawaii's housing shortage. Housing regulations in the State are the strictest in the country, and when paired with increasing costs to build, finance, and insure affordable housing developments, these developments become less feasible due to area median income restrictions. Furthermore, affordable housing projects may initially appear financially feasible and meet county and state requirements, but when these projects go before a county council for final approval, new conditions may be added that frequently lead to increased costs, making the project no longer financially viable. As a result, less housing gets developed, contributing to the housing shortage. This measure is therefore intended to eliminate unnecessary risks and uncertainties for overall project budgets and prevent delays for well-scrutinized developments.

Your Committee has amended this measure by:

(1) Clarifying that a county legislative body shall not make any modifications or impose any conditions to a housing project that would increase the cost of the project; and

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

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. 38, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 38, S.D. 1, and be referred to your Committee on Judiciary.

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

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STANLEY CHANG, Chair