STAND. COM. REP. NO. 286

Honolulu, Hawaii

RE: S.B. No. 67

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. 67 entitled:

"A BILL FOR AN ACT RELATING TO INCLUSIONARY ZONING,"

begs leave to report as follows:

The purpose and intent of this measure is to prohibit any law, ordinance, or rule from imposing an inclusionary zoning requirement on housing offered exclusively for sale or rent in perpetuity to buyers or renters who are residents of the State, are owner-occupants or renters, and do not own any other real property.

Your Committee received testimony in support of this measure from the Hawaii Housing Finance and Development Corporation, Grassroot Institute of Hawaii, and one individual.

Your Committee finds that the State's chronic housing shortage is a significant factor in the relocation of residents out of Hawaii. According to a 2022 study conducted by the University of Hawaii Economic Research Organization, regulations such as inclusionary zoning has severely limited the ability of the housing market to develop the units necessary to meet existing demand. As existing regulations affect project feasibility, certain housing developments may be delayed or deemed infeasible, further limiting the supply of planned and existing housing. Therefore, this measure promotes regulatory efficiency with the development of housing projects to help certain renters and buyers remain in the State while securing housing classified as affordable.

Your Committee has amended this measure by 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. 67, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 67, 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