HB 1722: Hawaii Community Development Authority; Affordable Housing; Ninety-Nine Year Leasehold Program; Condominium Units; Owner‑Occupied Residential Use

A BILL FOR AN ACT

RELATING TO RESIDENTIAL CONDOMINIUMS.

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

     SECTION 1.  Section 206E-281, Hawaii Revised Statutes, is amended by amending the definition of "owner-occupied use" to read as follows:

     ""Owner-occupied residential use" means any use currently permitted in existing residential zones consistent with owner occupancy.  ["Owner-occupied residential use" does not include renting or subleasing by the owner of a residential condominium unit to any tenant or sublessee of any kind.]"

     SECTION 2.  Section 206E-283, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§206E-283[]]  Rules; guidelines.  (a)  [Residential] At least sixty per cent of the residential condominium units within urban redevelopment sites shall [not be advertised for rent, rented, or used for any purpose other than owner-occupied residential use.] be set aside for owner-occupied residential use for no less than ten years from the date of initial purchase of the unit.  The authority, by rule, shall establish penalties for violations of this subsection up to and including forced sale of a residential condominium unit within an urban redevelopment site.

     (b)  The design [and], development, and construction contracts for residential condominium units within an urban redevelopment site shall not be subject to chapter 103D[.]; provided that every laborer and mechanic performing work on the job site for the construction of residential condominium units shall be paid the prevailing wage established by the director of labor and industrial relations pursuant to section 104-2.

     (c)  Development should be revenue-neutral to the greatest extent possible.

     (d)  Urban redevelopment sites shall maximize walkability.

     (e)  One hundred per cent of the residential condominium units within an urban redevelopment site shall be initially offered for sale for owner-occupied residential use; provided that if after sixty days there are unsold units, up to forty per cent of the units may be sold to qualified residents, as defined in section 201H-32."

     SECTION 3.  Section 206E-284, Hawaii Revised Statutes, is amended as follows:

     1.   By amending subsection (a) to read:

     "(a)  The authority shall adopt rules pursuant to chapter 91 for the sale of the leasehold interest of residential condominium units under its control within urban redevelopment sites; provided that each lease shall be for a term of ninety‑nine years.  The rules shall include the following requirements [for an eligible buyer or owner of a residential condominium unit] to be an eligible buyer for purchase of a residential condominium unit within an urban redevelopment site[:] set aside for owner-occupied residential use:

     (1)  The person shall be a qualified resident of the State, as defined in section 201H-32; and

     (2)  The person shall not use a residential condominium unit within an urban redevelopment site for any purpose other than owner-occupied residential use[; and

     (3)  The person, the person's spouse, or any other person intending to live with the eligible buyer or owner, shall not own any other real property, including any residential and non-residential property, beneficial ownership of trusts, and co-ownership or fractional ownership, while owning a residential condominium unit within an urban redevelopment site; provided that an eligible buyer may own real property up to six months after closing on the purchase of a residential condominium unit within an urban redevelopment site; provided further that an owner of a residential condominium unit within an urban redevelopment site in the process of selling the residential condominium unit may own other real property up to six months prior to closing on the sale of the residential condominium unit to an eligible buyer;] for a period of no less than ten years from the date of the initial purchase of the unit, except as provided in section 206E-283(e);

provided that the rules adopted pursuant to this subsection may require at least [fifty] sixty per cent of the residential condominium units be sold to an individual or household with an income of up to one hundred forty per cent of the area median income.  The rules shall include strict enforcement of owner‑occupancy, including a prohibition on renting or subleasing a residential condominium unit within an urban redevelopment site to any tenant or sublessee[.] for residential condominium units set aside for owner-occupied residential use.  The authority may also establish rules for a minimum number of days residents shall be physically present on the premises and a maximum number of days non-residents may have access to the premises."

2. By amending subsections (c) and (d) to read:

     "(c)  [Residential] Except as provided in section 206E-283(e), residential condominium units within an urban redevelopment site set aside for owner-occupied residential use shall be sold only to other eligible buyers[.] for a period of no less than ten years from the date of the initial purchase of the unit.

     (d)  An owner of a residential condominium unit within an urban redevelopment site set aside for owner-occupied residential use may sell the owner's residential condominium unit; provided that the authority shall have the right of first refusal to purchase the residential condominium unit for certain period of time and for a buyback price to be determined by the authority.  If the authority does not exercise its right to purchase the residential condominium unit, the residential condominium unit may be sold by the owner to an eligible buyer.  Upon the death of the owner of a residential condominium unit within an urban redevelopment site[,] set aside for owner‑occupied residential use, the residential condominium unit may be transferred to the deceased's heir by devise or as any other real property under existing law; provided that the deceased's heir shall meet the requirements listed in subsection (a); provided further that if the deceased's heir does not meet requirements to accept transfer of the residential condominium unit, the deceased's heir shall sell the residential condominium unit to an eligible buyer."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 3000.

Report Title:

Hawaii Community Development Authority; Affordable Housing; Ninety-Nine Year Leasehold Program; Condominium Units; Owner‑Occupied Residential Use

Description:

Clarifies the Ninety-Nine Year Leasehold Program by:  including the renting or subleasing by the owner of a residential condominium unit to any tenant or sublessee of any kind as a form of owner occupation; requiring at least sixty per cent of the residential condominium units within urban redevelopment sites to be set aside for owner-occupied residential use for at least ten years from the date of initial purchase; exempting the design, development, and construction of contracts for residential condominium units within an urban redevelopment site from procurement requirements; allowing an individual to own other real property and still qualify for the program; and allowing the sale of up to forty per cent of residential condominium units to qualified residents if there are units available after being advertised for sale for more than sixty days.  Effective 7/1/3000.  (HD1)

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

A BILL FOR AN ACT

relating to residential condominiums.

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

     SECTION 1.  Section 206E-281, Hawaii Revised Statutes, is amended by amending the definition of "owner-occupied use" to read as follows:

     ""Owner-occupied residential use" means any use currently permitted in existing residential zones consistent with owner occupancy.  ["Owner-occupied residential use" does not include renting or subleasing by the owner of a residential condominium unit to any tenant or sublessee of any kind.]"

     SECTION 2.  Section 206E-283, Hawaii Revised Statutes, is amended to read as follows:

     "[[]§206E-283[]]  Rules; guidelines.  "(a)  [Residential] At least sixty per cent of the residential condominium units within urban redevelopment sites shall [not be advertised for rent, rented, or used for any purpose other than owner-occupied residential use.] be set aside for owner-occupied residential use for not less than ten years from the date of initial purchase of the unit.  The authority, by rule, shall establish penalties for violations of this subsection up to and including forced sale of a residential condominium unit within an urban redevelopment site.

     (b)  The design [and], development, and construction contracts for residential condominium units within an urban redevelopment site shall not be subject to chapter 103D[.]; provided that every laborer and mechanic performing work on the job site for the construction of residential condominium units shall be paid the prevailing wage established by the director of labor and industrial relations pursuant to section 104-2.

     (c)  Development should be revenue-neutral to the greatest extent possible.

     (d)  Urban redevelopment sites shall maximize walkability.

     (e)  One hundred per cent of the residential condominium units within an urban redevelopment site shall be initially offered for sale for owner-occupied residential use; provided that, if after sixty days there are unsold units, up to forty per cent of the units may be sold to qualified residents, as defined in section 201H-32."

     SECTION 3.  Section 206E-284, Hawaii Revised Statutes, is amended as follows:

     1.   By amending subsection (a) to read:

     "(a)  The authority shall adopt rules pursuant to chapter 91 for the sale of the leasehold interest of residential condominium units under its control within urban redevelopment sites; provided that each lease shall be for a term of ninety‑nine years.  The rules shall include the following requirements [for an eligible buyer or owner of a residential condominium unit] to be an eligible buyer for purchase of a residential condominium unit within an urban redevelopment site[:] set aside for owner-occupied residential use:

     (1)  The person shall be a qualified resident of the State, as defined in section 201H-32; and

     (2)  The person shall not use a residential condominium unit within an urban redevelopment site for any purpose other than owner-occupied residential use[; and

     (3)  The person, the person's spouse, or any other person intending to live with the eligible buyer or owner, shall not own any other real property, including any residential and non-residential property, beneficial ownership of trusts, and co-ownership or fractional ownership, while owning a residential condominium unit within an urban redevelopment site; provided that an eligible buyer may own real property up to six months after closing on the purchase of a residential condominium unit within an urban redevelopment site; provided further that an owner of a residential condominium unit within an urban redevelopment site in the process of selling the residential condominium unit may own other real property up to six months prior to closing on the sale of the residential condominium unit to an eligible buyer;] for a period of not less than ten years from the date of the initial purchase of the unit;

provided that the rules adopted pursuant to this subsection may require at least [fifty] sixty per cent of the residential condominium units be sold to an individual or household with an income of up to one hundred forty per cent of the area median income.  The rules shall include strict enforcement of owner‑occupancy, including a prohibition on renting or subleasing a residential condominium unit within an urban redevelopment site to any tenant or sublessee[.] for residential condominium units set aside for owner-occupied residential use.  The authority may also establish rules for a minimum number of days residents shall be physically present on the premises and a maximum number of days non-residents may have access to the premises."

2. By amending subsections (c) and (d) to read:

     "(c)  Residential condominium units within an urban redevelopment site set aside for owner-occupied residential use shall be sold only to other eligible buyers[.] for a period of not less than ten years from the date of the initial purchase of the unit.

     (d)  An owner of a residential condominium unit within an urban redevelopment site set aside for owner-occupied residential use may sell the owner's residential condominium unit; provided that the authority shall have the right of first refusal to purchase the residential condominium unit for certain period of time and for a buyback price to be determined by the authority.  If the authority does not exercise its right to purchase the residential condominium unit, the residential condominium unit may be sold by the owner to an eligible buyer.  Upon the death of the owner of a residential condominium unit within an urban redevelopment site[,] set aside for owner‑occupied residential use, the residential condominium unit may be transferred to the deceased's heir by devise or as any other real property under existing law; provided that the deceased's heir shall meet the requirements listed in subsection (a); provided further that if the deceased's heir does not meet requirements to accept transfer of the residential condominium unit, the deceased's heir shall sell the residential condominium unit to an eligible buyer."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on July 1, 2050.

Report Title:

Hawaii Community Development Authority; Affordable Housing; Ninety-Nine Year Leasehold Program; Condominium Units; Owner‑Occupied Residential Use

Description:

Clarifies the Ninety-Nine Year Leasehold Program to:  (1) Require at least sixty per cent of the residential condominium units within urban redevelopment sites to be set aside for owner-occupied residential use for not less than ten years from the date of initial purchase of the unit;  (2) Amend eligibility requirements to buy or own a residential condominium unit within an urban redevelopment site to allow an individual to own other real property;  (3) Amend the term "owner-occupied residential use" to include the renting or subleasing by the owner of a residential condominium unit to any tenant or sublessee of any kind; and  (4) Allow the sale of up to forty per cent of residential condominium units to qualified residents if there are units available after being advertised for sale for more than sixty days.  Effective 7/1/2050.

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

STAND. COM. REP. NO.  573-26

Honolulu, Hawaii

                , 2026

RE:   H.B. No. 1722

      H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

     Your Committee on Housing, to which was referred H.B. No. 1722 entitled:

"A BILL FOR AN ACT RELATING TO RESIDENTIAL CONDOMINIUMS,"

begs leave to report as follows:

     The purpose of this measure is to clarify the Ninety-Nine Year Leasehold Program by:

     (1)  Clarifying that renting or subleasing by an owner of a residential condominium unit to any tenant or sublessee of any kind is considered owner-occupied residential use;

     (2)  Requiring at least sixty percent of the residential condominium units within urban redevelopment sites to be set aside for owner-occupied residential use for at least ten years from the date of initial purchase;

     (3)  Exempting the design, development, and construction of contracts for residential condominium units within an urban redevelopment site from procurement requirements;

     (4)  Allowing an individual who owns other real property to qualify for the program; and

     (5)  Allowing the sale of up to forty percent of residential condominium units to qualified residents if there are still units available after being advertised for sale for more than sixty days.

     Your Committee received testimony in support of this measure from the Hawaii Community Development Authority and two individuals.  Your Committee received comments on this measure from AARP Hawaiʻi.

     Your Committee finds that the State continues to face a significant shortage of affordable, owner-occupied housing, and that statutory restrictions within the Ninety‑Nine Year Leasehold Program have hindered the viability of projects intended to expand long‑term homeownership opportunities.  The current program structure, particularly limitations on eligibility, resale, and the absence of flexible owner-occupancy provisions, has contributed to stalled development efforts and reduced marketability of leasehold condominium projects.  Your Committee believes that strengthening and modernizing the program's owner‑occupancy requirements while providing clearer, more workable development and resale standards will allow these projects to move forward and expand access to stable homeownership for Hawaii residents.

     Your Committee has amended this measure by:

     (1)  Changing the effective date to July 1, 3000, to encourage further discussion; and

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

     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. 1722, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1722, H.D. 1, and be referred to your Committee on Consumer Protection & Commerce.

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