SB 3327: HCDA; Housing; Community Planning and Development; Quality of Life

A BILL FOR AN ACT

RELATING TO THE HAWAII COMMUNITY DEVELOPMENT AUTHORITY.

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

     SECTION 1.  The legislature finds that Act 252, Session Laws of Hawaii 2025 (Act 252), equipped the Hawaii community development authority with additional financing tools and enhanced authority to advance and improve development planning and projects.  Act 252 also modernized the authority's development model to reduce the cost of housing construction and improve critical community infrastructure, public spaces, and amenities that support a lower cost of living and a higher quality of life.

     The legislature further finds that the Hawaii community development authority's traditional development strategy relies heavily on requiring private developers to finance public infrastructure through negotiation and compromise.  This approach frequently results in inadequate or substandard public improvements that diminish community quality of life.  It also increases housing costs and reduces the availability of affordable housing units.  By contrast, modern development strategies used elsewhere shift much of the responsibility for financing public infrastructure away from developers and toward a mix of innovative revenue sources.  These approaches enable the creation of complete communities with stronger public infrastructure and amenities, while lowering housing and overall living costs for residents.

     The purpose of this Act is to provide statutory updates to ensure that the Hawaii community development authority can fully modernize its development strategy and adopt best practices that have been successfully implemented for decades in jurisdictions across the United States and around the world.

     SECTION 2.  Section 206E-6, Hawaii Revised Statutes, is amended to read as follows:

     "§206E-6  District-wide improvement program.  (a)  The authority shall develop a district-wide improvement program to identify necessary district-wide public facilities within a community development district.

     (b)  Whenever the authority determines to undertake, or causes to be undertaken, planning and development to include housing in a district or community, the authority shall endeavor to plan for complete communities that include, to the maximum extent appropriate:

     (1)  Infrastructure for utilities, including sewer, water, power, and similar needs;

     (2)  Affordable housing and related infrastructure;

     (3)  Public and private commercial spaces;

     (4)  Public spaces of meaningful scale that shall include:

          (A)  Public parks and gathering spaces;

          (B)  Public spaces for hosting markets and events;

          (C)  Natural areas with open green space and water for passive relaxation;

          (D)  Public spaces for active recreation; and

          (E)  Public spaces for pets and animals;

     (5)  Facilities for public arts and culture that include:

          (A)  Public libraries;

          (B)  Public works of art;

          (C)  Spaces for public performances and events;

          (D)  Accessible educational and narrative exhibits on the history, culture, and people of the area; and

          (E)  Flexible spaces and infrastructure for seasonal, rotating, and evolving programming and engagement;

     (6)  Public spaces for local economic development and community empowerment; provided that the primary focus shall be assisting local residents, entrepreneurs, and brands, including:

          (A)  Community-based economic development hubs and cooperative spaces such as public commercial kitchens, processing facilities, or similar work hubs available to the community and small businesses;

          (B)  Cooperative commercial and retail locations capable of supporting and aggregating products and services from numerous small businesses;

          (C)  Spaces for hosting micro-businesses such as food trucks, market stalls, and similar temporary business fronts;

          (D)  Spaces for hosting growing small businesses in permanent micro or small commercial locations or rotating pop-up locations; and

          (E)  Spaces for hosting larger, maturing businesses in regular food, retail, and commercial locations;

     (7)  Commuting infrastructure; provided that the infrastructure shall be designed to have the capacity to enable at least seventy per cent of all daily commutes to, from, and within the area to be safely and comfortably made by walking, biking, using micro‑mobility devices, or using public transit, between common destinations, as well as for long‑distance daily commuting without interruption pursuant to section 264-142 and shall include amenities such as rest stops, secure bicycle and micro-mobility device parking, and emergency support stations with tools and other resources as may be appropriate; and

     (8)  Public parking hubs of meaningful capacity, including charging for electric vehicles, a reasonable distance from which minimum requirements for parking stalls that are not designated as parking spaces reserved for persons with disabilities as defined in section 291-51 shall be prohibited; provided that of the parking stalls developed as part of the public parking hubs pursuant to this paragraph, twenty-five per cent shall be electric vehicle-ready.

     (c)  Public properties, public commercial facilities, and other relevant infrastructure shall be planned with the capacity to provide meaningful revenue generation from appropriate facilities, leases, programs, or other means as may be appropriate to help finance the infrastructure projects identified in this section, fund public community programs in the area, or financially sustain the community within the district.

     [(b)] (d)  Whenever the authority shall determine to undertake, or cause to be undertaken, any public facility as part of the district-wide improvement program, the cost of providing the public facilities shall be assessed against the real property in the community development district specially benefiting from [such] the public facilities[.], the revenue generated under subsection (c), or other revenue generated by any financing mechanism available to the authority under this chapter.  The authority shall determine the areas of the community development district [which] that will benefit from the public facilities to be undertaken and, if less than the entire community development district benefits, the authority may establish assessment areas within the community development district.  The authority may issue and sell bonds in [such] the amounts as may be authorized by the legislature to provide funds to finance [such] public facilities.  The authority shall fix the assessments against real property specially benefited.  All assessments made pursuant to this section shall be a statutory lien against each lot or parcel of land assessed from the date of the notice declaring the assessment until paid and [such] the lien shall have priority over all other liens except the lien of property taxes.  As between liens of assessments, the earlier lien shall be superior to the later lien.

     [(c)] (e)  Bonds issued to provide funds to finance public facilities shall be secured solely by the real properties benefited or improved, the assessments thereon, or by the revenues derived from the program for which the bonds are issued, including reserve accounts and earnings thereon, insurance proceeds, and other revenues, or any combination thereof.  The bonds may be additionally secured by the pledge or assignment of loans and other agreements or any note or other undertaking, obligation, or property held by the authority.  Bonds issued pursuant to this section and the income therefrom shall be exempt from all state and county taxation, except transfer and estate taxes.  The bonds shall be issued according and subject to the provisions of the rules adopted pursuant to this section.

     [(d)] (f)  Any other law to the contrary notwithstanding, in assessing real property for public facilities, the authority shall assess the real property within an assessment area according to the special benefits conferred upon the real property by the public facilities.  These methods may include assessment on a frontage basis or according to the area of real property within an assessment area or any other assessment method [which] that assesses the real property according to the special benefit conferred, or any combination thereof.  No [such] assessment levied against real property specially benefited as provided by this chapter shall constitute a tax on real property within the meanings of any constitutional or statutory provisions.

     [(e)] (g)  The authority shall adopt rules pursuant to chapter 91, and may amend the rules from time to time, providing for the method of undertaking and financing public facilities in an assessment area or an entire community development district.  The rules adopted pursuant to this section shall include[,] but are not limited to[,] the following:  methods by which the authority shall establish assessment areas; the method of assessment of real properties specially benefited; the costs to be borne by the authority, the county in which the public facilities are situated, and the property owners; the procedures before the authority relating to the creation of the assessment areas by the owners of real property therein, including provisions for petitions, bids, contracts, bonds, and notices; provisions relating to assessments; provisions relating to financing, such as bonds, special funds, advances from available funds, special funds for payment of bonds, payment of principal and interest, and sale and use of bonds; provisions relating to funds and refunding of outstanding debts; [and] provisions relating to limitations on time to sue[,]; and other related provisions.

     [(f)] (h)  Any provisions to the contrary notwithstanding, the authority [may], in its discretion, may enter into any agreement with the county in which the public facilities are located, to implement all or part of the purposes of this section.

     [(g)] (i)  All sums collected under this section shall be deposited in the Hawaii community development special fund established by section 206E-16; [except] provided that, notwithstanding section 206E-16, all moneys collected on account of assessments and interest thereon for any specific public facilities financed by the issuance of bonds shall be set apart in a separate special fund and applied solely to the payment of the principal and interest on these bonds[,]; the cost of administering, operating, and maintaining the program[,]; the establishment of reserves[,]; and other purposes as may be authorized in the proceedings providing for the issuance of the bonds.  If any surplus remains in any special fund after the payment of the bonds chargeable against that fund, it shall be credited to and become a part of the Hawaii community development special fund.  Moneys in the Hawaii community development special fund may be used to make up any deficiencies in the special fund.

     [(h)] (j)  If the public facilities to be financed through bonds issued by the authority may be dedicated to the county in which the public facilities are to be located, the authority shall ensure that the public facilities are designed and constructed to meet county requirements.

     [(i)] (k)  Notwithstanding any law to the contrary, whenever as part of a district-wide improvement program it becomes necessary to remove, relocate, replace, or reconstruct public utility facilities, the authority shall establish by rule the allocation of cost between the authority, the affected public utilities, and properties that may specially benefit from [such] the improvement, if any.  In determining the allocation of cost, the authority shall consider the cost allocation policies for improvement districts established by the county in which the removal, relocation, replacement, or reconstruction is to take place."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2050.

Report Title:

HCDA; Housing; Community Planning and Development; Quality of Life

Description:

Requires the Hawaii Community Development Authority, when planning and developing housing, to plan for complete communities that include various aspects supporting quality of life.  Effective 7/1/2050.  (SD1)

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 the Hawaii community development authority.

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

     SECTION 1.  The legislature finds that Act 252, Session Laws of Hawaii 2025 (Act 252), equipped the Hawaii community development authority with additional financing tools and enhanced authority to advance and improve development planning and projects.  Act 252 also modernized the authority's development model to reduce the cost of housing construction and improve critical community infrastructure, public spaces, and amenities that support a lower cost of living and a higher quality of life.

     The legislature further finds that the Hawaii community development authority's traditional development strategy relies heavily on requiring private developers to finance public infrastructure through negotiation and compromise.  This approach frequently results in inadequate or substandard public improvements that diminish community quality of life.  It also increases housing costs and reduces the availability of affordable housing units.  By contrast, modern development strategies used elsewhere shift much of the responsibility for financing public infrastructure away from developers and toward a mix of innovative revenue sources.  These approaches enable the creation of complete communities with stronger public infrastructure and amenities, while lowering housing and overall living costs for residents.

     The purpose of this Act is to provide statutory updates to ensure that the Hawaii community development authority can fully modernize its development strategy and adopt best practices that have been successfully implemented for decades in jurisdictions across the United States and around the world.

     SECTION 2.  Section 206E-6, Hawaii Revised Statutes, is amended to read as follows:

     "§206E-6  District-wide improvement program.  (a)  The authority shall develop a district-wide improvement program to identify necessary district-wide public facilities within a community development district.

     (b)  Whenever the authority determines to undertake, or causes to be undertaken, planning and development to include housing in a district or community, the authority shall endeavor to plan for complete communities that include, to the maximum extent appropriate:

     (1)  Infrastructure for utilities, including sewer, water, power, and similar needs;

     (2)  Affordable housing and related infrastructure;

     (3)  Public and private commercial spaces;

     (4)  Public spaces of meaningful scale that shall include:

          (A)  Public parks and gathering spaces;

          (B)  Public spaces for hosting markets and events;

          (C)  Natural areas with open green space and water for passive relaxation;

          (D)  Public spaces for active recreation; and

          (E)  Public spaces for pets and animals;

     (5)  Facilities for public arts and culture that include:

          (A)  Public libraries;

          (B)  Public works of art;

          (C)  Spaces for public performances and events;

          (D)  Accessible educational and narrative exhibits on the history, culture, and people of the area; and

          (E)  Flexible spaces and infrastructure for seasonal, rotating, and evolving programming and engagement;

     (6)  Public spaces for local economic development and community empowerment; provided that the primary focus shall be assisting local residents, entrepreneurs, and brands, including:

          (A)  Community-based economic development hubs and cooperative spaces such as public commercial kitchens, processing facilities, or similar work hubs available to the community and small businesses;

          (B)  Cooperative commercial and retail locations capable of supporting and aggregating products and services from numerous small businesses;

          (C)  Spaces for hosting micro-businesses such as food trucks, market stalls, and similar temporary business fronts;

          (D)  Spaces for hosting growing small businesses in permanent micro or small commercial locations or rotating pop-up locations; and

          (E)  Spaces for hosting larger maturing businesses in regular food, retail, and commercial locations;

     (7)  Commuting infrastructure; provided that the infrastructure shall be designed to have the capacity to enable at least seventy per cent of all daily commutes to, from, and within the area to be safely and comfortably made by walking, biking, using micro‑mobility devices, or using public transit, between common destinations, as well as for long‑distance daily commuting without interruption pursuant to section 264-142 and shall include amenities such as rest stops, secure bicycle and micro-mobility device parking, and emergency support stations with tools and other resources as may be appropriate; and

     (8)  Public parking hubs of meaningful capacity, including charging for electric vehicles, a reasonable distance from which the partnership shall waive requirements for or limit the number of parking stalls required by the State or counties; provided that of the parking stalls developed as part of the public parking hubs pursuant to this paragraph, twenty-five per cent shall be electric vehicle-ready.

     (c)  Public properties, public commercial facilities, and other relevant infrastructure shall be planned with the capacity to provide meaningful revenue generation from appropriate facilities, leases, programs, or other means as may be appropriate to help finance the infrastructure projects identified in this section, fund public community programs in the area, or financially sustain the community within the district.

     [(b)] (d)  Whenever the authority shall determine to undertake, or cause to be undertaken, any public facility as part of the district-wide improvement program, the cost of providing the public facilities shall be assessed against the real property in the community development district specially benefiting from [such] the public facilities[.], the revenue generated under subsection (c), or other revenue generated by any financing mechanism available to the authority under this chapter.  The authority shall determine the areas of the community development district [which] that will benefit from the public facilities to be undertaken and, if less than the entire community development district benefits, the authority may establish assessment areas within the community development district.  The authority may issue and sell bonds in [such] the amounts as may be authorized by the legislature to provide funds to finance [such] public facilities.  The authority shall fix the assessments against real property specially benefited.  All assessments made pursuant to this section shall be a statutory lien against each lot or parcel of land assessed from the date of the notice declaring the assessment until paid and [such] the lien shall have priority over all other liens except the lien of property taxes.  As between liens of assessments, the earlier lien shall be superior to the later lien.

     [(c)] (e)  Bonds issued to provide funds to finance public facilities shall be secured solely by the real properties benefited or improved, the assessments thereon, or by the revenues derived from the program for which the bonds are issued, including reserve accounts and earnings thereon, insurance proceeds, and other revenues, or any combination thereof.  The bonds may be additionally secured by the pledge or assignment of loans and other agreements or any note or other undertaking, obligation, or property held by the authority.  Bonds issued pursuant to this section and the income therefrom shall be exempt from all state and county taxation, except transfer and estate taxes.  The bonds shall be issued according and subject to the provisions of the rules adopted pursuant to this section.

     [(d)] (f)  Any other law to the contrary notwithstanding, in assessing real property for public facilities, the authority shall assess the real property within an assessment area according to the special benefits conferred upon the real property by the public facilities.  These methods may include assessment on a frontage basis or according to the area of real property within an assessment area or any other assessment method [which] that assesses the real property according to the special benefit conferred, or any combination thereof.  No [such] assessment levied against real property specially benefited as provided by this chapter shall constitute a tax on real property within the meanings of any constitutional or statutory provisions.

     [(e)] (g)  The authority shall adopt rules pursuant to chapter 91, and may amend the rules from time to time, providing for the method of undertaking and financing public facilities in an assessment area or an entire community development district.  The rules adopted pursuant to this section shall include, but are not limited to, the following:  methods by which the authority shall establish assessment areas; the method of assessment of real properties specially benefited; the costs to be borne by the authority, the county in which the public facilities are situated, and the property owners; the procedures before the authority relating to the creation of the assessment areas by the owners of real property therein, including provisions for petitions, bids, contracts, bonds, and notices; provisions relating to assessments; provisions relating to financing, such as bonds, special funds, advances from available funds, special funds for payment of bonds, payment of principal and interest, and sale and use of bonds; provisions relating to funds and refunding of outstanding debts; and provisions relating to limitations on time to sue, and other related provisions.

     [(f)] (h)  Any provisions to the contrary notwithstanding, the authority [may], in its discretion, may enter into any agreement with the county in which the public facilities are located, to implement all or part of the purposes of this section.

     [(g)] (i)  All sums collected under this section shall be deposited in the Hawaii community development special fund established by section 206E-16; except that notwithstanding section 206E-16, all moneys collected on account of assessments and interest thereon for any specific public facilities financed by the issuance of bonds shall be set apart in a separate special fund and applied solely to the payment of the principal and interest on these bonds, the cost of administering, operating, and maintaining the program, the establishment of reserves, and other purposes as may be authorized in the proceedings providing for the issuance of the bonds.  If any surplus remains in any special fund after the payment of the bonds chargeable against that fund, it shall be credited to and become a part of the Hawaii community development special fund.  Moneys in the Hawaii community development special fund may be used to make up any deficiencies in the special fund.

     [(h)] (j)  If the public facilities to be financed through bonds issued by the authority may be dedicated to the county in which the public facilities are to be located, the authority shall ensure that the public facilities are designed and constructed to meet county requirements.

     [(i)] (k)  Notwithstanding any law to the contrary, whenever as part of a district-wide improvement program it becomes necessary to remove, relocate, replace, or reconstruct public utility facilities, the authority shall establish by rule the allocation of cost between the authority, the affected public utilities, and properties that may specially benefit from [such] the improvement, if any.  In determining the allocation of cost, the authority shall consider the cost allocation policies for improvement districts established by the county in which the removal, relocation, replacement, or reconstruction is to take place."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.

Report Title:

HCDA; Housing; Community Planning and Development; Quality of Life

Description:

Requires the Hawaii Community Development Authority, when planning and developing housing, to plan for complete communities that include various aspects supporting quality of life.

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. 2598

Honolulu, Hawaii

RE:     S.B. No. 3327

        S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committees on Water, Land, Culture and the Arts and Housing, to which was referred S.B. No. 3327 entitled:

"A BILL FOR AN ACT RELATING TO THE HAWAII COMMUNITY DEVELOPMENT AUTHORITY,"

beg leave to report as follows:

     The purpose and intent of this measure is to require the Hawaii Community Development Authority, when planning and developing housing, to plan for complete communities that include various aspects supporting quality of life.

     Your Committees received testimony in support of this measure from the Hawaiʻi Climate Change Mitigation and Adaptation Commission, State Council on Developmental Disabilities, Oahu Metropolitan Planning Organization, AARP Hawaiʻi, Housing Hawaiʻi's Future, and one individual.

     Your Committees received testimony in opposition to this measure from one individual.

     Your Committees received comments on this measure from the Hawaiʻi Community Development Authority.

     Your Committees find that the Hawaii Community Development Authority's traditional development strategy relies heavily on requiring private developers to finance infrastructure through negotiation and compromise, frequently resulting in inadequate and substandard public improvements, increased housing costs, and reduction in the availability of affordable housing units.  By contrast, modern development strategies shift the financing of public infrastructure away from developers and toward a mixture of innovative revenue sources, which enables the creation of complete communities, improves the quality of public infrastructure and amenities, and lowers housing and overall living costs for residents.  This measure ensures the Hawaii Community Development Authority can fully modernize its development strategy and adopt best practices that have long been implemented to the benefit of communities across the United States and internationally.

     Your Committees have amended this measure by:

     (1)  Specifying that, at a reasonable distance from public parking hubs of meaningful capacity, including charging for electric vehicles, minimum requirements for parking stalls that are not designated as parking spaces reserved for persons with disabilities as defined in section 291-51 shall be prohibited;

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

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

     As affirmed by the records of votes of the members of your Committees on Water, Land, Culture and the Arts and Housing that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 3327, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 3327, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Water, Land, Culture and the Arts and Housing,