SB 71: Rental Housing Revolving Fund; Mixed-Income Subaccount; Workforce Rental Housing; Director of Finance; Appropriation
- Session Year: 2025-2026
- House: Senate
- Latest Version Date: 2025-03-17
Current Status:
Failed
(2026-04-02: Received notice of the discharge of all House Conferees (Hse. Com. No. 457).)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Final Decking
Enacted
Establishes the Mixed-Income Subaccount within the Rental Housing Revolving Fund that targets workforce rental housing projects for persons and families with incomes at or below one hundred forty per cent of the area median income. Authorizes the Director of Finance to transfer funds from the Rental Housing Revolving Fund into the Mixed-Income Subaccount. Appropriates funds into and out of the Mixed-Income Subaccount of the Rental Housing Revolving Fund. Effective 7/1/3000. (HD1)
Renames the Rental Housing Revolving Fund to the State Housing Revolving Fund. Clarifies the prioritization of, and eligibility and preference criteria for, projects that may be funded by, State Housing Revolving Fund moneys. Effective 7/1/2050. (SD2)
Renames the Rental Housing Revolving Fund to the State Housing Revolving Fund (SHRF). Clarifies the prioritization of funds from the SHRF and eligible applicants of the SHRF. Amends the preference criteria and eligibility requirements for applicant developers seeking assistance from the SHRF. (SD1)
Amends the preference criteria and eligibility requirements for applicant developers seeking assistance from the Rental Housing Revolving Fund.
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THE SENATE |
S.B. NO. |
71 |
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THIRTY-THIRD LEGISLATURE, 2025 |
S.D. 2 |
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STATE OF HAWAII |
H.D. 1 |
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A BILL FOR AN ACT
RELATING TO THE RENTAL HOUSING REVOLVING FUND.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
The legislature further finds that although funding is appropriated annually to the rental housing revolving fund to finance projects serving households earning up to one hundred forty per cent of area median income, the funds are prioritized for federal and state low-income housing tax credit financed projects, which generally only serve households earning up to sixty per cent of the area median income. Because the demand for revolving fund financing from first-priority tax credit projects far exceeds funding availability, mixed-income projects, including those with units serving households earning up to one hundred forty per cent of the area median income, are not able to utilize the rental housing revolving fund.
The legislature also finds that strategies are needed to help keep local residents in the State. Having affordable rental housing opportunities for working families reduces net domestic outmigration and preserves critical segments of the State's labor force.
Accordingly, the purpose of this Act is to provide a dedicated source of funds to finance mixed-income rental housing projects by:
(1) Establishing the mixed-income subaccount within the rental housing revolving fund to target workforce rental housing projects for persons and families with incomes at or below one hundred forty per cent of the area median income;
(2) Authorizing the director of finance to transfer funds from the rental housing revolving fund into the mixed-income subaccount; and
(3) Appropriating funds into and out of the mixed-income subaccount of the rental housing revolving fund.
SECTION 2. Section 201H-202, Hawaii Revised Statutes, is amended to read as follows:
"§201H-202 Rental housing revolving fund. (a) There is established the rental housing revolving fund to be administered by the corporation.
(b) An amount from the fund, to be set by the corporation and authorized by the legislature, may be used for administrative expenses incurred by the corporation in administering the corporation's housing finance programs; provided that fund moneys shall not be used to finance day-to-day administrative expenses of projects allotted fund moneys.
(c)
The following may be deposited into the fund[:] or into the
mixed-income subaccount established under subsection (f): appropriations made by the legislature,
conveyance taxes pursuant to section 247-7, private contributions, repayment of
loans, interest, other returns, and moneys from other sources.
(d) The fund shall be used to provide loans for the development, pre-development, construction, acquisition, preservation, and substantial rehabilitation of rental housing units. The corporation shall not forgive any loan made from the fund unless the corporation forecloses on the project. Permitted uses of the fund may include but are not limited to planning, design, land acquisition, costs of options, agreements of sale, downpayments, equity financing, capacity building of nonprofit housing developers, credit enhancement, gap financing, or other housing development services or activities as provided in rules adopted by the corporation pursuant to chapter 91. The rules may provide for a means of recapturing loans or grants made from the fund if a rental housing project financed under the fund is refinanced or sold at a later date. The rules may also provide that moneys from the fund shall be leveraged with other financial resources to the extent possible.
(e)
[Moneys] Except as provided in subsection (f), moneys
available in the fund shall be used for the purpose of providing, in whole or
in part, loans for rental housing projects demonstrating project readiness,
efficiency, and feasibility acceptable to the corporation in the following
order of priority:
[(1) For
projects that were awarded low-income housing credits pursuant to paragraph
(2), priority shall be given to projects with a perpetual
affordability commitment;
(2)] (1) Projects or units in projects that are
allocated low-income housing credits pursuant to the state housing credit
ceiling under section 42(h) of the Internal Revenue Code of 1986, as amended,
or projects or units in projects that are funded by programs of the United
States Department of Housing and Urban Development and United States Department
of Agriculture Rural Development wherein:
(A) At least fifty per cent of the available units are for persons and families with incomes at or below eighty per cent of the median family income of which at least five per cent of the available units are for persons and families with incomes at or below thirty per cent of the median family income; and
(B) The remaining units are for persons and families with incomes at or below one hundred per cent of the median family income;
provided that the corporation may establish rules to ensure full occupancy of fund projects; provided that for projects that were awarded low-income housing credits pursuant to this paragraph, priority shall be given to projects with a perpetual affordability commitment. For purposes of this paragraph, "perpetual" means the life of the project; and
[(3)] (2) Mixed-income rental projects or units
in a mixed-income rental project [wherein all of the available units are]
for persons and families with incomes at or below one hundred forty per cent of
the median family income.
(f) There is established within the fund a mixed-income subaccount. Moneys in the mixed-income subaccount shall be used to make loans to mixed-income rental projects or units in a mixed-income rental project for persons and families with incomes at or below one hundred forty per cent of the area median income. The corporation shall establish an application process for the allocation of funds in the mixed-income subaccount, separate from the fund allocation process pursuant to section 201H-204(c), that gives preference to projects meeting the following criteria that are listed in descending order of priority:
(1) A diverse range of affordability, targeting persons and families with incomes up to one hundred forty per cent of the median family income;
(2) Projects located on state or county owned land;
(3) Projects for which a loan from the subaccount is reasonably projected to be fully repaid within forty years from funding; and
(4) Any other criteria as the corporation deems necessary to carry out the purposes of this subsection.
If the corporation, after applying the process described in this subsection, finds a nonprofit project equally ranked with a for-profit or government project, the corporation shall give preference to the nonprofit project in allotting funds from the mixed-income subaccount.
Moneys derived from the repayment of loans funded by the mixed-income subaccount, interest thereon, and related fees and returns shall be deposited into the mixed-income subaccount.
[(f)] (g) There is established within the fund a bond
volume cap recycling program subaccount.
The bond volume cap recycling program subaccount shall be maintained as
a reserve for the bond volume cap recycling program established pursuant to
section 39B-2(f).
[(g)] (h) The corporation shall submit an annual report
to the legislature no later than twenty days prior to the convening of each
regular session describing the projects funded and, with respect to rental
housing projects targeted for persons and families with incomes at or below
thirty per cent of the median family income, its efforts to develop those
rental housing projects, a description of proposals submitted for this target
group and action taken on the proposals, and any barriers to developing housing
units for this target group.
[(h)] (i) For the purposes of this subpart, the
applicable median family income shall be the median family income for the
county or standard metropolitan statistical area in which the project is
located as determined by the United States Department of Housing and Urban
Development, as adjusted from time to time.
[(i)] (j) The corporation may provide loans under this
section; provided that the corporation shall establish loan-to-value ratios to
protect the fund from inordinate risk and that under no circumstances shall the
rules permit the loan-to-value ratio to exceed one hundred per cent; provided
further that the underwriting guidelines include a debt-coverage ratio of no
less than 1.0 to 1.
[(j)] (k) For the period commencing July 1, 2005,
through June 30, 2009, the fund may be used to provide grants for rental units
set aside for persons and families with incomes at or below thirty per cent of
the median family income in any project financed in whole or in part by the
fund in proportion of those units to the total number of units in the
project. At the conclusion of the period
described in this subsection, the corporation shall report to the legislature
on the number and use of grants provided and whether the grants were an
effective use of the funds for purposes of developing rental housing for
families at or below thirty per cent of the median family income."
SECTION 3. Section 201H-204, Hawaii Revised Statutes, is amended to read as follows:
"[[]§201H-204[]] Eligible projects. (a)
Activities eligible for assistance from the fund shall include but not
be limited to:
(1) New construction, rehabilitation, or
preservation of low-income or mixed-income rental housing units that
meet the criteria for eligibility described in subsection (c)[;] or
section 201H-202(f);
(2) The leveraging of moneys with the use of fund assets;
(3) Pre-development activity grants or loans to nonprofit organizations; and
(4) Acquisition of housing units for the purpose of preservation as low-income or very low-income housing.
(b) Preference shall be given to projects producing units in at least one of the following categories:
(1) Multifamily units;
(2) Attached single-family units;
(3) Apartments;
(4) Townhouses;
(5) Housing units above commercial or industrial space;
(6) Single room occupancy units;
(7) Accessory apartment units;
(8) Employee housing;
(9) United States Department of Housing and Urban Development mixed finance development of public housing units; and
(10) Other types of units meeting the criteria for
eligibility set forth in subsection (c)[.] or section 201H-202(f).
(c) [The] Except as provided in section
201H-202(f), the corporation shall establish an application process for
fund allocation that gives preference to projects meeting the following
criteria that are listed in descending order of priority:
(1) Serve the original target group;
(2) Provide at least five per cent of the total number of units for persons and families with incomes at or below thirty per cent of the median family income;
(3) Provide the maximum number of units for persons or families with incomes at or below eighty per cent of the median family income;
(4) Are committed to serving the target group over a longer period of time;
(5) Increase the integration of income levels of the immediate community area;
(6) Meet the geographic needs of the target group of the proposed rental housing project, such as proximity to employment centers and services; and
(7) Have favorable past performance in developing, owning, managing, or maintaining affordable rental housing.
The corporation may include other criteria as it deems necessary to carry out the purposes of this subpart.
If the corporation, after applying the process described in this subsection, finds a nonprofit project equally ranked with a for-profit or government project, the corporation shall give preference to the nonprofit project in allotting fund moneys."
SECTION 4. Section 247-7, Hawaii Revised Statutes, is amended to read as follows:
"§247-7 Disposition of taxes. All taxes collected under this chapter shall be paid into the state treasury to the credit of the general fund of the State, to be used and expended for the purposes for which the general fund was created and exists by law; provided that of the taxes collected each fiscal year:
(1) Ten per cent or $5,100,000, whichever is less, shall be paid into the land conservation fund established pursuant to section 173A-5; and
(2) Fifty
per cent or $38,000,000, whichever is less, shall be paid into the rental
housing revolving fund established by section 201H-202[.]; provided
that funds allocated under this paragraph may be transferred into the mixed-income
subaccount established pursuant to section 201H-202(f)."
SECTION 5. The director of finance may transfer moneys from the rental housing revolving fund to the rental housing revolving fund mixed-income subaccount in an amount not to exceed $ for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027.
SECTION 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to be deposited into the mixed-income subaccount of the rental housing revolving fund established pursuant to section 201H-202(f), Hawaii Revised Statutes.
SECTION 7. There is appropriated out of the mixed-income subaccount of the rental housing revolving fund established pursuant to section 201H-202(f), Hawaii Revised Statutes, the sum of $ or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 for the purposes of the subaccount.
The sums appropriated shall be expended by the Hawaii housing finance and development corporation for the purposes of this Act.
SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 9. This Act shall take effect on July 1, 3000.
Report Title:
Rental Housing Revolving Fund; Mixed-Income Subaccount; Workforce Rental Housing; Director of Finance; Appropriation
Description:
Establishes the Mixed-Income Subaccount within the Rental Housing Revolving Fund that targets workforce rental housing projects for persons and families with incomes at or below one hundred forty per cent of the area median income. Authorizes the Director of Finance to transfer funds from the Rental Housing Revolving Fund into the Mixed-Income Subaccount. Appropriates funds into and out of the Mixed-Income Subaccount of the Rental Housing Revolving Fund. 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.
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THE SENATE |
S.B. NO. |
71 |
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THIRTY-THIRD LEGISLATURE, 2025 |
S.D. 2 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO THE RENTAL HOUSING REVOLVING FUND.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
Furthermore, the rental housing revolving fund is overbuilding rental housing at the sixty per cent area median income level. According to the Hawaii housing finance and development corporation's 2019 Hawaii housing planning study, the corporation forecasts a demand of only 1,789 rental units for households earning fifty to sixty per cent of the area median income, or three hundred fifty-eight units per year, over the 2020 – 2025 period, which is almost exclusively what comprises low-income housing tax credit projects. Presently, the Hawaii housing finance and development corporation is financing well over one thousand low-income housing tax credit units per year.
Due to the dramatic overbuilding of this narrow market segment, over thirty per cent of low-income housing tax credit units are being rented by tenants earning thirty per cent of the area median income, who are severely cost burdened as a result. The same 2019 study forecasts demand of 1,855 rental units, or three hundred seventy-one units per year, for renters earning one hundred twenty per cent to one hundred forty per cent of area median income over the same five-year period. By contrast, there is demand for 11,872 ownership units for households earning one hundred twenty per cent of the area median income or greater, which equals 2,156 units at one hundred twenty to one hundred forty per cent of area median income; 3,982 units at one hundred forty to one hundred eighty per cent of area median income; and 5,734 units greater than one hundred eighty per cent of area median income, over the same five-year period, or 2,374 units per year. These figures indicate that there is much greater demand than what the market is currently supplying. Therefore, prioritizing financing for tier I and tier II area median income segments, while enabling surplus funds to be used to produce housing in the most efficient means possible, will greatly increase housing production in the State.
Accordingly, the purpose of this Act is to:
(1) Rename the rental housing revolving fund to the state housing revolving fund;
(2) Establish a tiered system for the prioritization of moneys awarded from the state housing revolving fund;
(3) Require the Hawaii housing finance and development corporation to establish an application process for fund allocation; and
(4) Require the Hawaii housing finance and development corporation to prioritize projects that require the least amount of funding per unit per year.
SECTION 2. Chapter 201H, Hawaii Revised Statutes, is amended by amending the title of subpart J of part III to read as follows:
"J.
[Rental] State Housing
Revolving Fund"
SECTION 3. Section 201H-201, Hawaii Revised Statutes, is amended as follows:
1. By amending the definition of "fund" to read:
""Fund"
means the [rental] state housing revolving fund established
pursuant to section 201H-202."
2. By repealing the definitions of "efficiency", "feasibility", and "project readiness".
[""Efficiency"
means the amount of state financial resources required per unit.
"Feasibility"
means reasonableness of project budget and schedule assumptions.
"Project
readiness" means a project that is anticipated to commence construction
within one year of award of financing."]
SECTION 4. Section 201H-202, Hawaii Revised Statutes, is amended as follows:
1. By amending its title and subsection (a) to read:
"§201H-202 [Rental] State housing revolving fund. (a)
There is established the [rental] state housing revolving
fund to be administered by the corporation."
2. By amending subsections (d) and (e) to read:
"(d) The fund shall be used to provide loans for
the development, pre-development, construction, acquisition, preservation, and
substantial rehabilitation of [rental] housing units. The corporation shall not forgive any loan
made from the fund unless the corporation forecloses on the project. Permitted uses of the fund may include but
are not limited to planning, design, land acquisition, costs of options,
agreements of sale, downpayments, equity financing, capacity building of
nonprofit housing developers, credit enhancement, gap financing, or other
housing development services or activities as provided in rules adopted by the
corporation pursuant to chapter 91. The
rules may provide for a means of recapturing loans or grants made from the fund
if a [rental] housing project financed under the fund is refinanced or
sold at a later date. The rules may also
provide that moneys from the fund shall be leveraged with other financial
resources to the extent possible.
(e) Moneys available in the fund shall be used
for the purpose of providing, in whole or in part, loans for [rental]
housing projects [demonstrating project readiness, efficiency, and
feasibility acceptable to the corporation] in the following order of
priority:
(1) For projects that were awarded low-income housing credits pursuant to paragraph (2), priority shall be given to projects with a perpetual affordability commitment;
(2) Projects or units in projects that are
allocated low‑income housing credits pursuant to the state housing credit
ceiling under section 42(h) of the Internal Revenue Code of 1986, as amended,
or projects or units in projects that are funded by programs of the United
States Department of Housing and Urban Development and United States Department
of Agriculture Rural Development [wherein:
(A) At least fifty per cent of the
available units are for persons and families with incomes at or below eighty
per cent of the median family income of which at least five per cent of the
available units are for persons and families with incomes at or below thirty
per cent of the median family income; and
(B) The remaining units are for persons
and families with incomes at or below one hundred per cent of the median family
income;
provided
that the corporation may establish rules to ensure full occupancy of fund
projects; and]; provided that paragraphs (1) and (2) shall apply to
awards up to the annual number of rental units that the corporation's most
recent Hawaii housing planning study forecasts are needed for persons and
families with incomes at fifty to sixty per cent of the area median income;
(3) Mixed-income [rental] projects
or units in a mixed‑income [rental] project [wherein all of the
available units are for persons and families with incomes at or below one
hundred forty per cent of the median family income.]; provided that this
paragraph shall apply to awards up to the annual number of rental units that
the corporation's most recent Hawaii housing planning study forecasts are
needed for persons and families with incomes at one hundred twenty to one
hundred forty per cent of the area median income; and
(4) Projects that are exclusively for qualified residents as defined in section 201H-32."
3. By amending subsection (g) to read:
"(g) The corporation shall submit an annual report
to the legislature no later than twenty days prior to the convening of each
regular session describing the projects funded and, with respect to [rental]
housing projects targeted for persons and families with incomes at or below
thirty per cent of the median family income, its efforts to develop those [rental]
housing projects, a description of proposals submitted for this target group
and action taken on the proposals, and any barriers to developing housing units
for this target group."
SECTION 5. Section 201H-204, Hawaii Revised Statutes, is amended to read as follows:
"[[]§201H-204[]]
Eligible projects. (a) Activities eligible for assistance from the
fund shall include but not be limited to:
(1) New construction, rehabilitation, or
preservation of low-income rental housing units [that meet the criteria for
eligibility described in subsection (c)];
(2) The leveraging of moneys with the use of fund assets;
(3) Pre-development activity grants or loans to nonprofit organizations; and
(4) Acquisition of housing units for the purpose of preservation as low-income or very low-income housing.
(b) [Preference shall be given to projects
producing units in at least one of the following categories:
(1) Multifamily units;
(2) Attached single-family units;
(3) Apartments;
(4) Townhouses;
(5) Housing units above commercial or
industrial space;
(6) Single room occupancy units;
(7) Accessory apartment units;
(8) Employee housing;
(9) United States Department of Housing
and Urban Development mixed finance development of public housing units; and
(10) Other types of units meeting the
criteria for eligibility set forth in subsection (c).]
The corporation shall establish an application process for fund allocation. Preference shall be given to projects meeting the following criteria:
(1) Multifamily units near stations of a locally preferred alternative of a mass transit project;
(2) State- or county-owned projects;
(3) Projects that are required to be conveyed to the State or a county at a definite time;
(4) Projects owned by organizations obliged to use all financial surplus generated by the projects to construct, manage, or rehabilitate owner- or renter‑occupied housing in the State;
(5) Projects with a perpetual affordability commitment;
(6) Projects of applicant developers who request loan terms no longer than five years; and
(7) Projects requiring the least amount of state funding per unit per year.
[(c) The corporation shall establish an
application process for fund allocation that gives preference to projects
meeting the following criteria that are listed in descending order of priority:
(1) Serve the original target group;
(2) Provide at least five per cent of
the total number of units for persons and families with incomes at or below
thirty per cent of the median family income;
(3) Provide the maximum number of units
for persons or families with incomes at or below eighty per cent of the median
family income;
(4) Are committed to serving the target
group over a longer period of time;
(5) Increase the integration of income
levels of the immediate community area;
(6) Meet the geographic needs of the
target group of the proposed rental housing project, such as proximity to
employment centers and services; and
(7) Have favorable past performance in
developing, owning, managing, or maintaining affordable rental housing.
The
corporation may include other criteria as it deems necessary to carry out the
purposes of this subpart.
If
the corporation, after applying the process described in this subsection, finds
a nonprofit project equally ranked with a for-profit or government project, the
corporation shall give preference to the nonprofit project in allotting fund
moneys.]"
SECTION 6. Sections 201H-6(f), 201H-87, and 247-7, Hawaii Revised Statutes, are amended by substituting the term "state housing revolving fund", or similar term, wherever the term "rental housing revolving fund", or similar term, appears, as the context requires.
SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 8. This Act shall take effect on July 1, 2050.
Report Title:
HHFDC; RHRF; SHRF; Preference Criteria; Eligibility; Fund Allocation; Application Process; Preference; Priorities
Description:
Renames the Rental Housing Revolving Fund to the State Housing Revolving Fund. Clarifies the prioritization of, and eligibility and preference criteria for, projects that may be funded by, State Housing Revolving Fund moneys. Effective 7/1/2050. (SD2)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
|
THE SENATE |
S.B. NO. |
71 |
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THIRTY-THIRD LEGISLATURE, 2025 |
S.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO THE RENTAL HOUSING REVOLVING FUND.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
Furthermore, the rental housing revolving fund is overbuilding rental housing at the sixty per cent area median income level. According to the Hawaii housing finance and development corporation's 2019 Hawaii housing planning study, the corporation forecasts a demand of only 1,789 rental units for households earning fifty to sixty per cent of the area median income, or three hundred fifty-eight units per year, over the 2020 – 2025 period, which is almost exclusively what comprises low-income housing tax credit projects. Presently, the Hawaii housing finance and development corporation is financing well over one thousand low-income housing tax credit units per year.
Due to the dramatic overbuilding of this narrow market segment, over thirty per cent of low-income housing tax credit units are being rented by tenants earning thirty per cent of the area median income, who are severely cost burdened as a result. The same 2019 study forecasts demand of 1,855 rental units, or three hundred seventy-one units per year, for renters earning one hundred twenty per cent to one hundred forty per cent of area median income over the same five-year period. By contrast, there is demand for 11,872 ownership units for households earning one hundred twenty per cent of the area median income or greater, which equals 2,156 units at one hundred twenty to one hundred forty per cent of area median income; 3,982 units at one hundred forty to one hundred eighty per cent of area median income; and 5,734 units greater than one hundred eighty per cent of area median income, over the same five-year period, or 2,374 units per year. These figures indicate that there is much greater demand than what the market is currently supplying. Therefore, prioritizing financing for tier I and tier II area median income segments, while enabling surplus funds to be used to produce housing in the most efficient means possible, will greatly increase housing production in the State.
Accordingly, the purpose of this Act is to:
(1) Rename the rental housing revolving fund to the state housing revolving fund;
(2) Establish a tiered system for the prioritization of moneys awarded from the state housing revolving fund;
(3) Require the Hawaii housing finance and development corporation to establish an application process for fund allocation; and
(4) Require the Hawaii housing finance and development corporation to prioritize projects that require the least amount of funding per unit per year.
SECTION 2. Chapter 201H, Hawaii Revised Statutes, is amended by amending the title of subpart J of part III to read as follows:
"J.
[Rental] State Housing Revolving Fund"
SECTION 3. Section 201H-6, Hawaii Revised Statutes, is amended by amending subsection (f) to read as follows:
"(f) The corporation, through the housing advocacy and information system, shall develop and maintain an affordable housing inventory registry to identify:
(1) Affordable housing projects developed by the
corporation utilizing moneys in the [rental] state housing
revolving fund established pursuant to section 201H-202 or the dwelling unit
revolving fund established pursuant to section 201H-191;
(2) State and federal public housing projects identified by the Hawaii public housing authority;
(3) United States Department of Housing and Urban Development Region 9 federally supported and privately managed housing projects; and
(4) State and county lands that may be developed for affordable housing, as defined in section 201H-57(b)."
SECTION 4. Section 201H-87, Hawaii Revised Statutes, is amended to read as follows:
"[[]§201H-87[]]
Applications for financing; application periods. If
sufficient funding is available, the corporation shall open at minimum two
application periods each year for the receipt of applications for financing
from parties interested in applying for financing for the development of
affordable housing in the State from the low-income housing tax credit program,
Hula Mae multi-family program, [rental] state housing revolving
fund program, and dwelling unit revolving fund program. Applications for the four programs may be
consolidated for administrative efficiency."
SECTION 5. Section 201H-201, Hawaii Revised Statutes, is amended as follows:
1. By amending the definition of "fund" to read:
""Fund"
means the [rental] state housing revolving fund established
pursuant to section 201H-202."
2. By repealing the definitions of "efficiency", "feasibility", and "project readiness".
[""Efficiency"
means the amount of state financial resources required per unit.
"Feasibility"
means reasonableness of project budget and schedule assumptions.
"Project
readiness" means a project that is anticipated to commence construction
within one year of award of financing."]
SECTION 6. Section 201H-202, Hawaii Revised Statutes, is amended as follows:
1. By amending its title and subsection (a) to read:
"§201H-202 [Rental] State housing revolving fund. (a)
There is established the [rental] state housing revolving
fund to be administered by the corporation."
2. By amending subsections (d) and (e) to read:
"(d) The fund shall be used to provide loans for
the development, pre-development, construction, acquisition, preservation, and
substantial rehabilitation of [rental] housing units. The corporation shall not forgive any loan
made from the fund unless the corporation forecloses on the project. Permitted uses of the fund may include but
are not limited to planning, design, land acquisition, costs of options,
agreements of sale, downpayments, equity financing, capacity building of
nonprofit housing developers, credit enhancement, gap financing, or other
housing development services or activities as provided in rules adopted by the
corporation pursuant to chapter 91. The
rules may provide for a means of recapturing loans or grants made from the fund
if a [rental] housing project financed under the fund is refinanced or
sold at a later date. The rules may also
provide that moneys from the fund shall be leveraged with other financial
resources to the extent possible.
(e) Moneys available in the fund shall be used
for the purpose of providing, in whole or in part, loans for [rental]
housing projects [demonstrating project readiness, efficiency, and
feasibility acceptable to the corporation] in the following order of
priority:
(1) For projects that were awarded low-income housing credits pursuant to paragraph (2), priority shall be given to projects with a perpetual affordability commitment;
(2) Projects or units in projects that are
allocated low-income housing credits pursuant to the state housing credit
ceiling under section 42(h) of the Internal Revenue Code of 1986, as amended,
or projects or units in projects that are funded by programs of the United
States Department of Housing and Urban Development and United States Department
of Agriculture Rural Development [wherein:
(A) At least fifty per cent of the
available units are for persons and families with incomes at or below eighty
per cent of the median family income of which at least five per cent of the
available units are for persons and families with incomes at or below thirty
per cent of the median family income; and
(B) The remaining units are for persons
and families with incomes at or below one hundred per cent of the median family
income;
provided
that the corporation may establish rules to ensure full occupancy of fund
projects; and]; provided that paragraphs (1) and (2) shall apply to
awards up to the annual number of rental units that the corporation's most
recent Hawaii housing planning study forecasts are needed for persons and
families with incomes at fifty to sixty per cent of the area median income;
(3) Mixed-income [rental] projects
or units in a mixed‑income [rental] project [wherein all of the
available units are for persons and families with incomes at or below one
hundred forty per cent of the median family income.]; provided that this
paragraph shall apply to awards up to the annual number of rental units that
the corporation's most recent Hawaii housing planning study forecasts are
needed for persons and families with incomes at one hundred twenty to one
hundred forty per cent of the area median income; and
(4) Projects that are exclusively for qualified residents as defined in section 201H-32."
3. By amending subsection (g) to read:
"(g) The corporation shall submit an annual report
to the legislature no later than twenty days prior to the convening of each
regular session describing the projects funded and, with respect to [rental]
housing projects targeted for persons and families with incomes at or below
thirty per cent of the median family income, its efforts to develop those [rental]
housing projects, a description of proposals submitted for this target group
and action taken on the proposals, and any barriers to developing housing units
for this target group."
SECTION 7. Section 201H-204, Hawaii Revised Statutes, is amended to read as follows:
"[[]§201H-204[]]
Eligible projects. (a) Activities eligible for assistance from the
fund shall include but not be limited to:
(1) New construction, rehabilitation, or
preservation of low-income rental housing units [that meet the criteria for
eligibility described in subsection (c)];
(2) The leveraging of moneys with the use of fund assets;
(3) Pre-development activity grants or loans to nonprofit organizations; and
(4) Acquisition of housing units for the purpose of preservation as low-income or very low-income housing.
(b) [Preference shall be given to projects
producing units in at least one of the following categories:
(1) Multifamily units;
(2) Attached single-family units;
(3) Apartments;
(4) Townhouses;
(5) Housing units above commercial or
industrial space;
(6) Single room occupancy units;
(7) Accessory apartment units;
(8) Employee housing;
(9) United States Department of Housing
and Urban Development mixed finance development of public housing units; and
(10) Other types of units meeting the
criteria for eligibility set forth in subsection (c).]
The corporation shall establish an application process for fund allocation. Preference shall be given to projects meeting the following criteria:
(1) Multifamily units near stations of a locally preferred alternative of a mass transit project;
(2) State- or county-owned projects;
(3) Projects that are required to be conveyed to the State or a county at a definite time;
(4) Projects owned by organizations obliged to use all financial surplus generated by the projects to construct, manage, or rehabilitate owner- or renter‑occupied housing in the State;
(5) Projects with a perpetual affordability commitment;
(6) Projects of applicant developers who request loan terms no longer than five years; and
(7) Projects requiring the least amount of state funding per unit per year.
[(c) The corporation shall establish an
application process for fund allocation that gives preference to projects
meeting the following criteria that are listed in descending order of priority:
(1) Serve the original target group;
(2) Provide at least five per cent of
the total number of units for persons and families with incomes at or below
thirty per cent of the median family income;
(3) Provide the maximum number of units
for persons or families with incomes at or below eighty per cent of the median
family income;
(4) Are committed to serving the target
group over a longer period of time;
(5) Increase the integration of income
levels of the immediate community area;
(6) Meet the geographic needs of the
target group of the proposed rental housing project, such as proximity to
employment centers and services; and
(7) Have favorable past performance in
developing, owning, managing, or maintaining affordable rental housing.
The
corporation may include other criteria as it deems necessary to carry out the
purposes of this subpart.
If
the corporation, after applying the process described in this subsection, finds
a nonprofit project equally ranked with a for-profit or government project, the
corporation shall give preference to the nonprofit project in allotting fund
moneys.]"
SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 9. This Act shall take effect upon its approval.
Report Title:
HHFDC; RHRF; SHRF; Preference Criteria; Eligibility; Fund Allocation; Application Process; Preference; Priorities
Description:
Renames the Rental Housing Revolving Fund to the State Housing Revolving Fund (SHRF). Clarifies the prioritization of funds from the SHRF and eligible applicants of the SHRF. Amends the preference criteria and eligibility requirements for applicant developers seeking assistance from the SHRF. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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THE SENATE |
S.B. NO. |
71 |
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THIRTY-THIRD LEGISLATURE, 2025 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to the rental housing revolving fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 201H-204, Hawaii Revised Statutes, is amended to read as follows:
"[[]§201H-204[]] Eligible projects. (a)
Activities eligible for assistance from the fund shall include but not
be limited to:
(1) New construction, rehabilitation, or preservation of low-income rental housing units that meet the criteria for eligibility described in subsection (c);
(2) The leveraging of moneys with the use of fund assets;
(3) Pre-development activity grants or loans to nonprofit organizations; and
(4) Acquisition of housing units for the purpose of preservation as low-income or very low-income housing.
(b) Preference shall be given to projects [producing
units in at least one of the following categories:
(1) Multifamily units;
(2) Attached single-family units;
(3) Apartments;
(4) Townhouses;
(5) Housing units above commercial or
industrial space;
(6) Single room occupancy units;
(7) Accessory apartment units;
(8) Employee housing;
(9) United States Department of Housing
and Urban Development mixed finance development of public housing units; and
(10) Other types of units meeting the
criteria for eligibility set forth in subsection (c).]
meeting the following criteria:
(1) Multifamily units near stations of a locally preferred alternative of a mass transit project;
(2) State- or county-owned projects;
(3) Projects that are required to be conveyed to the State or a county at a definite time;
(4) Projects owned by an organization obliged to use all financial surplus generated by the project to construct, manage, or rehabilitate owner- or renter-occupied housing in the State;
(5) Projects with a perpetual affordability commitment; and
(6) Projects of applicant developers who request loan terms no longer than five years.
[(c) The corporation shall establish an
application process for fund allocation that gives preference to projects
meeting the following criteria that are listed in descending order of priority:
(1) Serve the original target group;
(2) Provide at least five per cent of
the total number of units for persons and families with incomes at or below
thirty per cent of the median family income;
(3) Provide the maximum number of units
for persons or families with incomes at or below eighty per cent of the median
family income;
(4) Are committed to serving the target
group over a longer period of time;
(5) Increase the integration of income
levels of the immediate community area;
(6) Meet the geographic needs of the
target group of the proposed rental housing project, such as proximity to
employment centers and services; and
(7) Have favorable past performance in
developing, owning, managing, or maintaining affordable rental housing.
The
corporation may include other criteria as it deems necessary to carry out the
purposes of this subpart.
If
the corporation, after applying the process described in this subsection, finds
a nonprofit project equally ranked with a for-profit or government project, the
corporation shall give preference to the nonprofit project in allotting fund
moneys.]" SECTION
2. Statutory material to be repealed is
bracketed and stricken. New statutory
material is underscored.
SECTION 3. This Act shall take effect upon its approval.
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INTRODUCED BY: |
_____________________________ |
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Report Title:
RHRF; Preference Criteria; Eligibility
Description:
Amends the preference criteria and eligibility requirements for applicant developers seeking assistance from the Rental Housing Revolving Fund.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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Date
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Status
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|---|---|
| Apr 2, 2026 | Received notice of the discharge of all House Conferees (Hse. Com. No. 457). |
| Apr 1, 2026 | House Conferee(s) discharged. |
| Mar 20, 2026 | Received notice of all Senate conferees being discharged (Sen. Com. No. 409). |
| Mar 20, 2026 | Senate Conferee(s) discharged. |
| Dec 8, 2025 | Carried over to 2026 Regular Session. |
| Apr 16, 2025 | Received notice of Senate conferees (Sen. Com. No. 809). |
| Apr 16, 2025 | Senate Conferees Appointed: Chang Chair; Hashimoto Co-Chair; Kanuha, Fevella. |
| Apr 15, 2025 | Received notice of appointment of House conferees (Hse. Com. No. 731). |
| Apr 14, 2025 | House Conferees Appointed: Evslin, Miyake Co-Chairs; Pierick. |
| Apr 8, 2025 | Received notice of disagreement (Sen. Com. No. 774). |
| Apr 8, 2025 | Senate disagrees with House amendments. |
| Apr 8, 2025 | Received from House (Hse. Com. No. 566). |
| Apr 4, 2025 | Passed Third Reading with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Kapela excused (2). Transmitted to Senate. |
| Apr 4, 2025 | Passed Second Reading; placed on the calendar for Third Reading with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Kapela excused (2). |
| Apr 4, 2025 | Reported from FIN (Stand. Com. Rep. No. 1951), recommending passage on Third Reading. |
| Apr 1, 2025 | The committee on FIN recommend that the measure be PASSED, UNAMENDED. The votes were as follows: 14 Ayes: Representative(s) Yamashita, Takenouchi, Grandinetti, Holt, Hussey, Keohokapu-Lee Loy, Kitagawa, Kusch, Lamosao, Lee, M., Miyake, Morikawa, Templo, Reyes Oda; Ayes with reservations: none; Noes: none; and 1 Excused: Representative(s) Alcos. |
| Mar 28, 2025 | Bill scheduled to be heard by FIN on Tuesday, 04-01-25 2:00PM in House conference room 308 VIA VIDEOCONFERENCE. |
| Mar 18, 2025 | Passed Second Reading as amended in HD 1 and referred to the committee(s) on FIN with none voting aye with reservations; Representative(s) Pierick voting no (1) and Representative(s) Cochran, Ward excused (2). |
| Mar 18, 2025 | Reported from HSG (Stand. Com. Rep. No. 1351) as amended in HD 1, recommending passage on Second Reading and referral to FIN. |
| Mar 14, 2025 | The committee on HSG recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 7 Ayes: Representative(s) Evslin, Miyake, Grandinetti, Kila, Kitagawa, La Chica, Muraoka; Ayes with reservations: none; 0 Noes: none; and 2 Excused: Representative(s) Cochran, Pierick. |
| Mar 11, 2025 | Bill scheduled to be heard by HSG on Friday, 03-14-25 9:00AM in House conference room 430 VIA VIDEOCONFERENCE. |
| Mar 6, 2025 | Referred to HSG, FIN, referral sheet 19 |
| Mar 6, 2025 | Pass First Reading |
| Mar 4, 2025 | Received from Senate (Sen. Com. No. 76) in amended form (SD 2). |
| Mar 4, 2025 | Report Adopted; Passed Third Reading, as amended (SD 2). Ayes, 25; Aye(s) with reservations: Senator(s) McKelvey, Moriwaki, San Buenaventura. Noes, 0 (none). Excused, 0 (none). Transmitted to House. |
| Feb 28, 2025 | 48 Hrs. Notice 03-04-25. |
| Feb 28, 2025 | Reported from WAM (Stand. Com. Rep. No. 916) with recommendation of passage on Third Reading, as amended (SD 2). |
| Feb 27, 2025 | The committee(s) on WAM recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in WAM were as follows: 13 Aye(s): Senator(s) Dela Cruz, Moriwaki, Aquino, DeCoite, Elefante, Hashimoto, Inouye, Kanuha, Kidani, Kim, Lee, C., Wakai, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 0 Excused: none. |
| Feb 21, 2025 | The committee(s) on WAM will hold a public decision making on 02-27-25 10:30AM; Conference Room 211 & Videoconference. |
| Feb 5, 2025 | Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM. |
| Feb 5, 2025 | Reported from HOU (Stand. Com. Rep. No. 29) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM. |
| Jan 28, 2025 | The committee(s) on HOU recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in HOU were as follows: 4 Aye(s): Senator(s) Chang, Aquino, Kanuha; Aye(s) with reservations: Senator(s) Hashimoto ; 0 No(es): none; and 1 Excused: Senator(s) Fevella. |
| Jan 22, 2025 | The committee(s) on HOU has scheduled a public hearing on 01-28-25 1:00PM; Conference Room 225 & Videoconference. |
| Jan 16, 2025 | Referred to HOU, WAM. |
| Jan 15, 2025 | Introduced and passed First Reading. |
| Jan 8, 2025 | Pending Introduction. |
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Date
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Description
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Location
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Votes
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| Apr 4, 2025 | Third Reading | House Floor |
Passed |
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| Apr 1, 2025 | The committee on FIN recommend that the measure be PASSED, UNAMENDED | House Standing Committee on Finance |
Passed |
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| Mar 14, 2025 | The committee on HSG recommend that the measure be PASSED, WITH AMENDMENTS | House Standing Committee on Housing |
Passed |
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| Mar 4, 2025 | Third Reading | Senate Floor |
Passed |
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| Feb 27, 2025 | The committee(s) on WAM recommend(s) that the measure be PASSED, WITH AMENDMENTS | Senate Standing Committee on Ways and Means |
Passed |
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| Jan 28, 2025 | The committee(s) on HOU recommend(s) that the measure be PASSED, WITH AMENDMENTS | Senate Standing Committee on Housing |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
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Organization
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Position
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Date
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| Catholic Charities Hawaiʻi | ** Support | |
| Church of the Crossroads | ** Support | |
| Hawaii Housing Finance and Development Corporation | ** Support | |
| Hawaii Public Housing Authority | ** Support | |
| Hawaiʻi Community Foundation | ** Support | |
| Hawaiʻi Gas | ** Support | |
| Hawaiʻi YIMBY | ** Support | |
| Holomua Collaborative | ** Support | |
| HPM BUILDING SUPPLY | ** Support | |
| Mana Up | ** Support | |
| Maui Chamber of Commerce | ** Support | |
| NAIOP Hawaii and Catholic Charities Hawaiʻi | ** Against | |
| Title Guaranty of Hawaiʻi | ** Support | |
| Tori Richard, Ltd. | ** Support |
STAND. COM. REP. NO. 1951
Honolulu, Hawaii
, 2025
RE: S.B. No. 71
S.D. 2
H.D. 1
Honorable Nadine K. Nakamura
Speaker, House of Representatives
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Madame:
Your Committee on Finance, to which was referred S.B. No. 71, S.D. 2, H.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO THE RENTAL HOUSING REVOLVING FUND,"
begs leave to report as follows:
The purpose of this measure is to:
(1) Clarify the prioritization of, and eligibility and preference criteria for, projects that may be funded by the Rental Housing Revolving Fund;
(2) Establish the Mixed-Income Subaccount within the Rental Housing Revolving Fund to make loans for the development of workforce rental housing projects or units intended for persons and families with incomes at or below one hundred forty percent of the area median income; and
(3) Appropriate funds into and out of the Mixed-Income Subaccount of the Rental Housing Revolving Fund.
Your Committee received testimony in support of this measure from the Hawaii Housing Finance and Development Corporation; Hawaii Public Housing Authority; Catholic Charities Hawaiʻi; Hawaiʻi Community Foundation; Holomua Collaborative; Title Guaranty of Hawaiʻi; HPM Building Supply; Hawaiʻi Gas; Mana Up; Tori Richard, Ltd.; Hawaiʻi YIMBY; and Maui Chamber of Commerce. Your Committee received comments on this measure from the Department of Budget and Finance and NAIOP Hawaii.
As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 71, S.D. 2, H.D. 1, and recommends that it pass Third Reading.
Respectfully submitted on behalf of the members of the Committee on Finance,
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____________________________ KYLE T. YAMASHITA, Chair |
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STAND. COM. REP. NO. 1351
Honolulu, Hawaii
, 2025
RE: S.B. No. 71
S.D. 2
H.D. 1
Honorable Nadine K. Nakamura
Speaker, House of Representatives
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Madame:
Your Committee on Housing, to which was referred S.B. No. 71, S.D. 2, entitled:
"A BILL FOR AN ACT RELATING TO THE RENTAL HOUSING REVOLVING FUND,"
begs leave to report as follows:
The purpose of this measure is to:
(1) Rename the Rental Housing Revolving Fund to the State Housing Revolving Fund;
(2) Clarify the prioritization of, and eligibility and preference criteria for, projects that may be funded by, State Housing Revolving Fund monies; and
(3) Require the Hawaii Housing Finance and Development Corporation to establish an application process for fund allocation.
Your Committee received testimony in support of this measure from the Hawaii Public Housing Authority; Church of the Crossroads; and three individuals. Your Committee received testimony in opposition to this measure from Catholic Charities Hawaiʻi; Hawaii Appleseed Center for Law & Economic Justice; NAIOP Hawaii; and one individual. Your Committee received comments on this measure from the Hawaii Housing Finance and Development Corporation; Hawaiʻi YIMBY; and Holomua Collaborative.
Your Committee finds that, as currently drafted, this measure would significantly reduce critical funding sources for the Rental Housing Revolving Fund, threatening the viability of deeply affordable housing projects that serve households making thirty percent of the area median income, many of whom are on the verge of homelessness. These cuts would severely limit the State's ability to provide stable housing for its most vulnerable residents, increasing the risk of displacement and homelessness. Your Committee believes that ensuring continued investment in affordable housing is essential to keeping residents in secure environments that foster stability and economic mobility.
Your Committee further finds that this measure would disproportionately benefit high-income householdsthose earning between one hundred twenty percent and one hundred forty percent of the area median incomewhile failing to address the pressing housing needs of those earning between thirty percent and one hundred twenty percent of the area median income. The current structure of this measure would not only neglect those most in need but would also deepen disparities in housing availability, exacerbating the challenges faced by low- and moderate-income families.
Your Committee has reaffirmed its position regarding the Rental Housing Revolving Fund through H.B. No. 432, H.D. 1, a measure previously passed by the House that:
(1) Establishes the Mixed-Income Subaccount within the Rental Housing Revolving Fund that targets workforce rental housing projects for persons and families with incomes at or below one hundred forty percent of the area median income;
(2) Authorizes the Director of Finance to transfer funds from the Rental Housing Revolving Fund into the Mixed-Income Subaccount;
(3) Appropriates funds into and out of the Mixed-Income Subaccount; and
(4) Takes effect on July 1, 3000.
Your Committee believes that H.B. 432, H.D. 1, offers a more effective solution to address the State's ongoing housing crisis and best leverage the financing potential of the Rental Housing Revolving Fund by supporting individuals and families who earn too much to qualify for traditional forms of assistance, but not enough to purchase a house at market value, such as essential workers such as teachers, first responders, and those in blue‑collar professions.
Accordingly, your Committee has amended this measure by:
(1) Deleting its contents and inserting the contents of H.B. No. 432, H.D. 1; and
(2) Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.
Your Committee respectfully requests your Committee on Finance, should it deliberate on this measure, to consider an appropriation amount of $75,000,000 for each year of the fiscal biennium.
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. 71, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 71, S.D. 2, H.D. 1, and be referred to your Committee on Finance.
Respectfully submitted on behalf of the members of the Committee on Housing,
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____________________________ LUKE A. EVSLIN, Chair |
STAND. COM. REP. NO. 916
Honolulu, Hawaii
RE: S.B. No. 71
S.D. 2
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Sir:
Your Committee on Ways and Means, to which was referred S.B. No. 71, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO THE RENTAL HOUSING REVOLVING FUND,"
begs leave to report as follows:
The purpose and intent of this measure is to increase the supply of affordable housing in the State.
Specifically, this measure:
(1) Renames the rental housing revolving fund as the state housing revolving fund; and
(2) Clarifies the prioritization of, and eligibility and preference criteria for, projects that may be funded by state housing revolving fund moneys.
Your Committee received written comments in support of this measure from the Hawaii Public Housing Authority and one individual.
Your Committee received written comments in opposition to this measure from NAIOP Hawaii Chapter and Catholic Charities Hawai`i.
Your Committee received written comments on this measure from the Hawaii Housing Finance and Development Corporation.
Your Committee finds that although the rental housing revolving fund finances approximately half of all affordable housing production statewide, much of this housing is not being constructed for the market segments in which demand for affordable housing is greatest. Accordingly, your Committee finds that it is appropriate to prioritize expenditures from the revolving fund to more closely match housing demand.
Your Committee has amended this measure by:
(1) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and
(2) Making technical nonsubstantive amendments for purposes of clarity, consistency, and style.
As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 71, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 71, S.D. 2.
Respectfully submitted on behalf of the members of the Committee on Ways and Means,
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________________________________ DONOVAN M. DELA CRUZ, Chair |
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STAND. COM. REP. NO. 29
Honolulu, Hawaii
RE: S.B. No. 71
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. 71 entitled:
"A BILL FOR AN ACT RELATING TO THE RENTAL HOUSING REVOLVING FUND,"
begs leave to report as follows:
The purpose and intent of this measure is to amend the preference criteria and eligibility requirements for applicant developers seeking assistance from the Rental Housing Revolving Fund.
Your Committee received testimony in support of this measure from the Hawaii Public Housing Authority.
Your Committee received testimony in opposition to this measure from NAIOP Hawaii and Catholic Charities Hawaiʻi.
Your Committee received comments on this measure from the Hawaii Housing Finance and Development Corporation and one individual.
Your Committee finds that the Rental Housing Revolving Fund (RHRF) was established to provide loans for the development, pre‑development, construction, acquisition, preservation, and substantial rehabilitation of rental housing units. As the principal agency responsible for administering the RHRF, the Hawaii Housing Finance and Development Corporation (HHFDC) has utilized an application process that establishes preferences for certain housing projects. However, as the unique housing demands statewide have evolved, clarifying the priorities of eligible housing projects will help HHFDC to produce more housing units to alleviate the existing housing shortage and prioritize categories in high demand.
However, your Committee notes that the RHRF has been producing housing units with extreme inefficiency, spending approximately $200,000 per unit, typically to be repaid at only 0.15 percent interest over fifty-seven years. Additionally, your Committee finds that as housing projects financed by the RHRF are only required to be classified as affordable for up to sixty-one years, developers may then start charging market rate rents, displacing thousands of families. To ensure tenant stability after the affordability commitment period ends, the State must purchase buildings it previously helped fund, forcing taxpayers to pay for the same development twice. Additionally, recent studies have forecasted that far more units are needed to meet demand than what is currently being produced by the State, especially ownership housing for families earning one hundred twenty to one hundred forty percent of the area median income.
Accordingly, as Hawaii's housing shortage impacts families representing a wide range of household incomes, including demand for additional rental and ownership units, reorganizing the RHRF to better address the needs of the State's residents will help alleviate the strain on the existing market while ensuring residents have options to remain in the State. Amendments to this measure are therefore necessary to ensure this flexibility and to prioritize the production of various categories of housing to best meet demands.
Therefore, your Committee has amended this measure by:
(1) Inserting language to amend the title of the Rental Housing Revolving Fund to the State Housing Revolving Fund;
(2) Amending references to the Rental Housing Revolving Fund to the State Housing Revolving Fund;
(3) Repealing the definitions of "efficiency", "feasibility", and "project readiness" relating to the Rental Housing Revolving Fund;
(4) Clarifying that the State Housing Revolving Fund shall be for housing projects, including ownership units rather than only rental housing;
(5) Establishing a tiered system for the prioritization of moneys in the State Housing Revolving fund that:
(A) Provides that certain projects that are allocated low-income housing tax credits, or projects or units funded by the United States Department of Housing and Urban Development, and United States Department of Agriculture Rural Development, shall apply to awards up to the annual number of rental units that HHFDC's most recent Hawaii Housing Planning Study forecasts are needed for persons and families with incomes at fifty to sixty percent of the area median income;
(B) Provides that mixed-income projects or units in a mixed-income project shall apply to awards up to the annual number of rental units that HHFDC's most recent Hawaii Housing Planning Study forecasts are needed for persons and families with incomes at one hundred twenty to one hundred forty percent of the area median income; and
(C) Adds a priority for projects that are exclusively for qualified residents as defined in section 201H‑32, Hawaii Revised Statutes;
(6) Inserting language to require HHFDC to establish an application process for, State Housing Revolving Fund allocation;
(7) Adding a preference criteria for fund allocation that prioritizes projects requiring the least amount of state funding per unit per year;
(8) Inserting legislative findings; and
(9) 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. 71, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 71, 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 |
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Discussed in Hearing
53SEC
House Standing Committee on Finance
6MIN
House Standing Committee on Housing
30SEC
Senate Floor
5MIN
Senate Standing Committee on Housing
Bill Author
