SB 749: RELATING TO HOUSING.

A BILL FOR AN ACT

RELATING TO HOUSING.

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

     SECTION 1.  The legislature finds that the State is facing a critical shortage of affordable housing, with rising rental costs placing a severe burden on low-income individuals and families.  This housing crisis threatens the stability and well-being of many residents, particularly vulnerable populations such as seniors, low-income workers, and families with children.  To address this ongoing issue, the State must adopt stronger measures to ensure that affordable rental units are available and preserved for those in need. 

     The legislature further finds that other states have successfully implemented policies to increase and sustain affordable housing availability.  For example, New York City's mandatory inclusionary housing program requires that a portion of units in new developments be permanently affordable, ensuring long-term housing equity and access for low-income residents.  Similarly, California's low-income housing tax credit program mandates affordability requirements for a minimum of fifty-five years, creating a lasting impact on housing availability for underserved populations.  These programs demonstrate the viability and necessity of long-term affordability requirements and establish precedent for the State to adopt similar measures. 

     The legislature recognizes that increasing the required percentage of affordable units in rental housing projects supported by the Hawaii housing finance and development corporation (HHFDC) aligns with successful policies in other states and reflects a commitment to equitable housing development.  The legislature finds that it is critical for the State to take meaningful steps to address its housing crisis and ensure that public resources dedicated to housing development benefit those most in need. 

     Accordingly, the purpose of this Act is to increase the supply of affordable rental housing in the State by requiring that rental housing projects maintain in perpetuity at least fifty per cent, rather than the current twenty per cent, of their units for certain low-income tenants to receive assistance under HHFDC's rental assistance program.  This measure will promote housing equity, ensure long-term affordability, and align the State with other states with proven practices to address the housing needs of its residents. 

     SECTION 2.  Section 201H-122, Hawaii Revised Statutes, is amended by amending the definition of "eligible project" to read as follows:

     ""Eligible project" means a rental housing project that:

     (1)  Is financed by the corporation pursuant to subpart B or D, or that the corporation determines will require rental assistance to make it financially feasible;

     (2)  Is subject to a regulatory agreement with the corporation;

     (3)  Maintains in perpetuity at least [twenty] fifty per cent of its units for eligible tenants; and

     (4)  Meets other qualifications as established by rules adopted by the corporation.

     Notwithstanding any provision to the contrary, "eligible project" may also include a rental housing project that is financed by the corporation pursuant to subpart A."

     SECTION 3.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

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

     SECTION 5.  This Act shall take effect upon its approval.

Report Title:

HHFDC; Rental Assistance Program; Reserve Percentage

Description:

Requires rental housing projects to maintain, in perpetuity, fifty per cent of the project's units for certain low-income tenants to be eligible for assistance under the Hawaii Housing Finance and Development Corporation's rental assistance program.

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. 134

Honolulu, Hawaii

RE:    S.B. No. 749

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. 749 entitled:

"A BILL FOR AN ACT RELATING TO HOUSING,"

begs leave to report as follows:

     The purpose and intent of this measure is to require rental housing projects to maintain, in perpetuity, fifty percent of the project's units for certain low-income tenants to be eligible for assistance under the Hawaii Housing Finance and Development Corporation's (HHFDC) Rental Assistance Program.

     Your Committee received testimony in support of this measure from the Office of Hawaiian Affairs.

     Your Committee received comments on this measure from the Hawaii Housing Finance and Development Corporation.

     Your Committee finds that HHFDC's Rental Assistance Program offers assistance to eligible low-income tenants.  However, existing law only requires the maintenance, in perpetuity, of twenty percent of units in rental housing projects for low-income tenants, creating a demand that exceeds inventory.  Accordingly, this measure expands the available inventory for low-income tenants to ensure that households eligible for the Rental Assistance Program can secure housing.

     Your Committee notes the testimony of HHFDC regarding the amount of state of funds necessary to support this expansion of the Rental Assistance Program.  As the Rental Assistance Program has not been funded in several years, HHFDC will require a substantial infusion of funds to maintain and administer the Program and to incentivize developers to participate.

     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. 749 and recommends that it pass Second Reading and be referred to your Committee on Ways and Means.

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