Senate Standing Committee on Housing

Good afternoon. It's 1:25 p.m.—this is the Committee on Housing 1:25 p.m. hearing here in Conference Room 225. This meeting is being streamed live on YouTube. In the unlikely event that we have to abruptly end this meeting—hearing—due to technical difficulties, the Committee will reconvene to discuss any outstanding business on Tuesday, March 18, 2025, in this room, two to five at 1pm, and a public notice will be posted on the Legislature's website.

We will have a one-minute per testifier time limit. If there are temporary technical glitches during your turn to testify via Zoom, we may have to move on to the next person due to time constraints.

Time Constraints. We appreciate your understanding and remind you that the Committee has your written testimony. Our first Bill today is HB 1428, relating to housing, which appropriates funds for HHFTC to allocate to housing counseling agencies, certified by the U.S. Department of Housing and Urban Development, to provide housing counseling services. It requires a report to the Legislature. Our first testifier is HHFTC, in support.

Good afternoon, Chair and report. We stand more testimony and support.

Thank you. Followed by County of Hawaii Office of Housing and Community Development, followed by Agatha Joyce Samarin in support.

Good afternoon. Good afternoon, Chair Chang and Members of the Senate Committee on Housing. My name is Aj Samorin, a graduate student at the University of Hawaii, Manoa, pursuing my master's in social work. I would like to note that my stance is solely a reflection of my own beliefs, and not of the organization or school I attend.

Thank you for giving me the chance to speak in favor of House Bill 1428. I'd like to say that houselessness continues to be a prevalent issue in Hawaii. But the ever-increasing cost of housing and lack of services aim to support vulnerable populations.

It saddens me, growing up on the island, to see the housing crisis worsen throughout the years, and I urge the community's support for House Bill 1428 HD1, and I thank you for allowing me the opportunity to speak in favor of it.

Thank you. Next, we have Janae Wong in support.

Aloha, Chair, Vice Chair, and Committee Members. My name is Janae, and I'm a graduate student at the University of Hawaii at Manoa. I'm expressing this testimony as my own and does not necessarily reflect the school.

I am testifying in support of HB 1428 HD1, and I believe our community can benefit from financial education, one-on-one guidance, counseling, and effective interventions that support them to remain housed. Thank you for the opportunity to testify.

Thank you very much. Is there anyone else wishing to testify on HB 1428? If not, I'd like to welcome Vice Chair Hashimoto and Senator Aquino to this meeting. Are there any questions? Okay, I just have a question for HHFDC: how much funding should be appropriated to these housing counseling agencies?

I'll note that there are five HUD-certified housing counseling agencies in the state. We reached out to three of them, and based on our discussions, we would request that $1.5 million be appropriated. That's the amount that we feel that they could use in one year.

We also note that these housing counseling agencies rely on federal funds to provide their current services. And, with the current uncertainties surrounding federal funding, there is a chance that they could lose that source of funds.

Okay, thank you very much. We'll move on to our next bill, which is HB833 relating to community Land trusts. It authorizes HHFTC to establish a five year Community Land Trust Equity Pilot Program to provide community land trusts with a line of credit to Fund the acquisition, rehabilitation, renovation or construction of housing for certain households.

Requires reports in the Legislature and appropriates funds from dwelling unit revolving Fund. Our first testifier is HHFTC in support. Next we have County of Hawaii Office of Housing and Community Development and Support, Kohala Community Land Trust and Support Council for Native Hawaiian Advancement and Support, Maui Chamber of Commerce in support. Justin Huey in support.

And Autumn Ness in support. Is there anyone else wishing to testify on this measure? Okay. If not Members, are there any questions? Okay. Chair has a question for hhfdc. How much money is needed for this measure?

That really depends on how many homes that would like to be part of the. Of the pilot. Say there were 50 homes. At an average loan amount of $500,000. That would be $25 million. So it depends on how large this pilot would be.

How long would it take to have those funds repaid to hhsdc?

We'd have to work with organizations to see how they're going to structure their loan process. I'm thinking that the state would provide construction loans which would be paid back upon permanent conversion.

So when they're using the funds to acquire a property or to rehab the property and to build something, when they sell it to a qualified buyer, that buyer can pay back HHFDC's funds through their mortgage.

Okay, so that would revolve within three to five years?

Yes.

Okay. I mean, the Chair will just note that $500,000 per unit in taxpayer subsidies is a very lavish subsidy for these 50 lucky lottery winners.

Yes. And it would be for. We anticipate interim financing.

Okay. So that would make it a little fairer. Thank you. Further questions. Thank you very much. Our last Bill today is HB 286 related to the Individual Housing Account Program increases the maximum annual deduction for contributions to and maximum account levels for individual housing accounts. Our first testifier is Department of Taxation with comments. Thank you.

Tax foundation of Hawaii with comments not present on Zoom Chair. Thank you. Maui Chamber of Commerce and support and several individuals in support. Andrew Crossland, Judy Ilar, Luella Vidino, Chanara K. Richmond, Glenn Kagamita, Jacob Weinsek and also Susan Wattis in opposition. Is there anyone else wishing to testify on HB286, if not Members? Any questions?

The Chair just has a question for DOTAX. Thank you. Can you please identify yourself?

Hi, my name is Eliza. I'm from the Department of Taxation.

Okay. How much should the maximum annual deductions be raised to you?

That would be a policy question. However, if we look at the Roth IRA, the maximum deduction is 7,000. So if it was. And Roth IRA can be used for a first home buyer for a purchase of a first home. So it should be more than 7,000 to have an impact.

So really the IHA would only be used by taxpayers who have already maxed out their Roth annual contribution limit because the federal tax burden would be bigger. Federal tax savings would be greater than the state tax savings of IHA. Right.

And currently there's less than 100 IHAs that that has been reported in my notes from our research.

Okay, thank you.

Yeah.

Thank you.

Okay. Further questions. Okay. We'd also like to welcome Senator Kanuha. Okay. That brings us to the end of our agenda. We'll go straight into decision making. That's all right. Numbers. So our first bill today is HB 1428 relating to housing. Chair's recommendation will be to pass with amendments to further defect.

The date and the Committee report will note HHFTC's 1.5 $1.0 million request for appropriations.

The Chair also wants to note in the Committee report that home ownership was within reach for most Hawaii residents in the 1950s and 60s, not because of their greater participation in housing counseling services, but because the price of housing was much lower than relative to incomes. Any discussion? Questions? Okay. If not again for HB 1428.

Chair's recommendation is to pass with amendments.

[Roll call]

For HB 833 relating to community Land Trust, the Chair's recommendation will again to be to pass with amendments in section 2A to replace the income restriction with qualified residents as defined by HRS 201H32. Also prioritizing applications requiring the lowest amount of funds per unit per year and further defecting the date.

Further, in the Committee report, we'll note the the 25 $1.0 million appropriation request for 50 units at an average cost of $500,000. To note the extremely high cost and therefore the necessity to revolve the funds rapidly to ensure a sustainable continuous pipeline of housing construction. Members, any discussion? Okay.

If not HB833 chairs recommendation is to pass with amendments.

[Roll call]

Thank you. And then finally, HB 286 relating to the Individual Housing Account Program. Chair's recommendation will be to pass with this measure with amendments with technical, non substantive amendments.

For the purposes of clarity and consistency, we'll also further defect the date and note in the Committee report the change to $10,000 for a single filer and $20,000 for married filing jointly. Discussion? Okay. If not for HB 286.

[Roll call]

Thank you very much. There being no further business, this hearing is adjourned.