STAND. COM. REP. NO.2521
RE: S.B. No. 2708
Honorable Robert Bunda
President of the Senate
Twenty-First State Legislature
Regular Session of 2002
State of Hawaii
Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 2708 entitled:
"A BILL FOR AN ACT RELATING TO THE HOUSING AND COMMUNITY DEVELOPMENT CORPORATION OF HAWAII,"
begs leave to report as follows:
The purpose of this measure is to authorize the Housing and Community Development Corporation of Hawaii (HCDCH) to waive the three-year buyback requirement for the sale of affordable housing.
The HCDCH testified in support of this measure.
In order to prevent speculative investment and preserve affordable housing, homeowners of affordable units in government-sponsored housing projects are prohibited from selling their homes on the open market for a specific number of years during which time the HCDCH retains the first option to buy back the property. Originally the buyback period was ten years, but when the residential market began to stabilize in the early to mid-1990s, resulting in the sale of market-priced homes at prices comparable to those of affordable homes, the legislature reduced the length of the buyback period.
Finding that the ten-year restriction was hindering the resale of affordable units by homeowners facing financial hardship and a developer's ability to compete in the residential market, the legislature in Act 272, Session Laws of Hawaii 1998, reduced the buyback period to three years and provided that the period would revert back to ten years on December 31, 2000. Act 99, Session Laws of Hawaii 2001 (Regular Session), reestablished the three-year buyback period for another three and one-half years and provided for the law to revert back to the ten-year restriction period on December 31, 2004.
Your Committee finds that current market and economic conditions reduce the risk of speculation in the housing market. Therefore, this measure allows the HCDCH to waive the three-year buyback provision to allow the developers of affordable housing projects to compete on more equal footing with the developers of market-priced homes. Additionally, on December 31, 2004, the buyback period will revert back to ten years and HCDCH's waiver authority is repealed.
Your Committee has amended this measure by conforming its effective date to the effective date of Act 99, Session Laws of Hawaii 2001 (Regular Session), and making other technical changes to reflect preferred drafting style and to correctly reflect language in the Hawaii Revised Statutes.
As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2708, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2708, S.D. 1, and be placed on the calendar for Third Reading.
Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection and Housing,
RON MENOR, Chair