STAND. COM. REP. NO. 591

Honolulu, Hawaii

, 2005

RE: S.B. No. 798

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 798 entitled:

"A BILL FOR AN ACT RELATING TO AFFORDABLE HOUSING,"

begs leave to report as follows:

The purpose of this measure is to facilitate the development of affordable housing in Hawaii through various strategies, including expanding the use of and prohibiting the raiding of special housing funds, streamlining the approval process, increasing conveyance tax allocations to the Rental Housing Trust Fund, and modifying standards for affordable housing projects.

Testimony in support of this measure was received from the Office of the Governor, Department of Taxation, Housing and Community Development Corporation of Hawaii, Department of Community Services of the City and County of Honolulu, Pacific Housing Assistance Corporation, The Nature Conservancy, Hawaii Association of Realtors, and The Affordable Housing and Homeless Alliance. The University of Hawaii and Life of the Land opposed the measure. The Land Use Research Foundation presented comments.

This measure establishes the Affordable Homes Act of 2005. Among other things, the Act:

(1) Prohibits the raid of eight special housing funds;

(2) Abolishes the Rental Housing Trust Fund Advisory Commission to avoid duplication in the review process for housing development applications;

(3) Exempts from Land Use Commission approval affordable housing projects of fifty acres or less;

(4) Changes the standard for an affordable housing project from one that requires the project to be primarily designed for lower income persons to one that requires the project provide a reasonable number of lower income housing units;

(5) Permits the Dwelling Unit Revolving Fund to be used for permanent financing, in addition to interim financing; and

(6) Permits for-profit entities to quality for loans from the Rental Housing Trust Fund.

Your Committee has amended this measure:

(1) To expand the time frame for completion of an affordable housing project claiming an exemption from general excise taxes, by extending the outside "start of construction" date from December 31, 2006 to June 30, 2007, and by extending the "completion" date from December 31, 2007 to June 30, 2009;

(2) By amending the definition of "affordable housing units" to delete references to unit size specifications;

(3) By amending the proposed standard for an affordable housing project from one that considers whether the project provides a "reasonable number" of lower income housing units to one that considers whether a project provides a certain percentage of lower income housing units;

(4) With respect to the requirements for projects receiving preference under the Rental Housing Trust Fund Program, by removing specific percentages relating to:

(A) The total number of units the project must provide for persons with incomes at or below thirty per cent of the median family income; and

(B) The threshold median family income applicable to the requirement for the provision of the maximum number of units; and

(5) By making technical amendments to reflect preferred drafting style and to correctly reflect the language of the Hawaii Revised Statutes.

Additionally, in order to facilitate further discussion and review of the issues raised in this measure, your Committee has inserted therein an effective date of July 1, 2050.

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. 798, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 798, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Housing,

____________________________

RON MENOR, Chair