TWENTY-SEVENTH LEGISLATURE, 2014
STATE OF HAWAII
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 affordable housing is a serious concern for many Hawaii residents. According to the 2011 Hawaii housing planning study, up to fifty thousand new housing units will need to be built by 2016 to meet the new demand generated by changing demographics and economic conditions. Failure to produce sufficient units for low- and moderate-income households will cause pent-up demand in these market segments.
The purpose of this Act is to address growing housing needs by:
(1) Facilitating discussion between appropriate State and county agencies regarding the potential impacts of the rail transit system as it relates to population growth and housing development;
(2) Facilitating affordable housing construction near rail transit system station locations through the granting of general excise tax incentives for affordable housing development in mixed-use project areas; and
(3) Providing funds to address affordable housing needs through the construction of micro apartment housing units.
SECTION 2. The legislature finds that demand for and distribution of housing may be tied directly to the rail transit system. Housing needs and distribution patterns, especially as they relate to workforce housing, may change drastically as working individuals take advantage of the reduction in commute time and cost that can result from living in more affordable housing markets near rail transit stations. As lands surrounding these rail transit stations are developed and the impact of rail transit begins to be felt on population distributions, it is important to analyze and monitor the effect that transit and related development has on surrounding communities, especially in terms of housing needs.
SECTION 3. (a) All state agencies owning properties or facilities within a one-half mile radius of each proposed rail transit station shall enter into a memorandum of understanding with the department of business, economic development, and tourism to determine how the transit station and related development will effect and address the State's population growth and changing distribution by, among other things, meeting the demand for workforce housing; provided that the memorandum of understanding shall not replace or conflict with any regulatory function.
(b) Each memorandum of understanding shall require the convening of a working group that includes representatives of the department of planning and permitting of the city and county of Honolulu, the Honolulu authority for rapid transportation, other relevant county agencies, and each participating state agency.
(c) The state agency owning the most land within a one mile radius from the proposed rail transit station shall designate a representative to serve as the initial chairperson and coordinator of the working group.
(d) No later than twenty days prior to the convening of each regular session, each working group shall submit an annual report to the legislature on how the proposed rail transit station and related development will effect and address the State's population growth and changing distribution by, among other things, meeting housing demands. This report shall include information on the relationship among housing needs, transit infrastructure, and economic growth, including:
(1) How the rail transit station and related development will help address the State's population growth and changing distribution patterns by meeting workforce housing demands and contributing to transit ridership;
(2) How the transit station and related development may affect housing needs through economic growth including the potential economic diversification of the surrounding community; and
(3) How changing population distribution will affect the establishment of a new population center outside of central Honolulu.
(e) Each working group shall be dissolved upon completion of the rail transit project.
(f) For the purposes of this Act, "proposed rail transit station" means a station at each of the following proposed Honolulu rail transit station locations:
(1) East Kapolei;
(2) University of Hawaii, West Oahu;
(3) Leeward community college;
(4) Aloha stadium;
(5) Honolulu International Airport;
(6) Lagoon drive;
(7) Kalihi; and
SECTION 4. The legislature finds that plans for the existence of transit stations and amenities commonly found in transit-oriented developments generally increase nearby land and housing values. Market forces have historically failed to generate affordable housing in close proximity to existing transit hubs in accordance with the core principles of transit-oriented development, making it incumbent upon government to intervene where market forces fail to create the desired solution.
The core principles of transit-oriented development expressly require that affordable housing units be located in close proximity to transit stations and consist of high-density vertical housing to ensure that the greatest number of potential riders can be served by the transit system.
SECTION 5. Chapter 201H, Hawaii Revised Statutes, is amended by adding a new section to part II to be appropriately designated and to read as follows:
"§201H- Location-efficient mixed-use projects. (a) The corporation may develop, on behalf of the State or with any qualified person or firm, a mixed-use project within a location-efficient area.
(b) The corporation may approve and certify any qualified person or firm who is involved in the development of affordable housing in a newly constructed, or moderately or substantially rehabilitated, mixed-use project within a location-efficient area for purposes of receiving the general excise tax exemption authorized pursuant to sections 201H-36 and 237-29 in taxable years beginning after December 31, 2015.
(c) All claims under this section shall be filed with, and certified by, the corporation and forwarded to the department of taxation. Any claim that is filed with and approved by the department of taxation shall not be considered a subsidy for the purposes of this part.
(d) For the purposes of this section:
"Location-efficient area" means one or more contiguous parcels of land aggregating five or more acres that are owned by the State or county, one parcel of which is located within half a mile of a rail transit station.
"Mixed-use project" means a project that:
(1) Is located in a location-efficient area;
(2) Contains affordable multifamily residential dwelling units that may be combined with commercial, cultural, institutional, or industrial uses;
(3) Is approved by the county in which the project is located; and
(4) Is subject to chapter 104; 40 United States Code sections 3141, 3142, 3143, 3144, 3146, and 3147; or a project labor agreement by law or contract in the construction of the project.
(e) The corporation may establish, revise, charge, and collect a reasonable service fee, as necessary, in connection with its approvals and certifications under this section. Any fees collected shall be deposited into the dwelling unit revolving fund.
(f) The corporation, in consultation with the department of taxation, shall adopt rules, pursuant to chapter 91, for the purposes of this section requiring that:
(1) Any certification or approval of a general excise tax exemption for a qualified person or firm involved in the development of a mixed-use project pursuant to this section shall apply to the development of the entire mixed-use project;
(2) Cost savings from a general excise tax exemption granted to a qualified person or firm for the development of a mixed-use project pursuant to this section shall be used exclusively to provide affordable rental housing units, including student and faculty housing units, within the project; and
(3) Affordable rental housing units developed pursuant to this section shall serve as many low income households as feasible."
SECTION 6. Section 46-15.1, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Any law to the contrary notwithstanding, any county shall have and may exercise the same powers, subject to applicable limitations, as those granted the Hawaii housing finance and development corporation pursuant to chapter 201H insofar as those powers may be reasonably construed to be exercisable by a county for the purpose of developing, constructing, and providing low- and moderate-income housing; provided that no county shall be empowered to cause the State to issue general obligation bonds to finance a project pursuant to this section; provided further that county projects shall be granted an exemption from general excise or receipts taxes in the same manner as projects of the Hawaii housing finance and development corporation pursuant to section 201H-36; provided that no county shall certify an exemption pursuant to section 201H-36 for a mixed-use project under section 201H- ; and provided further that section 201H-16 shall not apply to this section unless federal guidelines specifically provide local governments with that authorization and the authorization does not conflict with any state laws. The powers shall include the power, subject to applicable limitations, to:
(1) Develop and construct dwelling units, alone or in partnership with developers;
(2) Acquire necessary land by lease, purchase, exchange, or eminent domain;
(3) Provide assistance and aid to a public agency or other person in developing and constructing new housing and rehabilitating existing housing for elders of low- and moderate-income, other persons of low- and moderate-income, and persons displaced by any governmental action, by making long-term mortgage or interim construction loans available;
(4) Contract with any eligible bidders to provide for construction of urgently needed housing for persons of low- and moderate-income;
(5) Guarantee the top twenty-five per cent of the principal balance of real property mortgage loans, plus interest thereon, made to qualified borrowers by qualified lenders;
(6) Enter into mortgage guarantee agreements with appropriate officials of any agency or instrumentality of the United States to induce those officials to commit to insure or to insure mortgages under the National Housing Act, as amended;
(7) Make a direct loan to any qualified buyer for the downpayment required by a private lender to be made by the borrower as a condition of obtaining a loan from the private lender in the purchase of residential property;
(8) Provide funds for a share, not to exceed fifty per cent, of the principal amount of a loan made to a qualified borrower by a private lender who is unable otherwise to lend the borrower sufficient funds at reasonable rates in the purchase of residential property; and
(9) Sell or lease completed dwelling units.
For purposes of this section, a limitation is applicable to the extent that it may reasonably be construed to apply to a county."
SECTION 7. Section 237-8.6, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
"(d) No county surcharge on state tax shall be established on any:
(1) Gross income or gross proceeds taxable under this chapter at the one-half per cent tax rate;
(2) Gross income or gross proceeds taxable under this chapter at the 0.15 per cent tax rate; or
Transactions, amounts, persons, gross income, or gross proceeds exempt from tax
under this chapter[
.], except those that are exempt under section
237-29 pursuant to section 201H- ."
SECTION 8. Section 238-2.6, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:
No county surcharge on state tax shall be established upon any use taxable
under this chapter at the one-half per cent tax rate or upon any use that is
not subject to taxation or that is exempt from taxation under this chapter[
except for the use of property, services, or contracting not subject to
taxation under section 238-3(j) as a result of an approval under section 237-29
pursuant to section 201H- ."
SECTION 9. (a) All state agencies within a location–efficient area shall enter into a memorandum of understanding with the Hawaii housing finance and development corporation by December 31, 2020 to develop at least one mixed-use project within the location-efficient area, unless exempted by the Hawaii housing finance and development corporation.
(b) The Hawaii housing finance and development corporation shall submit an annual report to the legislature including, but not limited to, the following information:
(1) How many memoranda of understanding it has entered into and how many location-efficient areas it has exempted as not currently suitable for residential use;
(2) How the mixed-use project will help address the State's population growth by meeting affordable housing demand and contributing to transit ridership; and
(3) How the mixed-use project will achieve the goals of establishing a new population center outside of central Honolulu.
SECTION 10. Notwithstanding any other provision of law, for purposes of this part, any and all references to "project" in section 201H-36, Hawaii Revised Statutes, shall include mixed-use projects under section 201H- , Hawaii Revised Statutes.
SECTION 11. The legislature finds that one method to address affordable housing needs may be the construction of micro apartment housing units. Such units, which have been implemented in high density cities such as Seattle and New York, provide practical alternative housing options for single individuals and affordable options for low- and moderate-income earners.
SECTION 12. 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 2014-2015 for the construction of micro apartment housing units in areas where housing needs are affected by rail transit and related developments.
For purposes of this appropriation, "micro apartment housing unit" means a dwelling unit with a:
(1) Total floor area of not less than two hundred twenty square feet and not more than three hundred twenty square feet, which shall be increased by one hundred square feet for each occupant in excess of two occupants; and
(2) Separate closet, kitchen sink, cooking appliance, refrigeration facilities, and separate bathroom containing a toilet and a bathtub or shower.
The sum appropriated shall be expended by the Hawaii housing finance and development corporation for the purposes of this Act.
SECTION 13. This Act shall take effect on July 1, 2050.
Hawaii Housing Finance and Development Corporation; Appropriation; Micro Apartment Housing Units; HART; Rail
Requires all state agencies within a half-mile radius of proposed rail stations to enter into memoranda of understanding and convene working groups with HART on potential housing impacts of the trail system. Provides a GET exemption for the development of affordable housing in mixed-use projects in location efficient locations and requires state agencies in these locations to enter into memoranda of understanding with HHFDC to develop mixed-use projects. Makes an appropriation for micro apartment housing units. Effective July 1, 2050. (SB2267 HD1 PROPOSED)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.