Bill Text: HI HB432 | 2025 | Regular Session | Introduced
Bill Title: Relating To The Rental Housing Revolving Fund.
Spectrum: Partisan Bill (Democrat 42-0)
Status: (Introduced) 2025-01-21 - Referred to HSG, FIN, referral sheet 2 [HB432 Detail]
Download: Hawaii-2025-HB432-Introduced.html
|
HOUSE OF REPRESENTATIVES |
H.B. NO. |
432 |
|
THIRTY-THIRD LEGISLATURE, 2025 |
|
|
|
STATE OF HAWAII |
|
|
|
|
|
|
|
|
||
|
|
||
A BILL FOR AN ACT
relating to the rental housing revolving fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the State has a housing crisis and that although general excise tax exemptions and county subsidies help to reduce development costs, private development of rental housing for households earning from sixty up to one hundred forty per cent of the area median income is not financially feasible without additional public subsidy.
The legislature further finds that although funding is appropriated annually to the rental housing revolving fund to finance projects serving households earning up to one hundred forty per cent of area median income, the funds are prioritized for federal and state low-income housing tax credit financed projects, which generally only serve households earning up to sixty per cent of the area median income. Because the demand for revolving fund financing from first-priority tax credit projects far exceeds funding availability, mixed-income projects, including those with units serving households earning up to one hundred forty per cent of the area median income, are not able to utilize the rental housing revolving fund.
The legislature also finds that strategies are needed to help keep local residents in the State. Having affordable rental housing opportunities for working families reduces net domestic outmigration and preserves critical segments of the State's labor force.
Accordingly, the purpose of this Act is to provide a dedicated source of funds to finance mixed-income rental housing projects.
SECTION 2. Section 201H-202, Hawaii Revised Statutes, is amended to read as follows:
"§201H-202 Rental housing revolving fund. (a) There is established the rental housing revolving fund to be administered by the corporation.
(b) An amount from the fund, to be set by the corporation and authorized by the legislature, may be used for administrative expenses incurred by the corporation in administering the corporation's housing finance programs; provided that fund moneys shall not be used to finance day-to-day administrative expenses of projects allotted fund moneys.
(c) The following may be deposited into the fund[:]
or into the mixed-income subaccount established under subsection (f): appropriations made by the legislature,
conveyance taxes pursuant to section 247-7, private contributions, repayment of
loans, interest, other returns, and moneys from other sources.
(d) The fund shall be used to provide loans for the development, pre-development, construction, acquisition, preservation, and substantial rehabilitation of rental housing units. The corporation shall not forgive any loan made from the fund unless the corporation forecloses on the project. Permitted uses of the fund may include but are not limited to planning, design, land acquisition, costs of options, agreements of sale, downpayments, equity financing, capacity building of nonprofit housing developers, credit enhancement, gap financing, or other housing development services or activities as provided in rules adopted by the corporation pursuant to chapter 91. The rules may provide for a means of recapturing loans or grants made from the fund if a rental housing project financed under the fund is refinanced or sold at a later date. The rules may also provide that moneys from the fund shall be leveraged with other financial resources to the extent possible.
(e) [Moneys] Except as provided in
subsection (f), moneys available in the fund shall be used for the purpose
of providing, in whole or in part, loans for rental housing projects
demonstrating project readiness, efficiency, and feasibility acceptable to the
corporation in the following order of priority:
[(1) For projects that were awarded low-income
housing credits pursuant to paragraph (2), priority shall be given to projects
with a perpetual affordability commitment;
(2)] (1) Projects or units in projects that are
allocated low-income housing credits pursuant to the state housing credit
ceiling under section 42(h) of the Internal Revenue Code of 1986, as amended,
or projects or units in projects that are funded by programs of the United
States Department of Housing and Urban Development and United States Department
of Agriculture Rural Development wherein:
(A) At least fifty per cent of the available units are for persons and families with incomes at or below eighty per cent of the median family income of which at least five per cent of the available units are for persons and families with incomes at or below thirty per cent of the median family income; and
(B) The remaining units are for persons and families with incomes at or below one hundred per cent of the median family income;
provided
that the corporation may establish rules to ensure full occupancy of fund
projects; [and]
(2) For projects that were awarded low-income
housing credits pursuant to paragraph (1), priority shall be given to projects
with a perpetual affordability commitment; and
(3) Mixed-income rental projects or units
in a mixed-income rental project [wherein all of the available units are]
for persons and families with incomes at or below one hundred forty per cent of
the median family income.
(f) There is established within the fund a
mixed-income subaccount. Moneys in the
mixed-income subaccount shall be used to make loans to mixed-income rental
projects or units in a mixed-income rental project for persons and families
with incomes at or below one hundred forty per cent of the area median
income. The corporation shall establish
an application process for the allocation of funds in the mixed-income
subaccount that gives preference to projects meeting the following criteria
that are listed in descending order of priority:
(1) A diverse range of affordability,
targeting persons and families with incomes up to one hundred forty per cent of
the median family income;
(2) Projects located on state or county
owned land;
(3) Projects for which a loan from the
subaccount is reasonably projected to be fully repaid within forty years from
funding; and
(4) Any other criteria as the
corporation deems necessary to carry out the purposes of this subsection.
If
the corporation, after applying the process described in this subsection, finds
a nonprofit project equally ranked with a for-profit or government project, the
corporation shall give preference to the nonprofit project in allotting funds
from the mixed-income subaccount.
Moneys derived from the repayment of loans funded by the mixed-income subaccount, interest thereon, and related fees and returns shall be deposited into the mixed-income subaccount.
[(f)]
(g) There is established within
the fund a bond volume cap recycling program subaccount. The bond volume cap recycling program
subaccount shall be maintained as a reserve for the bond volume cap recycling
program established pursuant to section 39B-2(f).
[(g)]
(h) The corporation shall submit
an annual report to the legislature no later than twenty days prior to the
convening of each regular session describing the projects funded and, with
respect to rental housing projects targeted for persons and families with
incomes at or below thirty per cent of the median family income, its efforts to
develop those rental housing projects, a description of proposals submitted for
this target group and action taken on the proposals, and any barriers to
developing housing units for this target group.
[(h)]
(i) For the purposes of this
subpart, the applicable median family income shall be the median family income
for the county or standard metropolitan statistical area in which the project
is located as determined by the United States Department of Housing and Urban
Development, as adjusted from time to time.
[(i)]
(j) The corporation may provide
loans under this section; provided that the corporation shall establish
loan-to-value ratios to protect the fund from inordinate risk and that under no
circumstances shall the rules permit the loan-to-value ratio to exceed one
hundred per cent; provided further that the underwriting guidelines include a
debt-coverage ratio of no less than 1.0 to 1.
[(j)]
(k) For the period commencing
July 1, 2005, through June 30, 2009, the fund may be used to provide grants for
rental units set aside for persons and families with incomes at or below thirty
per cent of the median family income in any project financed in whole or in
part by the fund in proportion of those units to the total number of units in
the project. At the conclusion of the
period described in this subsection, the corporation shall report to the
legislature on the number and use of grants provided and whether the grants
were an effective use of the funds for purposes of developing rental housing
for families at or below thirty per cent of the median family income."
SECTION 3. Section 201H-204, Hawaii Revised Statutes, is amended to read as follows:
"[[]§201H-204[]] Eligible projects. (a)
Activities eligible for assistance from the fund shall include but not
be limited to:
(1) New
construction, rehabilitation, or preservation of low-income or mixed-income
rental housing units that meet the criteria for eligibility described in
subsection (c)[;] or section 201H-202(f);
(2) The leveraging of moneys with the use of fund assets;
(3) Pre-development activity grants or loans to nonprofit organizations; and
(4) Acquisition of housing units for the purpose of preservation as low-income or very low-income housing.
(b) Preference shall be given to projects producing units in at least one of the following categories:
(1) Multifamily units;
(2) Attached single-family units;
(3) Apartments;
(4) Townhouses;
(5) Housing units above commercial or industrial space;
(6) Single room occupancy units;
(7) Accessory apartment units;
(8) Employee housing;
(9) United States Department of Housing and Urban Development mixed finance development of public housing units; and
(10) Other
types of units meeting the criteria for eligibility set forth in subsection
(c)[.] or section 201H-202(f).
(c)
[The] Except as provided in section 201H-202(f), the
corporation shall establish an application process for fund allocation that
gives preference to projects meeting the following criteria that are listed in
descending order of priority:
(1) Serve the original target group;
(2) Provide at least five per cent of the total number of units for persons and families with incomes at or below thirty per cent of the median family income;
(3) Provide the maximum number of units for persons or families with incomes at or below eighty per cent of the median family income;
(4) Are committed to serving the target group over a longer period of time;
(5) Increase the integration of income levels of the immediate community area;
(6) Meet the geographic needs of the target group of the proposed rental housing project, such as proximity to employment centers and services; and
(7) Have favorable past performance in developing, owning, managing, or maintaining affordable rental housing.
The corporation may include other criteria as it deems necessary to carry out the purposes of this subpart.
If the corporation, after applying the process described in this subsection, finds a nonprofit project equally ranked with a for-profit or government project, the corporation shall give preference to the nonprofit project in allotting fund moneys."
SECTION 4. Section 247-7, Hawaii Revised Statutes, is amended to read as follows:
"§247-7 Disposition of
taxes.
All taxes collected under this chapter shall be paid into the state
treasury to the credit of the general fund of the State, to be used and
expended for the purposes for which the general fund was created and exists by
law; provided that of the taxes collected each fiscal year:
(1) Ten per cent or $5,100,000, whichever is less,
shall be paid into the land conservation fund established pursuant to section
173A-5; and
(2) Fifty per cent or $38,000,000, whichever is
less, shall be paid into the rental housing revolving fund established by
section 201H-202[.]; provided that funds allocated under this
paragraph may be transferred into the mixed-income subaccount
established pursuant to section 201H-202(f)."
SECTION 5. The director of finance may transfer moneys from the rental housing revolving fund to the rental housing revolving fund mixed-income subaccount in an amount not to exceed $75,000,000 for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027.
SECTION 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $75,000,000 or so much thereof as may be necessary for fiscal year 2025-2026 and the same sum or so much thereof as may be necessary for fiscal year 2026-2027 to be deposited into the mixed-income subaccount of the rental housing revolving fund established pursuant to section 201H-202(f), Hawaii Revised Statutes.
SECTION 7. There
is appropriated out of the mixed-income subaccount of the rental housing
revolving fund established pursuant to section 201H-202(f), Hawaii Revised
Statutes, the sum of $75,000,000 or so much thereof as may be necessary for
fiscal year 2025-2026 and the same sum or so much thereof as may be
necessary for fiscal year 2026-2027 for the purposes of the subaccount.
The sums appropriated shall be expended by the Hawaii housing finance and development corporation for the purposes of this Act.
SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 9. This Act shall take effect on July 1, 2025.
|
INTRODUCED BY: |
_____________________________ |
Report Title:
Rental Housing Revolving Fund; Mixed-Income Subaccount; Workforce Rental Housing; Director of Finance; Appropriation
Description:
Establishes the mixed-income subaccount within the Rental Housing Revolving Fund that targets workforce rental housing projects for persons and families with incomes at or below one hundred forty per cent of the area median income. Authorizes the Director of Finance to transfer funds from the Rental Housing Revolving Fund into the mixed-income subaccount. Appropriates funds into and out of the mixed-income subaccount of the Rental Housing Revolving Fund.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
