Bill Text: HI SB1170 | 2024 | Regular Session | Amended
Bill Title: Relating To Affordable Housing Credits.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2024-05-29 - Act 031, 05/28/2024 (Gov. Msg. No. 1131). [SB1170 Detail]
Download: Hawaii-2024-SB1170-Amended.html
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THE SENATE |
S.B. NO. |
1170 |
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THIRTY-SECOND LEGISLATURE, 2023 |
S.D. 2 |
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STATE OF HAWAII |
H.D. 1 |
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C.D. 1 |
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A BILL FOR AN ACT
RELATING TO AFFORDABLE HOUSING CREDITS.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
The
Federal Home Loan Corporation, more commonly known as Freddie Mac, has reported
that the average 30-year fixed residential mortgage interest rate was 3.11 per
cent in December 2021 and 6.42 per cent in December 2022. This one hundred-six per cent increase reflects
the dramatically increasing monthly cost of owning a home for residents and the
decreasing maximum sale price of income-specified affordable housing units that
are constructed under the various programs of the Hawaii housing finance and
development corporation. In addition,
the Federal Reserve has reported that the one-month term of the secured
overnight financing rate, a metric used by lenders to determine real estate
construction loan interest rates, has increased from 0.05 per cent in
December 2021 to 4.30 per cent in December 2022. The eight thousand five hundred per cent
increase reflects the dramatically increasing cost of construction financing for
residential units. These increases in
home loan and construction loan interest rates have severely impaired the
ability of the Hawaii housing finance and development corporation to increase
the affordable housing supply in the State.
Accordingly, the purpose of this Act is to require the counties to issue affordable housing credits for affordable housing units that are constructed under the various programs of the Hawaii housing finance and development corporation.
SECTION 2. Section 46-15.1, Hawaii Revised Statutes, is amended to read as follows:
"§46-15.1 Housing; county powers. (a) Notwithstanding any law to the contrary, 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; [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.
(b) Each county shall recognize housing units
developed by the department of Hawaiian home lands and issue affordable housing
credits to the department of Hawaiian home lands. The credits shall be transferable and shall
be issued on a one‑credit for one-unit basis, unless the housing unit is
eligible for additional credits as provided by adopted county ordinances,
rules, or any memoranda of agreement between a county and the department of
Hawaiian home lands. In the event that
credits are transferred by the department of Hawaiian home lands, twenty-five
per cent of any monetary proceeds from the transfer shall be used by the
department of Hawaiian home lands to develop units for rental properties. Credits shall be issued for each single-family
residence, multi-family unit, other residential unit, whether for purposes of
sale or rental, or if allowed under the county's affordable housing programs,
vacant lot, developed by the department of Hawaiian home lands. The credits may be applied county-wide within
the same county in which the credits were earned to satisfy affordable housing
obligations imposed by the county on market-priced residential and
non-residential developments.
County-wide or project‑specific requirements for housing class,
use, or type; or construction time for affordable housing units shall not
impair, restrict, or condition the county's obligation to apply the credits in
full satisfaction of all county requirements, whether by rule, ordinance, or
particular zoning conditions of a project.
Notwithstanding any provisions [herein] in this section to
the contrary, the department may enter into a memorandum of agreement with any
of the [county of Kauai] counties to establish, modify, or
clarify the conditions for the issuance, transfer, and redemption of the
affordable housing credits in accordance with county affordable housing
ordinances or rules. [Notwithstanding
any provisions herein to the contrary, the department may enter into a
memorandum of agreement with the city and county of Honolulu to establish,
modify, or clarify the conditions for the issuance, transfer, and redemption of
the affordable housing credits in accordance with county affordable housing ordinances
or rules.] At least half of the
affordable housing credits issued by the city and county of Honolulu shall be
subject to a memorandum of agreement pursuant to this subsection.
[For
purposes of this section, "affordable housing obligation" means the
requirement imposed by a county, regardless of the date of its imposition, to
develop vacant lots, single-family residences, multi-family residences, or any
other type of residence for sale or rent to individuals within a specified
income range.]
(c) Each county shall recognize housing units
developed pursuant to section 201H-38 and issue affordable housing credits to the
eligible developer for residences required to be sold or rented to individuals
within a specified income range, if a developer chooses to receive affordable
housing credits. Credits shall be issued
for each single—family residence, multi‑family unit, other residential
unit, whether for purposes of sale, rental, or if allowed under the county's
affordable housing programs, vacant lot, developed pursuant to chapter 201H. Affordable housing credits shall not be issued
if low‑income housing tax credits are utilized in conjunction with the affordable
housing developed pursuant to chapter 201H. The credits shall be transferable and shall be
issued on a one‑credit for one—unit basis, unless the housing unit is
eligible for additional credits as provided by adopted county ordinances,
rules, or any memoranda of agreement between a county and the Hawaii housing
finance and development corporation. In
the event that the affordable housing credits are transferred to the Hawaii
housing finance and development corporation, twenty—five per cent of any
monetary proceeds from the transfer shall be used by the Hawaii housing finance
and development corporation to develop units for rental properties. The credits may be applied county—wide within
the same county in which the credits were earned to satisfy affordable housing
obligations imposed by the county on market—priced residential and
non—residential developments. The
credits may be applied to satisfy up to fifty per cent of the affordable
housing obligations imposed by the county for each market-priced residential or
non-residential development, unless the county allows for more than fifty per
cent as provided by county ordinances, rules, or any memoranda of agreement between
the county and the Hawaii housing finance and development corporation. County—wide or project‑specific
requirements for housing class, use, or type, or construction time for
affordable housing units, shall not impair, restrict, or condition the county's
obligation to apply the credits in full satisfaction of all county
requirements, whether by rule, ordinance, or particular zoning conditions of a
project. Notwithstanding any provision of
this section to the contrary, the Hawaii housing finance and development
corporation may enter into a memorandum of agreement with any of the counties to
establish, modify, or clarify the conditions for the issuance, transfer, and
redemption of the affordable housing credits in accordance with county
affordable housing ordinances or rules.
No
affordable housing credit shall be issued under this subsection until a
certificate of occupancy has been issued.
Prior
to the issuance of an affordable housing credit under this subsection, an
agreement, including affordable housing-related agreements between a county or
the Hawaii housing finance and development corporation and an eligible
developer, shall be executed and include language requiring:
(1) A new and sequential identification
number of at least four digits in length for each affordable housing credit to
be issued within each county for tracking purposes;
(2) An agreement to be recorded on title
of at least one parcel or tax map key of the originating housing project, as
defined in section 201H-1; and
(3) The prompt amendment of an agreement
when an affordable housing credit originally generated by a housing project is
sold, transferred, or utilized to create an easily auditable trail of
ownership.
[(c)]
(d) Notwithstanding any law to
the contrary, any county may:
(1) Authorize and issue bonds under chapter 47 and chapter 49 to provide moneys to carry out the purposes of this section or section 46-15.2, including the satisfaction of any guarantees made by the county pursuant to this section;
(2) Appropriate moneys of the county to carry out the purposes of this section;
(3) Obtain insurance and guarantees from the State or the United States, or grants from either;
(4) Designate, after holding a public hearing on the matter and with the approval of the respective council, any lands owned by it for the purposes of this section;
(5) Provide interim construction loans to partnerships of which it is a partner and to developers whose projects qualify for federally assisted project mortgage insurance, or other similar programs of federal assistance for persons of low and moderate income; and
(6) Adopt rules pursuant to chapter 91 as are necessary to carry out the purposes of this section.
[(d)]
(e) Notwithstanding any law to
the contrary, a county may waive its right to repurchase a privately-developed
affordable housing unit built pursuant to a unilateral agreement or similar
instrument, and may transfer that right of repurchase to a qualified nonprofit
housing trust for the purpose of maintaining the unit as affordable for as long
as required by the county program.
[For
the purposes of this subsection, "qualified nonprofit housing trust"
means a corporation, association, or other duly chartered organization that is
registered and in good standing with the State; that is recognized by the
Internal Revenue Service as a charitable or otherwise tax-exempt organization
under section 501(c)(3) of the Internal Revenue Code of 1986, as amended; and
that has the capacity, resources, and mission to carry out the purposes of this
section as determined by the county in which the housing unit is located.
(e)]
(f) A
qualified nonprofit housing trust shall report the status and use of its
housing units to its respective county by November 30 of each calendar year.
[(f)]
(g) The
provisions of this section shall be construed liberally so as to effectuate the
purpose of this section in facilitating the development, construction, and
provision of low- and moderate-income housing by the various counties.
[(g)]
(h) For purposes
of this section[, "low and moderate income housing"]:
"Affordable
housing obligation" means the requirement imposed by a county, regardless
of the date of its imposition, to develop vacant lots, single-family
residences, multi-family residences, or any other type of residence for sale or
rent to individuals within a specified income range.
"Eligible
developer" has the same meaning as defined in section 201H—32.
"Low-
and moderate-income housing" means any housing project that meets the
definition of "low- and moderate-income housing project" in section
39A-281.
"Qualified
nonprofit housing trust" means a corporation, association, or other duly
chartered organization that:
(1) Is registered and in good standing with the State;
(2) Is recognized by the Internal Revenue Service as a charitable or otherwise tax-exempt organization under section 501(c)(3) of the Internal Revenue Code of 1986, as amended; and
(3) Has the capacity, resources, and mission to carry out the purposes of this section as determined by the county in which the housing unit is located."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
(1) Section 3 of Act 141, Session Laws of Hawaii 2009, as amended by section 3 of Act 102, Session Laws of Hawaii 2015, as amended by section 1 of Act 80, Session Laws of Hawaii 2019, as amended by section 2 of Act 90, Session Laws of Hawaii 2023; and
(2) Section 3 of Act 98, Session Laws of Hawaii 2012, as amended by section 4 of Act 102, Session Laws of Hawaii 2015, as amended by section 50 of Act 55, Session Laws of Hawaii 2016, as amended by section 2 of Act 80, Session Laws of Hawaii 2019, as amended by section 3 of Act 90, Session Laws of Hawaii 2023;
provided further that this Act shall be repealed on July 1, 2031, and section 46-15.1, Hawaii Revised Statutes, shall be reenacted pursuant to section 3 of Act 141, Session Laws of Hawaii 2009, and in accordance with section 23 of Act 96, Session Laws of Hawaii 2014, and section 9 of Act 159, Session Laws of Hawaii 2017.
Report Title:
Counties; Affordable Housing Credits; Hawaii Housing Finance and Development Corporation; Housing Production; County Powers
Description:
Requires the counties to issue affordable housing credits for affordable housing units that are constructed under the various programs of the Hawaii Housing Finance and Development Corporation. Sunsets 7/1/2031. (CD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
