Bill Text: HI SR45 | 2024 | Regular Session | Amended

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Bill Title: Urging The Hawaii Housing Finance And Development Corporation To Adopt Administrative Rules To Prohibit Rental Housing Revolving Fund Loan Forgiveness Unless The Corporation Repossesses The Project.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Introduced - Dead) 2024-03-25 - Report adopted, as amended (SD 1) and referred to JDC. [SR45 Detail]

Download: Hawaii-2024-SR45-Amended.html

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THE SENATE	S.R. NO.	45
THIRTY-SECOND LEGISLATURE, 2024		S.D. 1
STATE OF HAWAII

SENATE RESOLUTION

 

 

URGING THE HAWAII HOUSING FINANCE AND DEVELOPMENT CORPORATION TO ADOPT ADMINISTRATIVE RULES TO PROHIBIT RENTAL HOUSING REVOLVING FUND LOAN FORGIVENESS UNLESS THE CORPORATION REPOSSESSES THE PROJECT.

 

 

     WHEREAS, the State's Rental Housing Revolving Fund (RHRF) provides equity gap low-interest loans to qualified developers constructing affordable housing units; and

 

     WHEREAS, the RHRF is funded by state taxpayers, namely revenues from the conveyance tax and from general appropriations made by the Legislature; and

 

     WHEREAS, these loans are very long-term (fifty-five years) and low-interest (0.25 percent); and

 

     WHEREAS, repayment does not begin until after senior debt has been fully repaid, often in year thirty-one; and

 

     WHEREAS, developers may refinance RHRF debt from private sector banks, repaying the RHRF early, but rarely do so because they have no incentive to; and

 

     WHEREAS, the Hawaii Housing Finance and Development Corporation (HHFDC) may reduce the developer's RHRF debt service payments if justified by the project's low cashflow; and

 

     WHEREAS, HHFDC is permitted to forgive any remaining RHRF debt; and

 

     WHEREAS, affordable housing developers have no incentive to repay RHRF loans in full; and

 

     WHEREAS, most RHRF housing is only temporarily affordable, and their owners are free to evict low-income tenants and rent or sell their projects to the highest bidder after affordability restrictions expire; and

 

     WHEREAS, over fourteen thousand units of affordable housing will expire by the year 2100, many of which were subsidized by RHRF loans; and

 

     WHEREAS, RHRF loan terms are commercially unreasonable, and state taxpayers deserve a better deal; and

 

     WHEREAS, forgiving RHRF loans to private developers amounts to a free gift of taxpayer funds to private entities; and

 

     WHEREAS, full repayment of these loans will enable the RHRF to create more housing in the future; now, therefore,

 

     BE IT RESOLVED by the Senate of the Thirty-second Legislature of the State of Hawaii, Regular Session of 2024, that the Hawaii Housing Finance and Development Corporation is urged to adopt administrative rules that prohibit Rental Housing Revolving Fund loan forgiveness unless the Corporation repossesses the project; and

 

     BE IT FURTHER RESOLVED that the Hawaii Housing Finance and Development Corporation is urged to prohibit the issuance of grants from the Rental Housing Revolving Fund; and

 

     BE IT FURTHER RESOLVED that a certified copy of this Resolution be transmitted to the Executive Director of the Hawaii Housing Finance and Development Corporation, who is requested to transmit a copy to each member of the Board of Directors of the Hawaii Housing Finance and Development Corporation.

Report Title: 

Hawaii Housing Finance and Development Corporation; Rental Housing Revolving Fund; Loan Forgiveness; Prohibition; QAP; Amendments