Bill Text: HI SR132 | 2023 | Regular Session | Introduced
Bill Title: Urging The Hawaii Housing Finance And Development Corporation To Revise The Prioritization And Evaluation And Ranking Criteria For Its Allocation Of Low-income Housing Tax Credits And Awards From The Rental Housing Revolving Fund.
Spectrum: Partisan Bill (Democrat 10-0)
Status: (Passed) 2023-05-22 - Certified copies of resolutions sent. [SR132 Detail]
Download: Hawaii-2023-SR132-Introduced.html
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THE SENATE |
S.R. NO. |
132 |
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THIRTY-SECOND LEGISLATURE, 2023 |
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STATE OF HAWAII |
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SENATE RESOLUTION
Urging the Hawaii HOUSING Finance and Development Corporation to revise the prioritization and evaluation and ranking criteria for its allocation of low-income housing tax credits and awards from the rental housing revolving fund.
WHEREAS, the Hawaii Housing Finance and Development Corporation has been designated as the agency responsible for the administration of the federal and state Low-Income Housing Tax Credit Program; and
WHEREAS, the Low-Income Housing Tax Credit Program uses a point system to facilitate project rankings based on established evaluation criteria; and
WHEREAS, states have discretion over the point system and rating criteria used to score and evaluate project applications for allocation of the tax credits; and
WHEREAS, when the State allocates the tax credit to a developer, the State does not, in return, receive an ownership interest in the development; and
WHEREAS, the State often purchases low-income housing development projects from developers after the required affordability period ends to guarantee tenant stability, resulting in taxpayers paying for projects twice; and
WHEREAS, any profits generated by a housing project stay with the project's developer; and
WHEREAS, unlike certain models similar to Vienna's Limited-Profit Housing Act of 1979, developers in Hawaii are not required to use profits generated by a housing project to build additional housing, and no appropriate incentive exists to require developers to construct additional projects after the completion of a housing project; and
WHEREAS, the development of affordable housing on land already owned by the State creates attractive incentives for private developers to partner with the State to develop or redevelop the state-owned projects, as they exclude the high cost of land from the development cost equation; and
WHEREAS, affordable housing projects on state-owned land also allow the State to ensure that every new affordable housing unit remains affordable in perpetuity, thus increasing the supply of affordable housing; and
WHEREAS, it is in the best interests of the State to modify the evaluation criteria for the Low-Income Housing Tax Credit Program to prioritize the allocation of credits to state-owned development projects and award additional points to developers obligated to use all financial surpluses generated by the project to construct more housing to help the State meet its existing and future housing supply demands; and
WHEREAS, the Rental Housing Revolving Fund is a fund administered by the Hawaii Housing Finance and Development Corporation to provide loans or grants for the development, construction, and rehabilitation of rental housing units; and
WHEREAS, developers often take decades to repay loans, and grants do not have be repaid, resulting in the Rental Housing Revolving Fund relying upon legislative appropriations to replenish the Fund; and
WHEREAS, the Legislature appropriates millions of dollars to the Rental Housing Revolving Fund annually, which is an unsustainable burden for the State to shoulder; and
WHEREAS, the Rental Housing Revolving Fund also uses a point system to facilitate project ranking of applicants based on established evaluation criteria, and the State has discretion over the point system and rating criteria used to score and evaluate applications used to award funds; and
WHEREAS, it is further in the State's best interest to amend the priority for which moneys in the Rental Housing Revolving Fund are to be used, to incentivize developers that are awarded a loan or grant to use the profits to build additional housing to ensure the necessary future supply of housing in the State; now, therefore,
BE IT RESOLVED by the Senate of the Thirty-second Legislature of the State of Hawaii, Regular Session of 2023, that the Hawaii Housing Finance and Development Corporation is urged to revise the Low-Income Housing Tax Credit Program's Qualified Allocation Plan to prioritize the development of projects that will be owned by the State, whether outright or through a right of first refusal and purchase option; and
BE IT FURTHER RESOLVED that, with respect to the Qualified Allocation Plan and the criteria point system developed by the Hawaii Housing Finance and Development Corporation, the Corporation is further urged to:
(1) Add a new criteria category that allows for up to twenty percent of the maximum one hundred twenty points on the application criteria point system to be allocated to projects offering to convey ownership of the finished project to the State or an organization obliged to use all financial surpluses generated by the project to construct housing;
(2) Not award additional points for developer fees that are under twelve percent; and
(3) Prioritize applicants who have demonstrated accelerated full repayment into the Rental Housing Revolving Fund of past Rental Housing Revolving Fund loans; and
BE IT FURTHER RESOLVED that the Hawaii Housing Finance and Development Corporation, in its awarding of funds from the Rental Housing Revolving Fund, is urged to prioritize projects that are owned by the State or an organization obliged to use all financial surpluses generated by the project to construct additional housing; and
BE IT FURTHER RESOLVED that the Hawaii Housing Finance and Development Corporation is requested to amend its administrative rules relating to the Rental Housing Revolving Fund to:
(1) Add a new criteria category that allows for up to twenty percent of the maximum two hundred fifty points on the application criteria point system to be allocated to proposed projects owned by the State or an organization obliged to use all financial surplus generated by the project to construct housing; and
(2) Prioritize applicants who have demonstrated accelerated full repayment of past state housing loans; 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.
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OFFERED BY: |
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Hawaii Housing Finance and Development Corporation; Low-Income Housing Tax Credit; Rental Housing Revolving Fund; Qualified Allocation Plan
