SB763 SD2

SECTION 1. The legislature finds that the State faced an unprecedented economic crisis due to the coronavirus disease 2019 (COVID-19) pandemic, which decimated Hawaii's economy and caused its gross domestic product to plummet. By some measures, Hawaii's economy has been hit harder than any other state in the nation.

The legislature also finds that this drastic decline in economic activity has disproportionately affected the State's most vulnerable populations. The COVID-19 pandemic forced the shutdown of many sectors of the State's economy, triggering mass layoffs and furloughs and causing the State's seasonally adjusted unemployment to surge from 2.4 per cent in March 2020 to a historical high of 22.3 per cent in April 2020. Despite efforts to reopen the economy, Hawaii still had the second-highest unemployment rate in the nation as of November 2020. With the COVID-19 pandemic continuing to rage in some parts of the world and certain countries experiencing recession, visitor arrivals to the State are not expected to recover to pre-pandemic levels until at least 2024. The State will therefore continue to feel the economic impacts of the COVID-19 pandemic for many years to come.

The legislature further finds that, even before the COVID‑19 pandemic, renter households in the State already suffered from deleteriously high housing cost burdens, and that the economic impacts of the COVID-19 pandemic significantly exacerbated this situation. Recent data from the University of Hawaii economic research organization (UHERO) showed that more than eleven thousand tenants in the state had fallen behind on their rent payments and that forty per cent of rental tenants had lost their jobs. Even in a best-case scenario, the number of individuals facing homelessness will continue to rise because of the COVID-19 pandemic. UHERO concluded that, from a policy standpoint, "doing nothing is not a viable option".

Accordingly, the legislature finds that it must take immediate action to mitigate the affordable housing crisis through legislation.

The purpose of this Act is to temporarily exempt affordable housing projects by the Hawaii housing finance and development corporation from specific state and county fees and exactions related to discretionary approval or ministerial permitting, except application fees payable to the Hawaii housing finance and development corporation; provided that the housing units are exclusively for certain qualified residents who are owner or renter occupants and who own no other real property.

SECTION 2. Section 201H-38, Hawaii Revised Statutes, is amended to read as follows:

"§201H-38 Housing development; exemption from statutes, ordinances, charter provisions, and rules. (a) The corporation may develop on behalf of the State or with an eligible developer, or may assist under a government assistance program in the development of, housing projects that shall be exempt from all statutes, ordinances, charter provisions, and rules of any government agency relating to planning, zoning, construction standards for subdivisions, development and improvement of land, and the construction of dwelling units thereon; provided that:

(1) The corporation finds the housing project is consistent with the purpose and intent of this chapter, and meets minimum requirements of health and safety;

(2) The development of the proposed housing project does not contravene any safety standards, tariffs, or rates and fees approved by the public utilities commission for public utilities or of the various boards of water supply authorized under chapter 54;

(3) The [~~legislative body of the~~] county in which the housing project is to be situated shall have approved the project with or without modifications:

(A) The [~~legislative body~~] county shall approve, approve with modification, or disapprove the project by resolution within forty-five days after the corporation has submitted the preliminary plans and specifications for the project to the [~~legislative body.~~] county. If, on the forty-sixth day, a project is not disapproved, it shall be deemed approved by the [~~legislative body;~~] county;

(B) No action shall be prosecuted or maintained against any county, its officials, or employees on account of actions taken by them in reviewing, approving, modifying, or disapproving the plans and specifications; and

(C) The final plans and specifications for the project shall be deemed approved by the [~~legislative body~~] county if the final plans and specifications do not substantially deviate from the preliminary plans and specifications. The final plans and specifications for the project shall constitute the zoning, building, construction, and subdivision standards for that project. For purposes of sections 501-85 and 502-17, the executive director of the corporation or the responsible county official may certify maps and plans of lands connected with the project as having complied with applicable laws and ordinances relating to consolidation and subdivision of lands, and the maps and plans shall be accepted for registration or recordation by the land court and registrar; and

(4) The land use commission shall approve, approve with modification, or disapprove a boundary change within forty-five days after the corporation has submitted a petition to the commission as provided in section 205‑4. If, on the forty-sixth day, the petition is not disapproved, it shall be deemed approved by the commission.

(b) Affordable housing projects developed pursuant to this section shall be exempt from all state and county fees and exactions related to discretionary approval or ministerial permitting relating to planning, development, and improvement of land, and the construction of dwelling units thereon; provided that the exemption under this subsection shall not apply to the fees and costs payable to the corporation nor the rates and fees approved of the various boards of water supply authorized under chapter 54; provided further that the dwelling units developed as part of a fee-exempted affordable housing project shall be exclusively made available to households having incomes at or below one hundred per cent of the area median family income as determined by the United States Department of Housing and Urban Development who:

(1) Are qualified residents, as defined by section 201H‑32;

(2) Are owner or renter occupants; and

(3) Own no other real property.

[~~(b)~~] (c) For the purposes of this section, "government assistance program" means a housing program qualified by the corporation and administered or operated by the corporation or the United States or any of their political subdivisions, agencies, or instrumentalities, corporate or otherwise."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on March 22, 2075; provided that on June 30, 2028, this Act shall be repealed and section 201H-38, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day before the effective date of this Act.

THE SENATE	S.B. NO.	763
THIRTY-SECOND LEGISLATURE, 2023		S.D. 2
STATE OF HAWAII