STAND. COM. REP. NO. 3277

Honolulu, Hawaii

RE: H.B. No. 2090

H.D. 1

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2024

State of Hawaii

Sir:

Your Committees on Government Operations and Water and Land, to which was referred H.B. No. 2090, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO HOUSING,"

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Beginning on January 1, 2026, permit residential uses in areas zoned for commercial use, with certain exceptions; and

(2) Require, no later than January 1, 2026, each county to adopt or amend its ordinances to allow for adaptive reuse of commercial buildings for residential purposes.

Your Committees received testimony in support of this measure from the Department of Land and Natural Resources, Hawaii Housing Finance and Development Corporation, one member of the Kauaʻi County Council, Hawaiʻi Association of REALTORS, NAIOP Hawaii, Building Industry Association of Hawaii, Housing Hawaiʻi's Future, Hawaii Appleseed Center for Law and Economic Justice, Grassroot Institute of Hawaii, Hawaiʻi Island Chamber of Commerce, BOMA Hawaiʻi, Hawaii Zoning Atlas, and nine individuals.

Your Committees received testimony in opposition to this measure from the City and County of Honolulu Department of Planning and Permitting.

Your Committees received comments on this measure from the American Institute of Architects Hawaii State Council.

Your Committees find that the State is experiencing a chronic housing shortage. Your Committees further find that the adaptive reuse of commercial buildings that are underutilized due to market conditions or functional obsolescence for residential purposes is more-cost effective than the construction of new housing on undeveloped land. This measure seeks to efficiently increase the State's housing inventory to better meet local need by requiring the counties to relax regulatory land use restrictions in areas zoned for commercial use, including allowing for the adaptive reuse of existing commercial buildings.

According to testimony received by your Committees, because the provisions of this measure do not allow for adaptive reuse until after January 1, 2026, existing projects in areas zoned for commercial use that are currently going through the permitting and development process would not be able to practice adaptive reuse to increase the State's housing inventory. Accordingly, this measure needs to be amended to address this matter.

Your Committees have amended this measure by:

(1) Accelerating the date for the counties to permit residential uses in areas zoned for commercial use, with certain exceptions, and to allow for residential use of commercial buildings for residential purposes, from January 1, 2026, to January 1, 2025;

(2) Amending section 1 to reflect its amended purpose; and

(3) Inserting an effective date of July 1, 2491, to encourage further discussion.

As affirmed by the records of votes of the members of your Committees on Government Operations and Water and Land that are attached to this report, your Committees are in accord with the intent and purpose of H.B. No. 2090, H.D. 1, as amended herein, and recommend that it pass Second Reading in the form attached hereto as H.B. No. 2090, H.D. 1, S.D. 1, and be referred to your Committee on Judiciary.

Respectfully submitted on behalf of the members of the Committees on Government Operations and Water and Land,

________________________________ LORRAINE R. INOUYE, Chair

________________________________ ANGUS L.K. MCKELVEY, Chair