THE SENATE	S.C.R. NO.	56
THIRTY-SECOND LEGISLATURE, 2024
STATE OF HAWAII

SENATE CONCURRENT

RESOLUTION

Urging the hawaii housing finance and development corporation to adopt administrative rules to prohibit rental housing revolving fund loan forgiveness.

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 full 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, the House of Representatives concurring, that the HHFDC is urged to adopt administrative rules that prohibit Rental Housing Revolving Fund loan forgiveness; and

BE IT FURTHER RESOLVED that a certified copy of this Concurrent Resolution be transmitted to the Executive Director of the Hawaii Housing Finance and Development Corporation.

OFFERED BY:

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Report Title:

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