STAND. COM. REP. NO. 386

Honolulu, Hawaii

RE: S.B. No. 1286

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committees on Housing and Water and Land, to which was referred S.B. No. 1286 entitled:

"A BILL FOR AN ACT RELATING TO THE HAWAII COMMUNITY DEVELOPMENT AUTHORITY,"

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Increase options to build affordable housing in Hawai‘i Community Development Authority (HCDA) districts by increasing the permissible lease term to ninety-nine years; and

(2) Prohibit HCDA from leasing lands that were classed as crown lands prior to August 15, 1895, for a term longer than sixty-five years.

Your Committees received testimony in support of this measure from the Department of Business, Economic Development, and Tourism and Hawai‘i Community Development Authority. Your Committees received comments on this measure from the Office of Hawaiian Affairs.

Your Committees find that given the acute lack of affordable housing in the State, a multi-pronged approach is necessary to meet the current and future housing demands. Leasehold housing units tend to be more affordable than fee simple housing units, if the land on which housing is developed is owned by the State and leased to a developer for housing development. Developing multi-family housing units on a lot lowers the cost of land for the development, which in turn will lower the sales price of the housing units. Because the cost of leasehold land is lower than fee simple land and paid over a longer period, it further reduces the land cost and makes the housing units even more affordable. Additionally, the State will continue to be the fee owner of the land. Thus, encouraging development of for-sale leasehold housing units is a viable strategy in meeting housing demand. Therefore, this measure authorizes HCDA to lease real property, except certain crown lands, for a term of ninety-nine years.

Your Committees note the testimony of the Office of Hawaiian Affairs maintaining that the Native Hawaiian people continue to assert their claim to crown and government lands; claims that have yet to be settled. Your Committees also note the Office of Hawaiian Affairs' request that the provision in the measure that prohibits HCDA from leasing real property classed as crown lands prior to August 15, 1895, also be applied to lands that were classed as government lands prior to August 15, 1895. Your Committees request the Committees on Ways and Means and Judiciary consider this issue should they hear this measure.

As affirmed by the records of votes of the members of your Committees on Housing and Water and Land that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1286 and recommend that it pass Second Reading and be referred to your Committees on Ways and Means and Judiciary.

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

________________________________ LORRAINE R. INOUYE, Chair

________________________________ STANLEY CHANG, Chair