STAND. COM. REP. NO. 3207

Honolulu, Hawaii

RE: H.B. No. 1733

H.D. 2

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

Your Committee on Housing, to which was referred H.B. No. 1733, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO THE HOUSING LOAN AND MORTGAGE PROGRAM,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Increase the Hula Mae Multifamily Revenue Bond authorization ceiling amount to continue financing affordable rental housing statewide; and

(2) Clarify that revenue bonds treated as refunding bonds do not count against the authorized aggregate principal amount of the bond.

Your Committee received testimony in support of this measure from the Hawaii Housing Finance and Development Corporation, Office of Planning and Sustainable Development, Hawaiʻi Association of REALTORS, AARP Hawaii, Maui Chamber of Commerce, Aloha United Way, and Housing Hawaiʻi's Future.

Your Committee received comments on this measure from one individual.

Your Committee finds that expanding the Hula Mae Multifamily Revenue Bond Program (Program) is critical to the creation of new housing in the State. Crucially, the Program makes the production of below-market rate housing possible by significantly reducing borrowing costs for developers through federally authorized tax-exempt revenue bonds. With the persistent rise in construction costs and the high volume of projects currently in production, the Hawaii Housing Finance and Development Corporation is quickly approaching the existing $3 billion cap on bonds issued through the Program. Once the cap is reached, the Hawaii Housing Finance and Development Corporation will no longer be able to approve new financing for developers, halting the progress of future housing developments. This measure ensures continued access to tax-exempt revenue bonds for developers by increasing the bond cap.

Your Committee notes, however, that the unprecedented state funding for housing developed utilizing Low-Income Housing Tax Credits over the last decade has not ameliorated the housing shortage for the great majority of the State's residents, and that new mechanisms for housing financing are necessary to maximize the efficient use of the enormous taxpayer resources dedicated to housing.

Your Committee has amended this measure by:

(1) Inserting a revenue bond cap amount of $4,000,000,000;

(2) Requiring the Hawaii Housing Finance and Development Corporation to submit a report to the Legislature;

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

(4) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1733, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1733, H.D. 2, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Housing,

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STANLEY CHANG, Chair