STAND. COM. REP. NO. 2460

Honolulu, Hawaii

RE: S.B. No. 2070

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 S.B. No. 2070 entitled:

"A BILL FOR AN ACT RELATING TO HOUSING,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Authorize the Hawaii Housing Finance and Development Corporation to designate certain for-sale housing units as permanently affordable;

(2) Require the Hawaii Housing Finance and Development Corporation to adopt rules to implement the Permanently Affordable For-Sale Housing Program;

(3) Repeal certain requirements defining a qualified resident; and

(4) Remove certain restrictions applicable to the transfer of real property developed and sold under chapter 201H, Hawaii Revised Statutes.

Your Committee received testimony in support of this measure from the Hawaii Housing Finance and Development Corporation; Office of Planning and Sustainable Development; Stanford Carr Development, LLC; Holomua Collaborative; Hawaii Appleseed Center for Law and Economic Justice, and Housing Hawaiʻi's Future.

Your Committee finds that current restrictions require government-assisted for-sale housing to remain affordable for ten years following the initial sale. When these restrictions expire, homes can be sold at market rate, leaving the State with fewer homes that are affordable for local residents. Imposing permanent affordability restrictions on these units would ensure that they remain tied to local households for the life of the building.

Your Committee notes the testimony of the Office of Planning and Sustainable Development and Stanford Carr Development, LLC, noting concerns that perpetual affordability restrictions could unreasonably limit the ability of homeowners to build equity for the purchase of larger units in the future. Your Committee further notes that the Hawaii Housing Finance and Development Corporation intends to allow appreciation of 4.4 percent, consistent with previous long-term appreciation patterns. At that rate, these units will be priced out of reach for buyers earning one hundred forty percent of the area median income, just as home prices have outpaced income growth in the State for decades. Your Committee requests that the Hawaii Housing Finance and Development Corporation consider these concerns as this measure moves through the legislative process.

Your Committee has amended this measure by:

(1) Renaming the Permanently Affordable For-sale Housing Program to the Housing for Locals Forever Program;

(2) Clarifying that no eligible buyer shall own any interest in other real property no later than one year after purchasing a unit under the program;

(3) Inserting findings to clarify the intent that this program apply to a majority of units developed under section 201H-38, Hawaii Revised Statutes, and replace existing ten-year buyback requirements; 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 S.B. No. 2070, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2070, 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,

________________________________

STANLEY CHANG, Chair