HCR108 is a House Concurrent Resolution from the State of Hawaii, urging action by the Hawaii Housing Finance and Development Corporation (HHFDC) to address exploitative practices by profit-driven investors and aggregators involved in the Low-Income Housing Tax Credit (LIHTC) program. The bill highlights the detrimental effects of predatory behavior by investors who block nonprofit organizations’ rights to purchase properties at the end of the fifteen-year compliance period, a primary goal of the LIHTC program. This manipulation threatens the intent of the program, which was designed to maintain permanent affordability of housing in a region facing a significant housing shortage.
The resolution emphasizes the critical role of nonprofit developers who apply for LIHTC and rely on the generated funds to create affordable housing. However, predatory investors and aggregators are undermining these efforts by selling properties at market rates after benefiting from tax credits, depriving nonprofits of their right of first refusal. This issue is particularly pressing in Hawaii, where there is a documented shortage of approximately 50,000 housing units, exacerbating the ongoing housing and homelessness crises.
In response, HCR108 calls for the HHFDC to amend the Qualified Application Plan for the LIHTC program to ensure that nonprofit developers can effectively exercise their right of first refusal. It also recommends changes to LIHTC regulatory agreements to eliminate hindrances faced by nonprofits when trying to acquire properties. Furthermore, the bill advocates for federal legislation to strengthen these rights, making it a collaborative effort between state and federal representatives to tackle predatory practices and preserve affordable housing.
The passage of HCR108 reinforces the importance of protecting affordable housing initiatives in Hawaii amid rising costs and increasing homelessness, calling on both state authorities and congressional representatives to take intertwined actions to safeguard and promote the interests of communities benefiting from the LIHTC program.