Hawaii Senate Bill SCR78

Hawaii 2022 Regular Session

• Introduced: 3/10/22
• Refer: 3/11/22

Caption

Urging The Hawaii Housing Finance And Development Corporation To Combat Hostile And Harmful Actions By Profit-driven Investors And Aggregators Participating In The State's Low-income Housing Tax Credit Program.

Impact

This resolution aims to protect the right of first refusal for nonprofit developers within the LIHTC framework by calling for necessary amendments to the Qualified Application Plan for LIHTC. By ensuring that nonprofit organizations can exercise their purchase options upon expiration of the compliance period, SCR78 seeks to fortify the mission of these nonprofits, which is crucial given the ongoing housing crisis exacerbated by the actions of profit-driven entities. The resolution recognizes the detrimental impacts these aggressive investors could have on the state's ability to provide sustainable affordable housing, reinforcing the need for protective measures.

Summary

SCR78 is a Senate Concurrent Resolution from Hawaii urging the Hawaii Housing Finance and Development Corporation (HHFDC) to address harmful actions by profit-driven investors and aggregators involved in the state's Low-Income Housing Tax Credit (LIHTC) program. The resolution highlights the challenges faced by nonprofit housing developers who aim to maintain permanent affordability in housing units amid increasing pressures from predatory investors who prioritize profit over community needs. The measure stems from a pressing shortage of 50,000 housing units within the state, emphasizing the vital role of nonprofit entities in combating the housing crisis by keeping housing affordable over the long term.

Contention

Notable points of contention arise concerning the practices of aggregators—investors who buy stakes in LIHTC projects and use various tactics to block the transfer of property to nonprofit organizations, ultimately selling them at market rates. This undermines the goals of the LIHTC program, which was designed to foster affordable housing creation. Furthermore, the resolution underscores the resource drain on nonprofit organizations, which often lack the financial means to engage in protracted legal battles against these actions. Therefore, SCR78 calls not only for state level intervention but also requests that Hawaii's congressional delegation work on federal legislation to bolster protections for nonprofits operating under the LIHTC.