Hawaii House Bill HR104

Hawaii 2022 Regular Session

• Introduced: 3/11/22
• Refer: 3/14/22
• Report Pass: 3/31/22
• Passed: 3/31/22

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

The resolution points out the critical role of nonprofit housing organizations in keeping housing affordable in Hawaii, particularly amid a reported shortage of 50,000 housing units. By permitting predatory practices, investors who are supposed to work within a framework that supports long-term housing affordability instead prioritize profit over community needs. This has raised alarms regarding the future of affordable housing in the state, prompting legislative intervention to protect the rights of nonprofit organizations to maintain their projects beyond the initial fifteen-year compliance period.

Summary

House Resolution 104 urges the Hawaii Housing Finance and Development Corporation to take action against profit-driven investors and aggregators involved in the state's Low-Income Housing Tax Credit (LIHTC) program. The resolution highlights issues where predatory investors take advantage of the LIHTC framework designed to promote affordable housing. These investors manipulate the program by blocking the right of first refusal that nonprofit developers possess, undermining the program's original intent to keep housing affordable and accessible.

Contention

Key points of contention addressed within HR104 include the practices of aggregators—agents who acquire interests from original investors in a project with the intent to obstruct property transfers to nonprofit organizations. The resolution calls for amendments to the Qualified Application Plan for the LIHTC program, ensuring that nonprofit developers can fully exercise their rights as delineated in the contract. Critics of the current investor practices argue that these strategies hurt the community by fragmenting essential affordable housing opportunities and enhancing legal disputes that nonprofit organizations, often resource-strapped, cannot afford.