The legislation empowers counties to develop and construct housing, acquire land, and provide loans to qualified entities for creating affordable housing. Counties will have increased authority to act similar to the state housing finance corporation, which could streamline the process for new housing projects and potentially reduce the bureaucratic hurdles that have previously impeded development efforts. However, the bill also includes provisions banking on its ability to exempt certain county projects from general excise and receipts taxes, thereby aligning local housing initiatives more closely with state-level goals.
Senate Bill 2840 addresses Hawaii's ongoing housing crisis by proposing a new source of interim financing for affordable housing projects through amendments to chapter 201H of the Hawaii Revised Statutes. This bill recognizes the critical shortage of housing units required in the state, as a 2019 study indicated a need for over 50,000 new homes by 2025. As mortgage and construction loan interest rates have soared, the bill seeks to enable local counties to utilize powers akin to the Hawaii Housing Finance and Development Corporation to facilitate the construction and provision of low- and moderate-income housing.
While the bill aims to facilitate a more agile response to the unmet housing demand, it may also engender tension between county governments and the state regarding the allocation of financial resources and responsibility for housing outcomes. The fact that counties cannot compel the state to issue bonds raises questions about long-term financing strategies for housing development. There is potential for debate around how effectively local governments can leverage these new powers without overstepping limitations set forth in the legislation.