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Committee amends preconstruction subsidy bill; Office of Housing outlines reorganization plans and fund status
Summary
The committee amended a preconstruction-subsidy bill to clarify eligible grantees and escrow requirements and advanced the measure to third-reading consideration; Office of Housing officials said $5,000,000 has been appropriated to the preconstruction fund but expenditure amounts were not specified.
The Committee on Housing, Sustainability, Economy and Health on April 29 amended a bill establishing preconstruction subsidies for affordable rental housing (addendum CD2) and recommended the amended bill be reported out for passage on third reading.
The addendum CD2 deletes the developer as an eligible applicant for preconstruction subsidies and clarifies that the fee owner of the land that executes a declaration of restrictive covenants — the owner — is the eligible grantee. The addendum also requires the preconstruction escrow agreement to be executed by the City as granter, the owner as grantee and an escrow agent, and to include provisions for periodic disbursements “in proportion to the prevailing wages paid to date.” The subsidies may be used only to pay prevailing wages to laborers and mechanics working on the affordable rental housing project in compliance with Hawaii Revised Statutes chapter 104.
Office of Housing Executive Director Kevin Orjay said a proposed consolidation to create a Department of Housing and Land Management (a combined department) would be presented to the committee the next day; he described a two-phase reorganization in which responsibilities such as compliance functions for existing programs could move from the Department of Planning and Permitting (DPP) to the new agency in a later phase. Orjay noted staffing constraints: the Department of Land Management currently has 34 approved positions, 23 of which are filled; a new platform could include up to 47 positions but many positions remain unfilled.
Orjay also said the city has appropriated $5,000,000 for the preconstruction fund; he did not have at-hand figures for how much of that appropriation has already been expended and offered to follow up with the committee on expenditure amounts. Council members asked for that follow-up. With no public testimony and no objections from the committee, the chair recommended amending the bill to the addendum CD2 and reporting it out for passage on third reading.
The committee’s action clarified eligibility and escrow requirements for preconstruction subsidies and advanced the measure; the bill’s implementation details (including transfers of administrative responsibility between departments and the fund’s expenditures) remain subject to future administrative steps and council action.
