Senate housing committees weigh DHHL seat on HHFDC, new Department of Housing and multiple housing finance bills; several measures passed

The Senate committees on Housing and Hawaiian Affairs met jointly Feb. 3 to consider multiple housing measures, including Senate Bill 759 to add the chairperson of the Department of Hawaiian Home Lands (DHHL) or a designee to the Hawaii Housing Finance and Development Corporation (HHFDC) board; Senate Bill 68 to create a Department of Housing that would place several housing-related agencies under one umbrella; and a series of financing and program bills affecting HHFDC programs, the Dwelling Unit Revolving Fund (DERF) pilot, and DHHL borrowing authority. Several bills were voted out of committee on the day, while others were deferred for further work.

Supporters of SB 759 argued that adding DHHL representation on the HHFDC board would help Hawaiian Home Lands access tax credits, private activity bonds and other financing to develop lots and housing for beneficiaries. DHHL and several testifiers described existing partnerships with HHFDC — including past awards of Low Income Housing Tax Credits (LIHTC) and use of the Rental Housing Revolving Fund — and said a seat at the table would help DHHL navigate and leverage those funding sources. Opponents and some committee members raised conflicts-of-interest concerns and asked whether non‑voting or informational roles would accomplish the same aims without giving DHHL a voting seat. A DHHL representative said the agency had sought and received an opinion from the State Ethics Commission that a seat would not automatically create a disqualifying conflict and said DHHL would recuse when appropriate.

Senate Bill 68, which would establish a Department of Housing and place the Hawaii Community Development Authority (HCDA), HHFDC, the Office of Planning and Sustainable Development (OPSD) and the Hawaii Public Housing Authority (HPHA) within the new department for administrative purposes, was debated at length. Testimony included written comments from HCDA and in-person concerns that the bill did not explicitly include the governor’s Office on Homelessness and Housing Solutions. Committee discussion led to proposed technical amendments and language clarifying that HPHA would be attached for administrative purposes and that the department responsibilities would be broad enough to cover OPSD’s coastal zone and land-use duties as well as HCDA planning and infrastructure roles. The committee voted to pass SB 68 with amendments.

On program and finance items, HHFDC asked that the DERF equity pilot (SB 1229) be made permanent. HHFDC said the temporary pilot had three projects enrolled, about 81 units participating and roughly $7.4 million to $10.0 million encumbered; the agency described the equity‑for‑for‑sale assistance as a way to revive stalled for‑sale projects in a high‑interest rate environment. The committee adopted HHFDC technical language (including flexibility on lien position) and passed the bill with amendments.

Senate Bill 152, allowing DHHL to use monies in the Dwelling Unit Revolving Fund as collateral for HUD‑guaranteed loans (subject to HHFDC approval), drew supportive testimony focused on getting additional funding to clear the long DHHL wait list. SB 152 passed with technical amendments.

Public-safety and operational bills drew local testimony. SB 602 would allow HPHA to designate certain parcels as closed to the public and to require signage; public housing residents from Makalapa Manor and neighborhood advocates described long-running problems at a nearby parking lot and supported the measure. That bill passed unamended.

Additional measures cleared or were advanced by the committee: SB 572 (allowing HHFDC to prioritize loans administered by community development financial institutions) passed unamended; SB 826 (clarifying LIHTC eligibility language) passed unamended; SB 771 (repealing rules about HHFDC chair eligibility) passed unamended with committee note that board composition would remain two‑thirds public members; SB 749 (a rental assistance eligibility/retention provision) passed unamended with committee notes on funding needs; SB 576 (amending legislative reporting and public housing special fund rules) passed unamended; SB 31 (allowing persons who discover discriminatory restrictive covenants to take specified actions) was passed with amendments to align the definition of “discriminatory restrictive covenant” with state protected classes; and SB 456 (addressing bed‑bug infestations) was advanced as an amendment adding bed bugs to the implied warranty of habitability rather than creating a standalone statutory scheme.

Several complex or heavily amended bills were deferred for further drafting and decision‑making on Feb. 4, including SB 834 (clarifying the 201H transfer restrictions in relation to Hawaiian homelands), SB 491 (an accessory dwelling unit financing and deed‑restriction program), and SB 490 (the Kamaaina Homes deed‑restriction acquisition program). Committee members said those measures required additional time to reconcile program mechanics and county implementation details.

Votes at a glance: the committees recorded multiple votes during decision‑making. Notable outcomes recorded in the transcript include: SB 759 (pass unamended); SB 152 (pass with technical amendments); SB 68 (pass with amendments); SB 1229 (pass with HHFDC technical amendments); SB 572, SB 826, SB 771, SB 749, SB 576, SB 602 (all passed unamended); SB 31 and SB 456 (passed with amendments); SBs 491, 490 and 834 deferred to Feb. 4. The committees’ reports will capture any additional technical amendments and HHFDC or other agencies’ requested language.

Why it matters: several bills on the agenda would alter how federal and state housing dollars are accessed and administered, potentially speeding some DHHL and affordable‑home projects, reshaping governance for development finance, and changing operational rules for public housing and habitability standards. The deferred bills include items the committees said require interagency coordination and clearer implementation language before final votes.

Looking ahead: decision making on deferred measures was scheduled for Feb. 4 at 1 p.m. in room 225; committee chairs said they would circulate technical language and agency clarifications before that session.