RELATING TO HOUSING.

SB2544

THE SENATE

S.B. NO.

2544

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to housing
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
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The
legislature finds that the State continues to experience a severe shortage of
housing that is affordable for households earning between sixty per cent and
one hundred forty per cent of the area median income, a portion of the housing
market commonly referred to as "missing middle" housing.
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The legislature further finds that successful
housing programs in other jurisdictions, such as the BC Builds program
implemented in British Columbia, demonstrate that a housing agency must act as
a public developer by proactively acquiring land, securing entitlements, and
prepackaging shovel-ready projects to cut delivery times.

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Accordingly, the purpose of this Act is to:

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(1)
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Establish
within the Hawaii housing finance and development corporation the Hawaii builds
pilot program as a five-year pilot program, under which:

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(A)
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The corporation may deploy moneys from the dwelling
unit revolving fund for certain development activities and as active
construction equity;

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(B)
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Interagency coordination and expedited review
for designated pilot projects are required by law; and

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(C)
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At least fifty per cent of housing units must
be for households having incomes between sixty per cent and one hundred forty
per cent of the area median income, thus facilitating the timely delivery of
missing middle housing throughout the State; and

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(2)
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Appropriate
moneys to implement the Hawaii builds pilot program.

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SECTION 2.
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(a)
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There is established the
Hawaii builds pilot program within the Hawaii housing finance and development
corporation.
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The pilot program shall run
for a period of five years as provided in subsection (n).

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(b)
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The board of directors of the corporation shall designate specific
projects as Hawaii builds pilot projects, which shall be governed pursuant to
this Act.
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To qualify as a Hawaii builds
pilot project, a project shall:

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(1)
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Be
located on a site that possesses, at a minimum, adequate existing
infrastructure capacity, including water, sewer, and transportation access, to
support the density of the proposed project;

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(2)
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Preferably
be located on land zoned for residential use; provided that project sites that
have adequate infrastructure but are not zoned for residential use shall remain
eligible through the use of exemptions authorized under section 201H-38, Hawaii
Revised Statutes; and

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(3)
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Provide
at least fifty per cent of the housing units delivered under the project for
households having incomes between sixty per cent and one hundred forty per cent
of the area median income as determined by the United States Department of
Housing and Urban Development.

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(c)
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The corporation shall designate at least one Hawaii builds pilot project
in each county of the State to ensure statewide participation in the pilot
program.

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(d)
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Notwithstanding any provision of part III, subpart I, of chapter 201H,
Hawaii Revised Statutes, or any other law to the contrary, the corporation may
use moneys from the dwelling unit revolving fund for any Hawaii builds pilot
project; provided that dwelling unit revolving fund moneys may be expended for:

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(1)
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Predevelopment
activities, including land acquisition, architectural and engineering services,
environmental and due diligence studies, entitlement processing, and other
preparatory activities necessary to advance a project; and

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(2)
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Construction
equity, including short-term construction equity or equity investment, as deemed
appropriate by the corporation's board of directors.

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(e)
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Predevelopment activities under subsection (d)(1) shall not require
separate gubernatorial approval for each specific disbursement; provided that
the project has been designated and approved as a Hawaii builds pilot project
by the corporation's board of directors.

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(f)
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Any use of moneys from the dwelling unit revolving fund for construction
equity or equity investment under subsection (d)(2) shall be temporary in
nature and structured to ensure repayment or monetization to the dwelling unit
revolving fund.

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(g)
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Notwithstanding
any other law to the contrary, while the Hawaii builds program is active, the
corporation shall give the highest priority to Hawaii builds pilot projects
when allocating and disbursing moneys from the dwelling unit revolving fund.

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(h)
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The
executive director of the corporation may convene a Hawaii builds expedited review
team.
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The team shall consist of the
directors of relevant state and county agencies or their designees, including the
directors of the department of land and natural resources, department of
health, and each county's planning and public works departments.

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(i)
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Notwithstanding any other law to the contrary, all state and county
agencies shall cooperate with the corporation in processing Hawaii builds pilot
projects, including prioritizing the review of permits, licenses, and
entitlements for pilot projects above all other non-emergency applications.

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(j)
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Contracts
for professional services, construction, and development related to Hawaii
builds pilot projects shall be subject to approval by the corporation's board
of directors and shall be exempt from chapter 103D, Hawaii Revised Statutes.

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(k)
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The state historic preservation division shall complete its review of
any Hawaii builds pilot project application within sixty days of the receipt of
a completed application.
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If the division
fails to issue a determination within that period, the application shall be
deemed approved.

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(l)
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The department of health shall complete its review of hazard evaluation,
wastewater, and safe drinking water applications for Hawaii builds pilot
projects within sixty days.
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If
additional time is required to complete a review under this subsection, the
department of health shall provide written justification for the extension
before the sixty-day period expires.
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If
the department of health does not provide written justification, the
application shall be prioritized for immediate final action.

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(m)
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The
appropriate county planning director, or an equivalent official having jurisdiction
over permitting and exemptions, shall grant a Hawaii builds pilot project all
necessary exemptions from county ordinances and rules pursuant to section
201H-38, Hawaii Revised Statutes.
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Notwithstanding
any law, county charter provision, or ordinance to the contrary, an exemption
under this subsection shall not require approval by the county legislative
body.
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The processing of an exemption for
a Hawaii builds pilot project shall be deemed a ministerial act and shall be
completed within forty-five days of receipt by the planning director or
equivalent official.

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(n)
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The
authority of the corporation to designate new Hawaii builds pilot projects
under this section shall expire on June 30, 2031; provided that any project designated
as a Hawaii builds pilot project prior to July 1, 2031, shall continue to be
governed by this section until the completion of the project.

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(o)
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As used in this section, "corporation" means the Hawaii
housing finance and development corporation.

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SECTION 3.
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No later than twenty days prior to the convening of the regular sessions
of 2027, 2028, 2029, 2030, 2031, and 2032, the Hawaii housing finance and
development corporation shall submit to the legislature a report on the Hawaii
builds pilot program that includes:

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(1)
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A
list and descriptions of all Hawaii builds pilot projects designated, approved,
or advanced during the prior fiscal year;

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(2)
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The
amount and type of dwelling unit revolving fund moneys expended for predevelopment
activities and construction equity, including the status of repayment or
monetization;

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(3)
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The
number of housing units approved, under construction, and completed,
disaggregated by county and area median income category;

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(4)
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A
summary of interagency coordination efforts and the extent to which statutory
timelines were met;

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(5)
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Any
barriers encountered in project delivery, including statutory, regulatory, or
infrastructure constraints;

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(6)
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Recommendations
for any amendments to the pilot program and whether the pilot program should be
continued or terminated; and

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(7)
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Any
proposed legislation.

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SECTION 4.
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There is appropriated out of the dwelling unit revolving fund the sum of
$
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or so much thereof as may be
necessary for fiscal year 2026-2027 for the Hawaii builds pilot program.

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The sum appropriated shall be expended by
the Hawaii housing finance and development corporation for the purposes of this
Act.

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SECTION 5.
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This Act shall take effect on July 1, 2026.

INTRODUCED BY:

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Report Title:

Affordable
Housing; HHFDC; Pilot Program; Missing Middle Housing; Exemptions; Permit
Reviews; Interagency Coordination; Appropriation; Reports

Description:

Establishes
a 5-year Hawaii Builds Pilot Program within the Hawaii Housing Finance and
Development Corporation.
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Authorizes the
Corporation to deploy moneys from the dwelling unit revolving fund for
predevelopment activities or as active construction equity.
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Requires 50% of housing units made available
under pilot program projects for households having incomes between 60% and 140%
of the area median income.
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Mandates
interagency coordination and expedited review for projects to facilitate timely
delivery of projects.
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Requires annual reports
to the Legislature.
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Sunsets 6/30/2031.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.