HOUSE OF REPRESENTATIVES

H.B. NO.

865

TWENTY-EIGHTH LEGISLATURE, 2015

H.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO HOUSING.

 

 

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

 


     SECTION 1.  The legislature finds that the rising cost of real estate is causing many local renters to be priced out of the housing market.  First time homebuyers from low- and moderate-income families who cannot afford Hawaii's prices are increasingly moving and purchasing homes on the mainland.

     The legislature also finds that a community land trust, as a nonprofit housing agency, could help to reduce the cost of homeownership for low- and moderate-income homebuyers.  Homebuyers participating in such a trust would purchase homes at a reduced price and in exchange would agree that the homes would be resold at a restricted price in the future to preserve permanent affordability.  Through a legal agreement with the homeowner, the community land trust separates title to the land from title to the house, thereby selling the house to an income-qualified buyer at a below-market price, retaining ownership of the land in trust, and leasing the land to the homeowner.

     The purpose of this Act is to establish a community land trust for the purpose of selling homes to low- and moderate-income homebuyers.  The legislature notes that, given the distinctive island cultures in Hawaii, a strong local representation within the leadership structure of the community land trust will be critical to address questions regarding governance, accountability, and decision-making authority.

     SECTION 2.  Chapter 201H, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§201H-    Community land trust.  (a)  The corporation may establish a community land trust for the purpose of selling homes to low- and moderate-income homebuyers.

     (b)  The community land trust may hold title to land and lease land to members of low- or moderate-income households; provided that:

     (1)  The lease shall be designed to preserve long-term affordable housing on the land;

     (2)  The terms of the lease shall give the community land trust the first option to purchase any structural improvement placed on the land; and

     (3)  The lease may have an initial term of not more than ninety-nine years.

     (c)  The community land trust shall be a member-based organization and reserve core mission decisions for the members.

     (d)  The community land trust may:

     (1)  Adopt, amend, and repeal bylaws governing the conduct of its business;

     (2)  Execute, in accordance with its bylaws, all instruments necessary or appropriate in the exercise of its powers;

     (3)  Acquire property for future development pursuant to this section;

     (4)  Buy and sell homes and related structures pursuant to this section; and

     (5)  Receive moneys from donations, membership fees, the State, the counties, or the federal government.

     (e)  For purposes of this section, "community land trust" means a nonprofit organization that:

     (1)  Acquires parcels of land, held in perpetuity, primarily for conveyance under long-term ground leases;

     (2)  Transfers ownership of any structural improvements located on leased parcels to the lessees;

     (3)  Has its corporate membership open to any adult resident of the particular geographic area specified in the organization's bylaws;

     (4)  Retains a first option to purchase any structural improvement at a price determined by formula that is designed to ensure that the improvement remains affordable to low- and moderate-income households; and

     (5)  Is governed by a board of directors that:

         (A)  Includes a majority of members who are elected by the corporate membership; and

         (B)  Is composed of equal numbers of lessees, corporate members who are not lessees, and any other category of persons described in the bylaws of the organization."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2050.


 


 

Report Title:

HHFDC; Community Land Trust; Affordable Housing

 

Description:

Authorizes HHFDC to establish a community land trust for the purpose of selling homes through long-term land leases to low- and moderate-income homebuyers. (HB865 HD1)

 

 

 

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