State lawmakers in Hawaii are considering a controversial proposal to divert a state fund designated for low-income rental housing towards building apartments for residents with higher incomes. The bill, House Bill 432, aims to expand subsidized rental housing options for residents with incomes between 60% and 140% of a county’s annual median income, allowing for rents that can exceed $5,000 per month for a three-bedroom unit.
Proponents argue that this shift is necessary to address Hawaii’s high cost of housing and prevent the workforce from leaving the state. However, critics are concerned that the change could reduce funding for construction of low-income housing, leaving those in need without affordable options.
The Hawaii Housing Finance and Development Corporation (HHFDC) is behind the proposed change, seeking to allocate funds for mixed-income rental projects that cater to working families who earn too much to qualify for low-income housing tax credits but cannot afford market-priced homes. Advocates stress the importance of providing more subsidized housing for moderate-income residents who are struggling to afford housing in the state’s expensive market.
With high demand for affordable housing projects, developers are seeking approximately $1.1 billion from the fund to help finance 28 projects comprising about 4,000 low-income rental units. The bill also includes provisions for a “mixed-income subaccount” to support Tier II projects, which cater to households earning between 60% and 140% of the median income.
As the House and Senate work to reconcile different versions of the bill, stakeholders are hoping for a resolution that balances the needs of low-income and moderate-income residents while addressing Hawaii’s affordable housing crisis. The outcome of this legislation will have significant implications for the future of housing in the state.
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