HomeMy WebLinkAboutCOM 0108.004 2010-2012 HAWAII ISLAND COMMUNITY DEVELOPMENT CORPORATION PICOUN L
100 PAUAHI STREET, SUITE 204 • HILO, HAWAII 96720 C(,)mtil. i0e)
Testimony on Bill No. 28 Relating to Chapter 11 (Affordable Housinz Policy)
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While we believe there are important concerns that prompted the drafting of this bill, we
would like to inform the council that the proposal would have negative impacts our self
help housing and senior rentals programs. .
To date, HICDC has assisted 244 low and very low income families on the Big Island
attain homeownership through the self help housing program, and two (2) moderate
income households.
We have also developed 188 affordable rental units for low and very low income seniors.
HICDC works with the USDA Rural Development Section 502 loan program to secure
mortgages for most of our self help builders. These mortgages have subsidized interest
rates, require no down payment, and are tailored to the self help housing program. These
mortgages are restricted to households at 50% and 80% of the AMI and below.
Bill No. 28 would be applicable to our projects that go through the rezoning process.
Under the proposal we would be required to construct homes in other income groups, i.e.,
80 -100% AMI and 100 -120% AMI, where qualifying people with no subsidy available is
very difficult and there is a lot less interest because of that. The result would be that the
primary program for supplying home ownership for 80% of the AMI and below would be
stalled and drastically reduced — perhaps to the point of elimination.
Similarly, the 188 senior rentals that we have developed are all income restricted with the
upper end being 60 percent of the AMI. The proposal as it now stands would require the
construction of units for higher income groups for which funds are not available and thus
stymie our on -going program addressing the needs of low and very low income seniors.
The resale proposal that requires subsequent buyers of affordable homes to be at the same
or lower median income percentage would create problems for our self help builders
should they need to move. The ability of prospective low and very low income resale
buyers to qualify for conventional mortgages is extremely limited and would essentially
trap our self help builders in that home for 10 years.
Further, the resale requirement may not be accepted by mortgage lenders. We have asked
Rural Development whether this provision would be acceptable, however, we have not
yet received a response from them. Should Rural Development not accept this
requirement the primary financing source for low and very low income self help builders
would be eliminated and the program would end.
Should the council wish to proceed with this bill we suggest two changes: first, that the
lower limits on the income ranges for the affordable housing percentage requirements be
removed and, secondly, that the resale requirement be deleted in favor of the current buy
back provision that has been accepted by lenders.
Comm No.
Ref. To: PreseO&4 C ffy
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