The Dwelling Unit Revolving Fund (DURF) is the Hawaii Housing and Finance Development Corporation’s (HHFDC) revolving fund. One of the ways it is primarily known to be used is by providing developers with interim construction loans for development of for-sale and for-rent housing projects. However, when DURF was initially established in 1970 by Act 105, it provided for the then-Hawaii Housing Authority to use the funds by any means necessary, essentially, to provide “reasonable priced housing in Hawaii.”
DURF may be used for the following, according to HHFDC:
The DURF application for interim construction loans utilizes HHFDC’s Consolidated Application for Financing.
The Hawaii Community Development Authority (HCDA) is a Hawaii State agency established by the State Legislature in 1976 as “a way to plan for the future development of underutilized urban areas of Hawaii,” deemed “community development districts.” This re-development agency is tasked with improving “substantially undeveloped, blighted, or economically depressed areas in the State in the need to renewal, renovation or improvement,” according to the 2021 HCDA Annual Report.
HCDA is governed by a board, composed of ex-officio members (who lead other related government entities), community members and at-large members. HCDA also has an executive director and a small staff.
Through collaboration with private enterprises, public development agencies, and regulations and creation and implementation of long-range development plans, HCDA has facilitated the development of four community development districts, established by the Legislature:
HCDA also has a Reserved Housing program, requiring at least 20 percent of new Kaka‘ako residential units, either for sale or for rent, to be set aside for Hawaii residents earning between 80-140% of the area median income (AMI). Restrictions for the Reserved Housing program include living in the condominium for a minimum amount of time and, if the unit is sold, sharing some of the increased equity proceeds with HCDA, to go back to the Reserved Housing program.
The Hawaii Housing Finance & Development Corporation (HHFDC) is a public agency tasked with developing and financing affordable housing projects, particularly for low- and moderate- income families, and administering homeownership programs. The current agency evolved from the Hawaii Housing Authority (HHA), which was created in 1935 “by the Territorial Legislature to provide safe and sanitary housing for low-income residents of Hawaii,” according to the HHFDC website. Since 2006 the Hawaii Public Housing Authority (HPHA), which manages some federal and state housing programs (Section 8 and senior housing) has been operating separately from HHFDC. HHFDC is governed by a Board of Directors, which appoints an executive director as well as an executive assistant.
The following are some of HHFDC’s special affordable housing development projects:
In addition to HHFDC’s own development projects, the agency facilities several financing programs for developers, such as the Low-Income Housing Tax Credit Program (LIHTC), the Dwelling Unit Revolving Fund (DURF), the Hula Mae Multi-Family (HMMF) Revenue Bond Program, and the Rental Housing Revolving Fund (RHRF) Program.
HHFDC is also tasked with administering some federal housing programs: the HOME Investment Partnership Program (HOME), the Housing Trust Fund (HTF), and the Neighborhood Stabilization Program (NSP). For first-time homebuyers, HHFDC is the issuer of federal Mortgage Credit Certificates (MCC).
The Low-Income Housing Tax Credit (LIHTC) Program is a financing tool available to private developers and non-profit organizations who build or rehabilitate affordable rental units. It was created in 1986 by the federal Tax Reform Act. HHFDC awards both the federal and state tax credits in Hawaii. The federal tax credit can be utilized for 10 years and the state tax credit, which is equal to 50% of the federal LIHTC, can be deducted from income tax liabilities for 5 years.
To qualify for LIHTC, the following minimum requirements must be met:
The LIHTC application utilizes HHFDC’s Consolidated Application for Financing, which has several components and ranks LIHTC project applications based on a point system. Some of the components include a market study of the housing needs of low-income individuals in the proposed project area, a cost estimate with the contractor not profiting more than 14% of hard construction costs, and an Environmental Assessment.
The State of Hawaii’s Rental Housing Revolving Fund (RHRF) Program provides loans for the development, pre-development, construction, acquisition, preservation or rehabilitation of rental housing units, with the primary goal being to assist lower income families. First created by the State Legislature in 1992 as the Rental Housing Trust Fund Program, it was reclassified as the RHRF in July 2015. RHRF’s guidelines, policies and procedures were developed by HHFDC, which also evaluates projects and awards loans, based on funding availability and the Governor’s approval.
RHRF prioritizes funding based on the following minimum affordability criteria:
The RHRF application utilizes HHFDC’s Consolidated Application for Financing, which has several components and ranks RHRF project applications based on a point system. HHFDC states that successful applications will include descriptions of the local housing need, the project and its design, the project’s benefits and impacts, the management of the project, and “the degree to which the applicant is able to leverage limited resources.”
The Hula Mae Multi-Family (HMMF) Program sells tax-exempt, below-market interest rate revenue bonds for interim and/or permanent financing of the development or rehabilitation of rental housing. HHFDC issues the bonds for this federal program, subject to the “Private Activity volume cap by the State’s Director of Finance and the approval of the Governor of the State of Hawaii,” according to the HHFDC website.
To qualify for HMMF, the following minimum requirements must be met:
The HMMF application utilizes HHFDC’s Consolidated Application for Financing, which has several components and ranks HMMF project applications based on a point system. Some of the components include a market study of the housing needs of low-income individuals in the proposed project area and evidence of site control.
Transit-Oriented Development (TOD) refers primarily to the urban, mixed-use development of the immediate neighborhoods around the Honolulu rail stations (specifically, within ¼ to ½ mile, or a five- to ten-minute walk, of a rail station). The TOD program is a division of the City and County of Honolulu Department of Planning and Permitting (DPP), which has collaborated with citizens, landowners, businesses and community organizations to develop plans for each of the TOD neighborhoods:
It is expected that most TOD will be constructed by private developers on privately owned land. The City and County of Honolulu has approved mixed-use zoning and additional height and/or density ratios to incentivize developers to provide community benefits, such as affordable housing, infrastructure improvements or public parks/plazas. Projects that have been constructed under TOD are Azure and The Sky condominium buildings in the Ala Moana neighborhood.
The City and County of Honolulu also plans to improve transit in the rail neighborhoods through constructing sidewalks, bicycle facilities and bus transit connections, in addition to investing over $1.5 billion in infrastructure, such as wastewater, water, drainage, and parks – to allow for the anticipated population growth.
The State of Hawaii also established the Hawaii Interagency Council for Transit-Oriented Development (TOD Council) under the Office of Planning and Sustainable Development (OPSD), enacted in June 2016. Since the State of Hawaii is the largest landowner along the 20-mile Honolulu rail (owning around 2,000 acres of land), the TOD Council is tasked with developing and implementing a State strategic plan for TOD, including mixed-use and affordable housing projects. They also oversee TOD projects on Neighbor Islands, with the aim of encouraging mixed-use, “vibrant” development in urban or rural neighborhoods.