How builders can transfer extra affordable housing credits

(a) Developers who construct new affordable housing units in excess of any requirements imposed under this chapter or any other requirement may earn “excess credits” which they may transfer to other developers. (b) The developer shall earn the excess credits pursuant to section 11-5(c). (c) To qualify for excess credits, units must be sold or rented to qualified households. The developer shall apply to the administrator for approval of the excess credits. (d) After approval of the excess credits, the developer may transfer the excess credits to any other project that is within the distance established in section 11-5(a)(3), to fulfill part or all of the affordable housing requirements of the other project. The developer shall obtain approval for the transfer of excess credits from the housing administrator before initiating any such transfer. The housing administrator shall validate any such transfer of excess credits upon completion of the transaction. Excess credits that are transferred in violation of this section are voidable at the discretion of the County. Intentionally left blank. SUPP. 16 (7-2024) 11-8.2 HOUSING §11-15 (e) If the project applying for the excess credits was developed with a direct subsidy from the federal, state, or county governments, the administrator shall either (1) discount the excess credits earned by the value of the subsidy, or (2) require that the Agency or other public entity subsidizing the project share equitably in the proceeds from the transfer of the excess credits. If the project was developed by a nonprofit corporation and sold to qualified households earning not more than 80% of the median, or rented to qualified households earning not more than 60% of the median, the discount shall not exceed 50% of the credits. The administrator may waive these requirements if the project earning the excess credits addresses a critical housing need and the excess credits, in addition to the direct subsidy, are or were a necessary inducement to the construction of the project, or if the excess credits are earned by a nonprofit entity that will use the proceeds for the construction of more affordable housing. (f) For the purposes of this section, a “direct financial subsidy” includes the provision of land at below market value, or governmental construction of infrastructure necessary for a housing project, but does not include density bonuses, zoning or other permitting exemptions under section 201G-118, Hawai‘i Revised Statutes, or federal or state tax credits for the construction of rental housing. (2005, ord 05-23, sec 2; am 2005, ord 05-111, sec 4; am 2024, ord 24-18, sec 1.)11-15