A bill aimed at boosting local homeownership and affordable rentals through state-funded county acquisitions of voluntary deed restrictions has stalled in the Senate Housing Committee and will not advance this legislative session, which ends Friday.

However, during its regular meeting Friday, the Maui County Council will consider its own legislation to use voluntary deed restrictions to pave the way for affordable housing.

House Bill 739 House Draft 2 proposed establishing the Kamaʻāina Homes Program within the Hawaiʻi Housing Finance and Development Corp. to provide state funds for counties to purchase voluntary deed restrictions. These restrictions would ensure homes are occupied by owner-occupants or resident tenants who live and work in Hawaiʻi.

Senate Housing Committee Vice Chair Troy Hashimoto (Wailuku, Kahului, Waihe‘e, Waikapu Mauka, Wai‘ehu) said Tuesday that counties already possess the authority to implement such programs independently.

“The state is not interested in outright grants,” he said, preferring loan programs that offer longer-term assistance rather than a “golden ticket” for a single family. He also expressed concern about the potential for confusion with state funds driving county-owned deed restrictions.

During its Friday meeting, the County Council will take up Bill 57, which would create a voluntary deed restriction program in the Maui County Code. The measure is up for the first of two readings.

The County measure would “enable open-market homes to be converted to deed-restricted properties, preserving the properties for local residents and the workforce while addressing the growing housing challenges in Maui County.”

The bill calls for using the Homeowner Programs Revolving Fund to promote long-term housing affordability. The Voluntary Deed Restriction Program may be structured to provide a payment toward the purchase price of a home in exchange for buyers agreeing to record a price-capped or resident-occupied deed restriction on the property.

Central Maui Rep. Tyson Miyake (portion of Waiehu, Paukūkalo, Wailuku, Wailuku Heights, Waikapū, Hyashi Village), a co-introducer of House Bill 739, modeled it after Vail, Colorado’s InDEED program. Since 2018, Vail’s voluntary initiative has secured over 1,000 deed-restricted homes for local workers.

HHFDC Executive Director Dean Minakami explained the bill would have created a Dwelling Unit Revolving Fund for counties to purchase the deed restrictions. He emphasized that local buyers often compete with out-of-state buyers seeking second homes, driving up prices and reducing available housing for residents. Minakami said that the program would “create an inventory of homes reserved for local residents, stabilize prices, and reduce speculation in our housing market.”

Kevin Auger, director of Honolulu’s Office of Housing, supported the bill’s intent but raised concerns about the city’s capacity to manage such a large-scale program compared to Vail, which had a resident population of 4,521 as of 2023. Oʻahu has nearly 1 million residents.

Auger cited potential difficulties with staffing, funding for administration and enforcement, impacts on property tax revenues, and the overall effectiveness in Oʻahu’s urban area, more than 220 times larger than Vail’s. Auger noted the bill mandates counties to handle administration and compliance without a dedicated funding source for these ongoing responsibilities. He also questioned if the revolving funds could be used for administrative costs.

Micah Kāne, chief executive officer of the Hawaiʻi Community Foundation, strongly supported the program, highlighting that Hawaiʻi’s housing costs are over 2.7 times the national average, leading to a “crisis level” demand for local housing and a record outmigration.

“Too many people who do not live or work in Hawai‘i are owning and driving up the costs of our housing market, which contributes to a record outmigration of local residents,” Kāne said. “The agony of this dynamic is punctuated by the fact that more Hawaiians now live out of Hawaiʻi than in Hawaiʻi.”

Kāne said he believed the Kamaʻāina Homes Program could be “one part of the solution” to help local families compete in the housing market, especially if coupled with efforts to lower construction costs.

Public testimony overwhelmingly favored the bill’s passage.

Osa Tui Jr., president of the Hawaiʻi State Teachers Association, pointed out that the average home price exceeding $800,000 is unattainable for most working residents, contributing to the outmigration of essential workers like teachers. He emphasized the crisis’s impact on families and the departure of Native Hawaiians seeking more affordable living.

Sunshine Topping said: “It is rare to be at a local gathering nowadays and not hear someone comment that they, or their family member or friend, are considering moving to the continent because they were unable to find housing in Hawaiʻi.”

She warned that the outmigration of island residents is separating families and leaving communities without teachers, caregivers and first responders, for example. Younger generations see no path to homeownership in Hawaiʻi, squeezed out by wealthy out-of-state buyers, she said.

The Kamaʻāina Homes Program offered “a framework to mitigate this housing and cultural crisis,” Topping said.