HONOLULU – After a 23 year absence, the City and County of Honolulu is returning as an active issuer of tax-exempt special revenue bonds, or private activity bonds (PAB).
The PAB program is available to developers of projects having a minimum 20 percent of the total number of units targeted to households earning 50 percent or less of the area median income (AMI), or a minimum of 40 percent of the total number of units set aside to households earning 60 percent or less of the AMI.
Under the Internal Revenue Code, a municipality such as the City can use its private activity bond volume allocation to issue tax-exempt special revenue bonds, the proceeds of which a developer would use to construct or acquire and rehabilitate affordable rental units. The tax-exempt special revenue bonds are not secured by the City’s credit, instead the bonds are secured by the developer’s project.
“Affordable housing is a top priority for our administration and for the communities we serve,” said Mayor Rick Blangiardi. “Executing on that priority means a willingness to consider and try new approaches on regulations, city permitting processes, land acquisitions, and in this case, once again becoming an issuer of financial incentives for entities that are creating or preserving affordable housing on our island.”
The City is soliciting expressions of interest for its 2020 approximately $120M PAB volume cap. This will be a preliminary step for the City to understand the demand for private activity bonds.
Interested parties should review http://oneoahu.org/pab for a copy of the City’s PAB Rules, PAB Handbook, and the Tax-Exempt Affordable Housing Bond Program Expression of Interest Form.
Expression of Interest Forms will be accepted from the date of this notice through 4:30 p.m. Thursday, August 4, 2022.