A bill relating to the public sale of foreclosed homes in the wake of natural disasters or economic crises passed third reading 25-0 in the Senate and crossed over to the state House of Representatives on Tuesday.

A companion bill, House Bill 467 House Draft 1, was referred to the House Judiciary & Hawaiian Affairs Committee, chaired by Rep. David Tarnas of Hawaiʻi Island, but it has not moved on from there.

Senate Bill 332 Senate Draft 1 would prohibit sellers of foreclosed homes from bundling properties at a public sale. Instead, each foreclosed home would be sold separately. The legislation specifies that the sale of a foreclosed property is not final until either 15 days after the public sale; or 45 days if an eligible bidder submits a subsequent bill or written notice of intent to submit a subsequent bid.

“Natural disasters and other economic crises can often lead homeowners to default on their mortgage payments, resulting in a wave of foreclosures,” the bill’s legislative finding says. “Previous foreclosure crises have resulted in the replacement of owner-occupied homes with investor-owned rentals, prolonged vacancies and unmaintained residential properties. As climate-related crises become more intense and frequent, and as housing cost burdens increase for low- to moderate-income homeowners, the Legislature believes it is necessary to ensure that foreclosed homes are not lost to second homebuyers or residential investors.”

A report submitted by Judiciary Committee Chairman Karl Rhoads says that “some investors exploit foreclosure crises to purchase foreclosed properties at the expense of local families.  Accordingly, this measure prohibits the bulk sale of foreclosed properties, thereby providing residents with a better chance to submit more competitive offers to purchase a foreclosed property.”

Lahaina Strong submitted public testimony in favor of the bill.

The bill “addresses the urgent need to protect local residents from the devastating impacts of a looming foreclosure crisis on Maui,” Lahaina Strong wrote. “With the foreclosure moratorium ending, our community is facing another wave of grief as the economic impacts of the August 8th wildfire continue to unfold. Without intervention, disaster capitalism threatens to exploit this crisis, allowing outside investors to purchase foreclosed properties and profit at the expense of local families.”

“By requiring individual property auctions, local residents have a fairer chance to submit competitive offers,” the organization said. “Bundled auctions only benefit investors, shutting out families who want to rebuild and remain in their community.”

“When paired with the work of community land trusts, this measure can help create a pool of permanently affordable housing for local residents and generational families in Lahaina,” Lahaina Strong said.

On Feb. 21, the Maui County Council approved providing up to $5 million to the Lahaina Community Land Trust. The money would come from the County’s Managed Retreat Revolving Fund to property acquisition by the trust, giving Lahaina landowners who need to sell an option to keep wildfire-impacted lands in resident ownership and resist offers from outside investors.

Makana Hicks-Goo, organizer of LIMBY (Locals In My Backyard) Hawaiʻi, also supported the bill, saying it would provide owner-occupants and local nonprofits a sort of “right of refusal,” and substantially increase the prospects for local homeownership at lower prices.

Members of the LIMBY group, a hui of concerned kamaʻāina and kānaka working to help develop solutions to our state’s housing crisis, “are concerned that NIMBYism has driven up costs and driven our friends and families out by opposing all development. We are equally concerned that the apparent answer to this, YIMBYism, insists that anything resembling true affordability is impossible so instead they promote building housing that gets bought by overseas investors. We know we won’t solve our housing woes without building more, but we won’t solve them by simply building more.”

“The true solution is to create a housing market for locals: one that houses locals first, is tied to local wages, and is managed in trust,” the group said. “The future for kamaʻāina and kānaka will be LIMBY or Las Vegas.”

Lahaina native and certified mortgage planning specialist Tera Paleka said she lost her mortgage brokerage business in the Lahaina wildfire and supports the bill as being “crucial in protecting local families from displacement as Maui faces an impending foreclosure crisis.”

“Many (Maui residents) are struggling to pay rent while worrying about their future when the foreclosure moratorium lifts,” Paleka said. “Families are being separated because landlords cannot accommodate everyone in smaller condos and homes. This additional emotional and physical stress often leads to substance abuse, domestic violence, and, in some heartbreaking cases, suicide. Hawaiʻi has been grappling with high suicide rates, and the recent events have only exacerbated this crisis.”

Even before the 2023 wildfires, local families were struggling to stay afloat, she said. Now, with the foreclosure moratorium ending, wildfire survivors are at risk of losing properties that have been in their families for generations.

“The disaster has compounded their grief, financial ruin and collective trauma,” Paleka said. “As someone known as the ‘Local Lender,’ who has financed many of the fire victims’ homes, I am deeply immersed in their struggles. I receive numerous calls, emails and texts filled with questions, tears and frustration from families uncertain about their future. This bill is one of the most critical measures I implore you to enact promptly.”

“Without intervention, disaster capitalism will exploit this crisis, pushing local families out while outside investors profit,” she said.

The bill was introduced by Senate Housing Committee Chair Stanley Chang, who represents East Honolulu. Central Maui Sen. Troy Hashimoto is vice chair of that committee.

The Senate Committee on Public Safety and Military Affairs (PSM) chaired by Senator Brandon Elefante (Senate District 16 – ‘Aiea, ‘Aiea Heights, Hālawa, Pearlridge, Newtown, Royal Summit, Waimalu, Waiau, Momilani, Pacific Palisades, and Pearl City) has been pushing forward key bills to tackle the ongoing issue of illegal fireworks in Hawai‘i.

Through these legislative efforts, lawmakers aim to reduce the dangers posed by illegal fireworks and hold accountable those responsible for illegal activity.

SB 222 SD1 – relating to fireworks provides funding for the current Illegal Fireworks Task Force and extends its operation period which was scheduled to end on June 30, 2025, for another five years through June 30, 2030. It passed through the Senate last week and is now with the House.

SB 227 SD1 – relating to fireworks establishes and provides funding for the Illegal Fireworks Enforcement Division within the Department of Law Enforcement, which would work in tandem with the existing Illegal Fireworks Task Force. It passed Third Reading on the Senate Floor today.

SB 1324 SD2 – relating to fireworks, a bill that is part of the Governor’s package with strong support from the Department of the Attorney General, aims to strengthen fireworks safety laws. It includes tougher penalties for fireworks offenses, especially if someone is injured or killed as a result. The bill introduces new criminal offenses related to illegal fireworks use, including sending or receiving fireworks by air, distributing them to people without permits, and other safety violations. It also establishes a system to handle fireworks-related infractions and allocates funding for enforcement. This bill also passed Third Reading today.

“These measures are vital steps in enhancing the safety and security of our communities,” said Elefante. “By strengthening enforcement and increasing penalties for illegal fireworks, we are taking proactive action to prevent harm and protect our residents. The extension of the Illegal Fireworks Task Force and the proposed Enforcement Division will ensure that our laws are being upheld, and that those who break them face the consequences they deserve. We must continue to prioritize the safety of our people, and these bills are a key part of that commitment.”

“These bills will ensure that the State and County law enforcement agencies have the resources and laws necessary to tackle this very important issue,” said Department of Law Enforcement (DLE) Director Mike Lambert. “Fireworks enforcement is critical in ensuring community safety.”

Hawaii has a housing crisis that needs no introduction. If you were born here, chances are you were born with it: mentions of our housing crisis started popping up in local papers in the 1930s.

Nearly a hundred years on, we’re still trying to sort it out. These days the refrain you’re likely to hear is that it’s simply a matter of supply and demand. By which it’s always meant just supply — concerns about demand are gauche.

Supply is the hot topic. Indeed our housing crisis is often described flatly as a “housing shortage.” The conventional wisdom stops here claiming that if we increase supply prices will fall.

It’s true that we’ve seen the dire consequences of not building enough. In the 40 years since 1980 production has lagged and home prices (adjusting for inflation) have risen by 161%, according to Census data.

But it’s hard to argue that we’ve never built enough. In the 40 years between 1940 and 1980, we built more homes than the rest of the U.S. on a per capita basis. Units per capita increased by 62%, our housing stock by 268%. The results were equally bad as when we didn’t build: home prices rose by 510%, adjusting for inflation.

It seems whether we build or don’t, in Hawaii prices rise. This really shouldn’t be surprising. Everyone engaged in building homes in Hawaii benefits when prices go up, and they’re good at their job.

The solution to this problem isn’t in the debate we see play out constantly between NIMBYs and YIMBYs (“not in my backyard” and “yes in my back yard”); both have had their crack at the problem. It’s instead something quite different, rooted in how property markets actually work, and our actual problems. Let’s call it LIMBY — locals in my backyard.

LIMBYs know we need supply, but think it’s ridiculous to ignore the other side of pricing: demand. LIMBYs also think it’s silly to ignore how markets work and how land is priced to guarantee a return on investment determined more by Wall Street’s requirements than by local incomes.

The solution that works through these tangled problems, that can better leverage public investment in housing, that can build a housing market tied to local incomes, is a land trust and limited-profit developers.

Land trusts provide a ready mechanism to eliminate land speculation and thereby limit price increases. A limited-profit developer creates competition in the market to price development as a simple percentage of gross costs rather than a return on investment set by capital markets.

These aren’t untested ideas. Land trusts underpin affordable housing across the globe — most notably in Vermont. Limited-profit developers are critical for housing development in Singapore and Austria.

A raft of other changes are needed to shore up things now and help us build that market. State Sen. Stanley Chang has pending legislation to retool our state financing programs, which are currently giveaways to well-connected developers. Chang wants programs to direct developers toward actually affordable housing, and we agree.

State Rep. Tina Grandinetti has introduced a slew of bills to make sure tenants in naturally affordable housing are protected — and they should be. State Rep. Amy Perruso and state Sen. Les Ihara have introduced legislation to study how to better create a housing market for locals, using state resources and trusts based on ideas from local developer Peter Savio.

Hawaii ought to be a place where you are more likely to make it here if you were grown here. As our housing crisis has steadily gotten worse, you’re now more likely to own a home in Hawaii if you were flown here. Creating a housing market for locals is the only path forward.