Gov. Linda Lingle has signed two bills recently passed by the Legislature that aim to spur more development of affordable housing in Hawai'i.

But the measures, signed Thursday, aren't expected to lead to dramatically more construction of homes for low- to middle-income residents in the near term.

One bill increases the amount of tax-exempt Hula Mae bonds from $400 million to $500 million available to developers of multi-family affordable housing through the Hawai'i Housing Finance and Development Corp., a state agency.

Under the bond financing program, projects must set aside 20 percent of units for tenants earning less than 50 percent of the median income, or 40 percent of units for tenants earning less than 60 percent of the median income.

The higher bond ceiling will allow more developers to participate in the program, though since the program's inception in 1981 a total of $250 million in bond financing has been tapped, including seven completed projects comprising 1,133 units and five planned projects comprising 829 units.

Qualified projects can be new construction or the rehabilitation or preservation of existing affordable housing, such as Kukui Gardens, which is a pending Hula Mae bond program user.

The Hula Mae program has been used to to finance a variety of affordable housing projects over the years, including the Kahului Town Terrace on Maui and Ewa Villages on O'ahu, and the Ainakea Senior Residences on the Big Island.

Legislators in a conference committee killed other provisions in the bill, Senate Bill 3174, that were aimed at increasing affordable housing, including establishing a self-help housing fund under the HHFDC and continuing to pump 50 percent of property conveyance tax revenues into the agency's Rental Housing Trust Fund for five more years.

The share of conveyance taxes going into the rental housing fund was increased from 30 percent to 50 percent in 2006, but the boost will lapse June 30. The HHFDC had supported extending the higher funding to 2013.

The other bill signed by Lingle, Senate Bill 2293, has a limited scope affecting affordable-housing development, and by one assessment could discourage affordable-housing construction.

SB 2293 initially was drafted to relax buyer rules for new high-density affordable housing, and would have applied to projects built as a condition for zoning approvals, built to gain expedited permitting or built with public financing or public land.

Under longstanding rules, state and county agencies have the right to buy back such affordable units if the buyer sells the property within 10 years, and are also entitled to share any appreciation in the home's value.

The bill proposed to reduce the buy-back provision to three years, eliminate shared appreciation and would have allowed buyers to rent out their units after three years.

The HHFDC opposed the bill on grounds that it would lead to the loss of long-term affordable housing. County officials also testified that the measure would supercede county affordable housing rules.

The bill signed into law was amended to apply the relaxed buyer rules only to affordable housing projects that aren't a condition for zoning approvals or don't involve public financing or public land, which excludes most affordable housing projects in Hawai'i.

The bill also applies only to projects with at least 75 units per acre.

Janice Takahashi, HHFDC interim executive director, said she's not aware of any existing affordable housing projects to which the new law would apply if the law applied to existing, instead of only new, projects.

Henry Eng, director of the city Department of Planning and Permitting, testified that the bill would discourage high-density affordable housing in general by adding a three-year occupancy requirement and sale restriction to privately financed affordable housing not mandated by the government.

One ups Hula Mae bonds, other relaxes buyer rules