Hawaii 2022 Regular Session

Hawaii Senate Bill SB903 Compare Versions

Only one version of the bill is available at this time.

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1	1	THE SENATE S.B. NO. 903 THIRTY-FIRST LEGISLATURE, 2021 STATE OF HAWAII A BILL FOR AN ACT RELATING TO AFFORDABLE HOUSING. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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3	3	THE SENATE S.B. NO. 903
4	4	THIRTY-FIRST LEGISLATURE, 2021
5	5	STATE OF HAWAII
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7	7	THE SENATE
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9	9	S.B. NO.
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11	11	903
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13	13	THIRTY-FIRST LEGISLATURE, 2021
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17	17	STATE OF HAWAII
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31	31	A BILL FOR AN ACT
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37	37	RELATING TO AFFORDABLE HOUSING.
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43	43	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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47	47	SECTION 1. The legislature finds that in most cases, landlords in Hawaii are able to increase the rent on rental units without much concern over whether the unit will sit vacant because of the scarcity of affordable housing. Even if a landlord's current tenant cannot afford the increased rent on a rental unit, there is likely another tenant willing to take the current tenant's place. While turnover in tenants as a result of increased rents benefits the landlords and property owners, it does not always benefit the community. Tenants who know that they could be priced out of their current residence have no incentive to invest in their community. If rents were stable and tenants could be assured that they would face only reasonable increases, then tenants may stay in their rental units longer and invest in the community around them. The legislature further finds that tenants need some semblance of housing security but landlords and property owners also need the ability to increase their rents by a reasonable amount. The legislature also finds that the policy of rent stabilization, which is distinct from a policy of rent control, could simultaneously respond to those opposing needs. The purpose of this Act is to: (1) Establish a rent stabilization law that will apply to all rental units located in structures that are over a certain age; (2) Establish a rent stabilization advisory working group; and (3) Require the legislative reference bureau to conduct a study of actions that other states have taken to incentivize landlords to stabilize rents. SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows: "Chapter RENT STABILIZATION § -1 Definitions. For purposes of this chapter, unless context requires otherwise: "Action" shall have the same meaning as in section 521-8. "Department" means the department of commerce and consumer affairs. "Director" means the director of commerce and consumer affairs. "Dwelling unit" shall have the same meaning as in section 521-8. "Family" includes a household of one. "Landlord" shall have the same meaning as in section 521‑8. "Owner" shall have the same meaning as in section 521‑8. "Rental agreement" shall have the same meaning as in section 521‑8. "Single family residence" shall have the same meaning as in section 521‑8. "Tenant" shall have the same meaning as in section 521‑8. § -2 Application. (a) The provisions of this chapter shall apply to all dwelling units that are designed for rental use or are rented, including dwelling units that are subleased by tenants at any time on or after July 1, 2021, except for dwelling units listed in subsection (b). (b) The provisions of this chapter shall not apply to: (1) A dwelling unit in a single family residence; provided that the single family residence does not rent more than dwelling units to families who are not related to the property owner by blood, marriage, or adoption; (2) Dwelling units located in a structure that is less than years old, except if: (A) The structure replaced a structure that provided dwelling units for rent; or (B) The tenants that rented dwelling units in the previous structure were evicted for the purpose of allowing the property owner to build the current structure; (3) Accommodations in hotels, motels, and inns that are primarily rented to guests for a period less than thirty days; provided that the same tenant has not occupied one or more of the dwelling units in a single structure for more than thirty consecutive days; (4) A dwelling unit that is owned, operated, or managed by a government unit, agency, or authority for purposes of providing housing to low-income, very low-income, or extremely low-income households; and (5) A dwelling unit in an institution that is monitored or licensed by the State and provides medical, geriatric, or educational services. § -3 Rent stabilization advisory working group; established. (a) There is established within the department for administrative purposes the rent stabilization advisory working group to advise the legislature, governor, and county agencies on matters relating to the stabilization of rental amounts for dwelling units that are designed for rental use or are rented, including: (1) Commencing January 1, 2022, recommending, on an annual basis, the percentage or dollar-amount adjustment to the rental amounts for dwelling units; (2) Limiting or restricting the grounds for evicting a tenant from a dwelling unit; (3) Preserving and increasing the number of dwelling units; (4) Encouraging the maintenance of dwelling units; (5) Recommending a rental amount that could be charged by a landlord and would be a fair return for the dwelling unit, including recommending a fair return amount for specified dwelling units; and (6) Providing information relating to dwelling units, including relevant laws, rent collection methods, and community services. (b) The membership of the rent stabilization advisory working group shall not exceed five members selected by the director of commerce and consumer affairs. The members shall include a representative from the department of the attorney general, renters, landlords, and other individuals who have expressed an interest in rent stabilization. The director, or director's designee, shall chair the working group. The members shall serve without compensation but shall be reimbursed for actual expenses, including travel expenses, that are necessary for the performance of their duties. § -4 Monthly rent increases. (a) A landlord of a dwelling unit that is subject to a rental agreement shall be permitted to increase a dwelling unit's monthly rent by a maximum of per cent at the end of the term of the rental agreement, or every twelve months, whichever is the longer period; provided that any increase in the monthly rent shall not be attributable to the landlord's negative cash flow: (1) As a result of refinancing the dwelling unit if, at the time the landlord refinanced the dwelling unit, the landlord could reasonably have foreseen a negative cash flow based on the existing rental agreement or the twelve-month limitation period; and (2) If, at the time the landlord acquired the dwelling unit, the landlord could reasonably have foreseen a negative cash flow based on the existing rental agreement or the twelve-month limitation period. The recalculated, increased monthly rent shall be in effect for a term established by the new rental agreement or twelve months, whichever is the longer period, and shall be the monthly rent used to calculate future rent increases. (b) A landlord shall be permitted to increase the monthly rent for a dwelling unit beyond the restrictions in subsection (a) after the dwelling unit is vacated by all tenants. There shall be no limit to the monthly rental amount that a landlord may charge for a dwelling unit following the vacancy of the dwelling unit by all tenants. § -5 Remedies. (a) A tenant or the department may file a civil action to enforce the provisions of this chapter. (b) A tenant may refuse to pay an increase in rent that is in violation of the provisions of this chapter, and the violation shall be a defense in any action brought to recover the possession of a dwelling unit or to collect rent. (c) Whenever it is necessary for a tenant of a dwelling unit to file a court action to recover the payment of rent that was in excess of the maximum lawful rent allowed by the provisions of this chapter, or whenever it is necessary for the tenant to defend against any wrongful action filed in court against the tenant by the landlord to recover the possession of the tenant's dwelling unit, the landlord shall be liable to the tenant for damages in the amount of $ or not more than three times the amount by which the payment demanded, accepted, received, or retained exceed the lawful amount of rent, whichever is more. The prevailing party in any suit shall be entitled to reasonable attorney's fees and costs as determined by the court." SECTION 3. (a) The legislative reference bureau shall conduct a study of any actions that other states have taken to incentivize landlords to stabilize rents. (b) The legislative reference bureau shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days before the convening of the regular session of 2022. SECTION 4. This Act shall take effect on July 1, 2021. INTRODUCED BY: _____________________________
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49	49	SECTION 1. The legislature finds that in most cases, landlords in Hawaii are able to increase the rent on rental units without much concern over whether the unit will sit vacant because of the scarcity of affordable housing. Even if a landlord's current tenant cannot afford the increased rent on a rental unit, there is likely another tenant willing to take the current tenant's place.
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51	51	While turnover in tenants as a result of increased rents benefits the landlords and property owners, it does not always benefit the community. Tenants who know that they could be priced out of their current residence have no incentive to invest in their community. If rents were stable and tenants could be assured that they would face only reasonable increases, then tenants may stay in their rental units longer and invest in the community around them.
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53	53	The legislature further finds that tenants need some semblance of housing security but landlords and property owners also need the ability to increase their rents by a reasonable amount. The legislature also finds that the policy of rent stabilization, which is distinct from a policy of rent control, could simultaneously respond to those opposing needs.
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55	55	The purpose of this Act is to:
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57	57	(1) Establish a rent stabilization law that will apply to all rental units located in structures that are over a certain age;
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59	59	(2) Establish a rent stabilization advisory working group; and
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61	61	(3) Require the legislative reference bureau to conduct a study of actions that other states have taken to incentivize landlords to stabilize rents.
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63	63	SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:
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65	65	"Chapter
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67	67	RENT STABILIZATION
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69	69	§ -1 Definitions. For purposes of this chapter, unless context requires otherwise:
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71	71	"Action" shall have the same meaning as in section 521-8.
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73	73	"Department" means the department of commerce and consumer affairs.
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75	75	"Director" means the director of commerce and consumer affairs.
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77	77	"Dwelling unit" shall have the same meaning as in section 521-8.
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79	79	"Family" includes a household of one.
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81	81	"Landlord" shall have the same meaning as in section 521‑8.
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83	83	"Owner" shall have the same meaning as in section 521‑8.
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85	85	"Rental agreement" shall have the same meaning as in section 521‑8.
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87	87	"Single family residence" shall have the same meaning as in section 521‑8.
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89	89	"Tenant" shall have the same meaning as in section 521‑8.
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91	91	§ -2 Application. (a) The provisions of this chapter shall apply to all dwelling units that are designed for rental use or are rented, including dwelling units that are subleased by tenants at any time on or after July 1, 2021, except for dwelling units listed in subsection (b).
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93	93	(b) The provisions of this chapter shall not apply to:
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95	95	(1) A dwelling unit in a single family residence; provided that the single family residence does not rent more than dwelling units to families who are not related to the property owner by blood, marriage, or adoption;
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97	97	(2) Dwelling units located in a structure that is less than years old, except if:
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99	99	(A) The structure replaced a structure that provided dwelling units for rent; or
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101	101	(B) The tenants that rented dwelling units in the previous structure were evicted for the purpose of allowing the property owner to build the current structure;
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103	103	(3) Accommodations in hotels, motels, and inns that are primarily rented to guests for a period less than thirty days; provided that the same tenant has not occupied one or more of the dwelling units in a single structure for more than thirty consecutive days;
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105	105	(4) A dwelling unit that is owned, operated, or managed by a government unit, agency, or authority for purposes of providing housing to low-income, very low-income, or extremely low-income households; and
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107	107	(5) A dwelling unit in an institution that is monitored or licensed by the State and provides medical, geriatric, or educational services.
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109	109	§ -3 Rent stabilization advisory working group; established. (a) There is established within the department for administrative purposes the rent stabilization advisory working group to advise the legislature, governor, and county agencies on matters relating to the stabilization of rental amounts for dwelling units that are designed for rental use or are rented, including:
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111	111	(1) Commencing January 1, 2022, recommending, on an annual basis, the percentage or dollar-amount adjustment to the rental amounts for dwelling units;
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113	113	(2) Limiting or restricting the grounds for evicting a tenant from a dwelling unit;
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115	115	(3) Preserving and increasing the number of dwelling units;
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117	117	(4) Encouraging the maintenance of dwelling units;
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119	119	(5) Recommending a rental amount that could be charged by a landlord and would be a fair return for the dwelling unit, including recommending a fair return amount for specified dwelling units; and
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121	121	(6) Providing information relating to dwelling units, including relevant laws, rent collection methods, and community services.
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123	123	(b) The membership of the rent stabilization advisory working group shall not exceed five members selected by the director of commerce and consumer affairs. The members shall include a representative from the department of the attorney general, renters, landlords, and other individuals who have expressed an interest in rent stabilization. The director, or director's designee, shall chair the working group.
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125	125	The members shall serve without compensation but shall be reimbursed for actual expenses, including travel expenses, that are necessary for the performance of their duties.
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127	127	§ -4 Monthly rent increases. (a) A landlord of a dwelling unit that is subject to a rental agreement shall be permitted to increase a dwelling unit's monthly rent by a maximum of per cent at the end of the term of the rental agreement, or every twelve months, whichever is the longer period; provided that any increase in the monthly rent shall not be attributable to the landlord's negative cash flow:
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129	129	(1) As a result of refinancing the dwelling unit if, at the time the landlord refinanced the dwelling unit, the landlord could reasonably have foreseen a negative cash flow based on the existing rental agreement or the twelve-month limitation period; and
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131	131	(2) If, at the time the landlord acquired the dwelling unit, the landlord could reasonably have foreseen a negative cash flow based on the existing rental agreement or the twelve-month limitation period.
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133	133	The recalculated, increased monthly rent shall be in effect for a term established by the new rental agreement or twelve months, whichever is the longer period, and shall be the monthly rent used to calculate future rent increases.
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135	135	(b) A landlord shall be permitted to increase the monthly rent for a dwelling unit beyond the restrictions in subsection (a) after the dwelling unit is vacated by all tenants. There shall be no limit to the monthly rental amount that a landlord may charge for a dwelling unit following the vacancy of the dwelling unit by all tenants.
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137	137	§ -5 Remedies. (a) A tenant or the department may file a civil action to enforce the provisions of this chapter.
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139	139	(b) A tenant may refuse to pay an increase in rent that is in violation of the provisions of this chapter, and the violation shall be a defense in any action brought to recover the possession of a dwelling unit or to collect rent.
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141	141	(c) Whenever it is necessary for a tenant of a dwelling unit to file a court action to recover the payment of rent that was in excess of the maximum lawful rent allowed by the provisions of this chapter, or whenever it is necessary for the tenant to defend against any wrongful action filed in court against the tenant by the landlord to recover the possession of the tenant's dwelling unit, the landlord shall be liable to the tenant for damages in the amount of $ or not more than three times the amount by which the payment demanded, accepted, received, or retained exceed the lawful amount of rent, whichever is more. The prevailing party in any suit shall be entitled to reasonable attorney's fees and costs as determined by the court."
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143	143	SECTION 3. (a) The legislative reference bureau shall conduct a study of any actions that other states have taken to incentivize landlords to stabilize rents.
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145	145	(b) The legislative reference bureau shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature no later than twenty days before the convening of the regular session of 2022.
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147	147	SECTION 4. This Act shall take effect on July 1, 2021.
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151	151	INTRODUCED BY: _____________________________
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153	153	INTRODUCED BY:
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155	155	_____________________________
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161	161	Report Title: Rent Stabilization; Rent Stabilization Advisory Working Group Description: Limits monthly rent increases for certain dwelling units to an unspecified per cent for the term of the rental agreement or every 12 months, whichever period is longer. Prohibits rent increases due to the landlord's negative cash flow resulting from refinancing or purchasing the rental dwelling unit. Establishes a rent stabilization advisory working group to advise on matters relating to the stabilization of certain dwelling unit rental amounts. Requires the legislative reference bureau to conduct a study on actions that other states have taken to incentivize landlords to stabilize rents. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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169	169	Rent Stabilization; Rent Stabilization Advisory Working Group
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173	173	Description:
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175	175	Limits monthly rent increases for certain dwelling units to an unspecified per cent for the term of the rental agreement or every 12 months, whichever period is longer. Prohibits rent increases due to the landlord's negative cash flow resulting from refinancing or purchasing the rental dwelling unit. Establishes a rent stabilization advisory working group to advise on matters relating to the stabilization of certain dwelling unit rental amounts. Requires the legislative reference bureau to conduct a study on actions that other states have taken to incentivize landlords to stabilize rents.
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183	183	The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.