Bill Text: HI HB2226 | 2020 | Regular Session | Introduced

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Bill Title: Relating To Affordable Housing.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2020-01-30 - The committee(s) on HSG recommend(s) that the measure be deferred. [HB2226 Detail]

Download: Hawaii-2020-HB2226-Introduced.html

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HOUSE OF REPRESENTATIVES	H.B. NO.	2226
THIRTIETH LEGISLATURE, 2020
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to affordable housing.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     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 establish:

     (1)  A rent stabilization law that will apply to all rental units located in structures that are over a certain age; and

     (2)  The rent stabilization advisory working group.

     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, 2020, 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 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, 2021, 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 subject to a rental agreement shall be permitted to increase a dwelling unit's monthly rent by a maximum
of thirty per cent at the end of the term of the rental agreement, or every twelve months, whichever is the longer period; provided that:

     (1)  Any increase in the monthly rent shall not be attributable to the landlord's negative cash flow 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)  Any increase in the monthly rent shall not be attributable to the landlord's negative cash flow 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 for 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 such 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 such suit shall be entitled to reasonable attorney's fees and costs as determined by the court."

     SECTION 3.  This Act shall take effect on January 1, 2021.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Rent Stabilization; Rent Stabilization Advisory Working Group

 

Description:

Limits monthly rent increases for certain dwelling units to 30 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.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.