STAND. COM. REP. NO.  60-18

Honolulu, Hawaii

                , 2018

RE:   H.B. No. 2575

      H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

     Your Committee on Housing, to which was referred H.B. No. 2575 entitled:

"A BILL FOR AN ACT RELATING TO AFFORDABLE HOUSING,"

begs leave to report as follows:

The purpose of this measure is to establish a system for statewide rent stabilization for dwelling units rented or designated for rent on or after July 1, 2018, in structures more than ten years old, including by:

(1)  Establishing a Rent Stabilization Office in the Department of Commerce and Consumer Affairs;

(2)  Prohibiting landlords from demanding or accepting rent in excess of the maximum allowable amount or taking specified actions to waive or circumvent the applicability of rent stabilization requirements;

(3)  Establishing methods for calculating allowable monthly rents, annual rent increases, security deposits, and temporary surcharges for capital expenditures, utility increases, and expenses required by law;

(4)  Requiring registration of a dwelling unit with the Department of Commerce and Consumer Affairs before any rent increase may become effective; and

(5)  Authorizing tenant enforcement of rent stabilization requirements through a civil action in district court and specifying damages recoverable and allocation of attorneys' fees and costs.

The Hawaii Housing Finance and Development Corporation and Hawaii Association of REALTORS testified in opposition to this measure.  The League of Women Voters offered comments to this measure.

     Your Committee finds that the State must strike a balance between keeping rental housing affordable for Hawaii's renters and making the provision of rental housing economically viable for landlords and housing developers.

     The testifiers in opposition noted this measure may adversely affect affordable housing projects and discourage new investment in rental housing. 

     Your Committee notes that while this measure will likely face opposition in the legislative process, further discussion may be beneficial. 

     Your Committee has amended this measure by:

     (1)  Making rent stabilization applicable to dwelling units in structures of more than an unspecified age;

     (2)  Deleting all provisions relating to a Rent Stabilization Office and required registration of dwelling units;

     (3)  Deleting all restrictions placed on rent amounts other than specifying a maximum permitted percentage for annual rent increases and deleting provisions for calculating allowable rents, deposits, and surcharges;

     (4)  Deleting the severability clause;

     (5)  Changing the effective date to January 1, 2050, to facilitate further discussion; and

     (6)  Making technical nonsubstantive amendments for the purpose of clarity and consistency.

     As affirmed by the record of votes of the members of your Committee on Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2575, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2575, H.D. 1, and be referred to your Committee on Consumer Protection & Commerce.

Respectfully submitted on behalf of the members of the Committee on Housing,

____________________________

TOM BROWER, Chair