SB1056

SECTION 1. The legislature acknowledges that according to the American Community Survey (ACS), median rent in Hawaii was $1,868 in 2022, the highest in the nation and $600 more than the national average. This has serious impacts on economic and housing security for the approximately forty per cent of Hawaii households who rent. According to university of Hawaii economic research organization, in 2024, roughly fifty-six per cent of renters were rent burdened, meaning they spend more than thirty per cent of their income on rent. Of those rent burdened households, twenty-eight per cent were severely burdened, meaning that they spend more than half of the income on rent.

The legislature finds that average rents rose roughly eleven per cent between April 2023 and April 2024, with some markets experiencing much more drastic and disruptive increases. Unexpected and drastic rent increases can be highly detrimental to the financial stability and housing security of tenants, even resulting in displacement and homelessness. Research shows that residential instability has negative impacts on mental health, educational attainment, and economic well-being.

The legislature further finds that anti-gouging laws can protect long-term renters from displacement due to excessive rent increase. Anti-gouging laws are broad protections that set caps on rent increases to protect renters from the most drastic rises in housing costs.

The purpose of this Act is to improve housing stability for renters and prevent displacement by prohibiting landlords from increasing the gross rental rate by a certain amount over the course of twelve months.

SECTION 2. Chapter 521, Hawaii Revised Statutes, is amended by adding a new section to part II be appropriately designated and to read as follows:

"§521- Gross rental rates; limitations on increases. (a) Notwithstanding any other law to the contrary, subject to subsection (c), no landlord shall, over the course of any twelve-month period, increase the gross rental rate for a dwelling unit by more than the lesser of:

(1) Seven per cent plus the percentage change in the cost of living over the twelve-month period; or

(2) Ten per cent;

provided that if the annual allowable increase does not completely cover a landlord's yearly increase in operating and maintenance expenses for a property, a landlord may increase the base rent up to an additional seven per cent.

In determining the lowest gross rental rate pursuant to this section, any rent discounts, incentives, concessions, or credits offered by the landlord of the dwelling unit and accepted by the tenant shall be excluded. The monthly gross rental rate and any owner-offered discounts, incentives, concessions, charges, or credits shall be separately listed and identified in the rental agreement or any amendments to an existing rental agreement.

(b) If the same tenant remains in occupancy of the dwelling unit over any twelve-month period, the gross rental rate for the dwelling unit shall not be increased in more than two increments over that twelve-month period, subject to other restrictions of this section governing gross rental increase.

(c) A tenant shall not enter into a sublease that results in a total rent for the dwelling unit that exceeds the allowable gross rental rate authorized by subsection (a). Nothing in this section shall authorize a tenant to sublet or assign the tenant's interest in the dwelling unit where otherwise prohibited.

(d) The landlord shall provide written notice to the tenant of any increase in the rental rate sixty days before the effective date of the rate increase; provided that this subsection shall not apply when the tenancy is from month to month or less than month to month.

(e) This section shall not apply to rental housing projects funded or operated by a government agency.

(f) For purposes of this section:

"Operating and maintenance expense" includes repairs, maintenance, pest control, garbage, and water expenses. "Operating and maintenance expense" does not include real property taxes, electric, gas, and management expenses.

"Percentage change in the cost of living" means the percentage change in the regional Consumer Price Index in which the dwelling unit is located, as published by the United States Bureau of Labor Statistics, from the month of the notice and twelve months before the notice. If a regional index is not available, the Consumer Price Index, for All Urban Consumers, All Items, for Urban Hawaii and United States, as determined by the department of business, economic development, and tourism, shall apply."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval and shall apply to rental agreements entered into or renewed before, on, and after the effective date of this Act.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	1056
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII