Housing bills vie for state lawmakers’ attention

With a bill introduction deadline looming on Thursday, state lawmakers already have nearly 150 measures to consider as ways to address Hawaiʻi’s dire housing shortage, a problem even more acute on Maui after the August 2023 wildfires destroyed thousands of homes.

Here’s a sampling of some of the measures, all of which have passed first reading in either the state House or Senate and have been referred to committees for further review:

House Bill 489 and Senate Bill 1214 would establish a Vacant Homes Special Fund under the Hawaiʻi Housing Finance and Development Corp. for rental assistance programs. Under the bill, residential property owners who allow their property to remain vacant for 180 days, or more than a year, would be subject to an annual general excise tax surcharge. It also requires people who own residential property but don’t live there to obtain a general excise tax license.

The bills also require the counties to disclose a list of unoccupied residential properties to the state Department of Taxation, and it requires the state Department of Business, Economic Development and Tourism to calculate average annual rental value for the basis for the surcharge amount.

The House measure takes aim at owners of second homes in Hawaiʻi, pointing out that the state’s infrastructure enhances property values and development opportunities, but that owners of second homes, who leave them vacant throughout the year, “fail to contribute proportionately to the local economy that sustains their value.”

Surcharge income would be used by the state for a rental assistance program similar to the federal Section 8 tenant-based housing assistance program, according to the bill. The amount of the surcharge would be equal to the estimated amount the housing unit would generate in excise taxes if it were rented to a tenant in a comparable real property size and area, indicated by ZIP code.

The task of figuring out how to implement such a law would fall to the director of the Department of Business, Economic Development and Tourism, who may adopt, amend or repeal rules to carry out the property vacancy surcharge.

The bill was introduced by Oʻahu House Reps. Kim Coco Iwamoto and Amy Perruso.

Central Maui Rep. Tyson Miyake is co-introducer with Kaua’i Rep. Luke Evslin for House Bill 739, which proposes to establish a Kamaʻāina Homes Program that would provide funding to the counties to purchase voluntary deed restrictions from eligible homeowners or homebuyers.

Established within the Hawaiʻi Housing Finance and Development Corp. at a time when the median single-family home sells for nearly $1.4 million, the Kamaʻāina Homes Program would be modeled after the Vail InDEED program in tourist-Mecca Vail, Colo.

According to the bill, Vail implemented in 2018 a voluntary program to allow the town to buy and place deed restrictions in perpetuity on local homes from willing buyers that limited occupancy to owner-occupants or resident tenants who live and work in the town of Vail. Since it began, the program has set aside more than 1,000 deed-restricted residences for local working residents and helped provide more attainable housing for residents.

Miyake, Evslin and Oʻahu House Rep. Rachele Lamosao of Waipahu have introduced House Bill 525, which would clarify that dwelling units eligible for the Rent-to-Own program shall be units that are for sale in fee simple or leasehold on state or county land under a lease with an initial term of no less than 99 years.

The bill would increase amount of time that the sales price of dwelling units under the Rent-to-Own Program shall remain fixed from five years to 10 years after the rental agreement is executed.

At least a couple of measures would tie the hands of county councils in some cases. For example, Senate Bill 27 would exempt state-financed housing developments from the requirement to obtain approval from the applicable county council.

The bill was introduced by Senate Housing Committee Chair Stanley Chang, with support from Vice Chair Troy Hashimoto, of Central Maui. Other senators backing the bill include Republican Kurt Fevella of Ewa Beach, Sharon Moriwaki of urban Honolulu and Glenn Wakai of Central Oʻahu and Senate floor leader.

And, Senate Bill 38 would prohibit the legislative body of a county from making modifications to housing development proposals that would increase the cost of the project.

That bill was introduced by Sens. Chang, Fevella, Hashimoto and Joy Buenaventura of Puna, Hawaii Island.

Calling for a change in Hawaiʻi’s landlord tenant laws is House Bill 464. For tenants residing in rental units for more than 90 days, the bill would require a landlord to notify a tenant of any intent to raise the rent for any subsequent rental agreement or any intent to terminate a rental agreement 60 days before the expiration of the original rental agreement.

It would also mandate a 90-notice to terminate a tenancy for tenants of three years or more and 60 days for tenants of less than three years, with certain exceptions. It also increases the amount of time required to give notice to terminate tenancies that are less than month-to-month.

The bill includes a legislative finding that working families in Hawaiʻi face increasing housing insecurity and displacement.

“Many renters in Hawaiʻi lose their housing through processes that never register as evictions because they happen at the end of a lease term,” the bill says. “Landlords can decline to renew a lease, even for complying tenants, without cause. These arbitrary lease nonrenewals are highly disruptive to the lives of tenants and are a cause of poverty, financial insecurity and emotional distress.”

The bill proposes finding that under the residential landlord-tenant code, fixed term leases –- for example, a one-year lease –- currently have no notice requirement. Instead, landlords are recommended to give notice prior to the lease expiration.

Short notice or lack of any notice “imposes serious hardship on many tenants who struggle to locate adequate housing in Hawaiʻi’s increasingly tight rental market and face serious economic burdens to cover the costs of relocation.”

Such costs include application fees, safety deposits, rent and taking time off from work to inspect units and move belongings from a former residence to a new one.

“Given the realities of Hawaiʻi’s current rental market, the Legislature finds that tenants need additional time to secure adequate housing,” the bill says.

The measure was introduced by Maui County Reps. Terez Amato of South Maui and Rep. Mahina Poepoe of Molokaʻi and Oʻahu Reps. Tina Grandinetti, Daniel Holt, Kim Coco Iwamoto, Darius Kila, Trish La Chica, Lisa Marten and Amy Perruso.