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SB2539
THE SENATE
S.B. NO.
2539
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII
A BILL FOR AN ACT
relating
to rent stabilization
.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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SECTION 1.
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The legislature finds that Hawaii continues
to face a severe housing shortage, and that rapidly rising rents have outpaced
wage growth for residents.
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Rent
stabilization is a recognized tool for reducing involuntary displacement and
allowing moderate- and low-income households to remain in their communities
without discouraging responsible property ownership or maintenance.
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The legislature further finds that
residential rental housing constitutes a significant portion of the State's
housing stock.
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Rental households include
a substantial number of families with children, kupuna, persons with
disabilities, and essential workers.
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According to the department of business, economic development, and
tourism, median rents in Hawaii increased by over forty per cent between 2019
and 2024, while median household incomes rose by less than twenty per cent
during the same period.
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The United States Census Bureau
(American Community Survey 2024) reports that over forty per cent of Native
Hawaiian households rent their homes and that more than half of these
households spend thirty per cent or more of their income on rent, meeting the
federal definition of cost burdened.
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Rent increases that significantly exceed wage growth contribute to
housing insecurity, migration of working families to the continental United States,
and increased homelessness.
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Reasonable limitations on annual
rent increases are consistent with the State's housing policy objectives under
chapter 201H, Hawaii Revised Statutes, which seek to ensure affordable and
stable housing for all residents while maintaining a healthy rental
market.
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Other jurisdictions have
successfully implemented rent stabilization frameworks, including California
(Assembly Bill 1482 (2019) and Senate Bill 567 (2023)), Oregon (Senate Bills
608 (2019) and 611 (2023)), and Washington (House Bill 1217 (2025)), which cap
annual rent increases at between five and ten per cent.
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These laws demonstrate that such policies can
coexist with continued investment in new housing supply.
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Given Hawaii's limited land
availability, high construction costs, and geographic constraints, a more
conservative three per cent annual cap is warranted to stabilize the rental
market while allowing landlords to recoup reasonable costs.
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Establishing a statewide standard for rent
stabilization within the landlord-tenant framework of chapter 521, Hawaii
Revised Statutes, will provide clarity for both tenants and landlords and can
be implemented without undue administrative burden.
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Accordingly, the purpose of this Act
is to amend the landlord-tenant code to establish a reasonable statewide limit
on annual rent increases to promote housing stability and prevent price shocks
that contribute to displacement and homelessness.
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SECTION 2.
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Chapter 521, Hawaii Revised Statutes, is
amended by adding a new section to part II to be appropriately designated and
to read as follows:
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�521-
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Annual
limitation on rent increases.
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(a)
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No
landlord shall increase the rent for any dwelling unit by more than three per
cent in any twelve-month period.
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(b)
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A
landlord shall not impose any rent increase during the first twelve months
immediately following the commencement of a tenancy.
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(c)
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Any rent increase in violation of this section shall be void and
unenforceable.
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A tenant may assert a
violation of this section as a defense in any action for summary possession or
other proceeding under this chapter.
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(d)
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This section shall not apply to:
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(1)
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The initial
rental rate of a new tenancy; provided that the tenant was not a tenant in the
same dwelling unit within the preceding twelve months;
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(2)
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Dwelling units
that are subject to rent restrictions pursuant to federal, state, or county
affordable housing or subsidy programs; provided that the restrictions are
equal to or more protective of the tenant;
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(3)
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A dwelling unit
located on the same parcel as an owner-occupied principal residence, where the
owner is a natural person and rents no more than two dwelling units or bedrooms
on that parcel; or
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(4)
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Rental units
located on a kuleana parcel, as evidenced by record title, when the parcel
includes the owner's principal residence.
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(e)
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Any landlord claiming an exemption under
subsection (d) shall provide written notice of the exemption to both the tenant
and the department of commerce and consumer affairs office of consumer
protection, on a form prescribed by the department.
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The notice shall identify the specific
exemption claimed and include documentation supporting eligibility.
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Failure to provide this notice shall render
the exemption void and subject the landlord to this section.
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(f)
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Any landlord who knowingly demands or retains
rent in excess of the amount permitted under this section or falsely claims an
exemption under subsection (d) shall be deemed to have committed an unfair or
deceptive act or practice under
section 480-2.
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(g)
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Any notice of rent increase issued pursuant
to this section shall be in writing and shall state the amount of the existing
rent, the amount of the proposed rent, the percentage increase, and the
effective date of the increase.
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SECTION 3.
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New statutory material is underscored.
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SECTION 4.
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This Act shall take effect on July 1, 2026.
INTRODUCED BY:
_____________________________
By Request
Report Title:
Office of
Hawaiian Affairs Package; Rent Stabilization; Landlord-Tenant Code; Consumer
Protection
Description:
Establishes
a statewide 3% annual limit on rent increases under chapter 521, Hawaii Revised
Statutes.
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Prohibits rent increases
during the first 12 months of a tenancy and requires notice and certification
for exempt properties.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.