State funds for late rent, mediation to be revisited

Key state lawmakers are vowing to revisit a bill that died in the final days of the legislative session that would have required mediation between landlords and tenants before filing for eviction, while providing landlords millions in emergency rent relief.

The latest version of House Bill 1439 would have funded $12 million in overdue rent to landlords and an additional $1.5 million in “pre-litigation mediation” as federal COVID-era rental assistance is set to expire, said state Rep. Troy Hashi­moto (D, Wailuku-Waikapu), who chairs the House Housing Committee and introduced the measure.

The bill followed a temporary halt to evictions that also mandated widely praised mediation between landlords and tenants who got behind on their rent as Hawaii’s economy nearly stalled during the pandemic when tourism all but dried up.

Then-Gov. David Ige in April 2020 imposed the first of a series of eviction bans to give renters relief but lifted the moratorium in August 2021.

The Legislature this session did fund $7 million in rental assistance — without mediation — aimed at preventing low-income residents from becoming homeless, Hashimoto said. But his bill would have applied to any tenants who get behind on rent to prevent them from becoming evicted and joining the competition for rental housing.

He called HB 1439 “an off-ramp from the federal rental relief, which will end in the fall. We’re going to watch what the numbers are with evictions. It’s a population that’s going to be priced out as rental prices go up and federal emergency rental relief expires.”

“Mediation has proven that it works,” Hashimoto said. “Mediation in itself is helpful. When you pair it with rental relief, it becomes very potent. … We’re going to continue to work on it as the federal benefits dry up. We want to make sure people in the community are helped.”

State Sen. Jarrett Keoho­kalole (D, Kaneohe-Kailua) led the Senate side of the joint House and Senate conference committee that ultimately killed HB 1439.

Keohokalole said Hashi­moto worked to tighten language “to ensure the money was traceable and that it would be used for rent relief, for back rent. To his credit, he worked with some of my members to negotiate all of the appropriate language to ensure that the state funding would go directly to landlords.”

Keohokalole said HB 1439 “was conditioned on mediation so there was something in it for the landlords and the renter to participate in mediation. … If we can keep people in housing then it’s less likely they will end up competing with everyone else for housing during this massive shortage we’re going through.”

Mediation during the COVID-era eviction moratorium “was pretty successful and a good utilization of money,” he said. “There was an incentive for both sides. Evictions are very risky and cumbersome. It takes a long time and you’re worried about the condition of the property when you get it back.”

In October, the Hawaii Appleseed Center for Law &Economic Justice released a study showing that the “pre-litigation mediation program,” known as Act 57, in 2021 helped both renters and landlords and reduced court costs and strains on the judicial system.

“The Act 57 program diverted from the court system as many as 1,201 eviction cases,” Hawaii Appleseed said.

The study, done in partnership with the Housing Crisis Research Collaborative, suggested that continuing short-term rental subsidies, along with an emphasis on tenant-landlord mediation, might be additional tools to increase “housing stability.”

“For the landlords, the agreements reached often meant they were able to recover back rent and avoid the costly processes of litigating an eviction action and finding new tenants,” Hawaii Appleseed wrote at the time.

“For families who were able to remain in their homes as a result of Act 57 and the availability of rent relief, they avoided forced moves that often result in the loss of security deposits and belongings, a change in schools, a longer commute to work, a negative mark on their rental history, and for some, homelessness.”

HB 1439 would have been administered by the Hawaii Public Housing Authority and drew widespread support, including written testimony from state judges across the islands who wrote:

“When the COVID-19 pandemic began, there were predictions that thousands of evictions would flood the court system. … Under Act 57, 85% of the 1,660 cases mediated statewide settled without litigation. Moreover, in the First Circuit, 85% of these settlements resulted in tenants remaining in their homes.”