Hawaiʻi can increase housing stability through a rent relief & mediation program
Everyone benefits from housing stability. Around 2,500 evictions are filed every year in Hawaiʻi. Evictions are harmful to the landlords who rely on rent payments, to the tenants who lose their homes, and to our community—which incurs an estimated $30 million in costs for public and emergency services needed as a result of evictions.
Hawaiʻi created one of the most successful eviction-prevention programs in the nation during the pandemic when it adopted two key tools for preserving housing stability—emergency rent relief and pre-litigation mediation—through Act 57 (2021). Having both tools available for landlords and tenants who went through mediation resulted in 87 percent of eviction cases settling, compared to the norm of 47 percent. Most importantly, 85 percent of settlements resulted in tenants remaining in the home, relative to the more typical 11 percent rate pre-Act 57.
The rent relief & pre-litigation mediation programs Hawaiʻi put into place during the pandemic taught us important lessons:
Rent relief is helpful. Pre-litigation mediation is helpful. But they are most powerful when combined.
Keep it simple. Securing rent relief was challenging for many tenants and landlords because of onerous documentation requirements to show that tenants qualified. As a result, some households that needed assistance weren’t able to access it, and administration of the program was more time-consuming and costly than it needed to be.
Outreach and support services are key. Tenants who are intimidated by the prospect of eviction, are hopeless about their situation, or are worried about falling victim to scams may need additional assurances that the pre-litigation mediation and rent relief options available to them are real and effective. They often will need time and support getting back on track to housing stability.
Rent Relief & Pre-Litigation Mediation Under HB1439/SB1439
Introduced in the 2023 legislative session, HB1439/SB1439 incorporates the lessons learned from the pandemic pilot into a streamlined rent relief & mediation program. Under this proposal, before an eviction for non-payment of rent can be filed with the court, the tenant must be offered pre-litigation mediation. Participants in pre-litigation mediation will have exclusive access to a rent relief fund that can be used to help pay arrears and/or provide a shallow rent subsidy of $500 a month for a few months, buying the tenant time to get back to a more stable financial situation.
The benefits of this approach include the following:
Limiting the rent relief to a relatively low amount (e.g., $5,000 to $8,000) mitigates the need for income qualifications and the corresponding onerous documentation requirements. Not only are the households that face eviction typically lower-income, people with high-cost rentals are unlikely to be able to use the subsidy to preserve high cost housing because the amount they could receive is limited.
Making rent relief available only to pre-litigation mediation participants:
Stretches the dollars committed to rent relief by making it a program of last resort;
Helps mitigate the potential of cannibalizing funding from federally-subsidized rent relief programs that are harder to qualify for and access; and
Mitigates the likelihood of fraud in the program. The requirement that people show up in person or via video-conference and engage in mediation make it far less likely that people will be able to take unfair advantage of the program.
Recommendations to Strengthen HB1439/SB1439
Based on our research of the pandemic rent relief and mediation programs, supported by the Urban Institute, we make the following recommendations:
Cap the total amount of rent relief available to a household at $8,000—up to $5,000 for arrears plus up to $3,000 for an ongoing shallow rent subsidy of $500 per month for six months.
These figures are based on average distributions of pandemic rent relief that ranged between $2,250 and $6,000 depending on the program and county. $5,000 of available rent relief should assist a household of four with nearly two months of back rent, covering enough of the arrears that a tenant is likely to be able to remain an ongoing tenant. Having a shallow rent subsidy of $500 for six months is key to give the tenant time to get back on track financially or explore other options.
An appropriation of $11.25 million per year for rent relief could cover up to 2,250 households with an average payout of $5,000. Setting the cap at $8,000 provides flexibility for when a higher amount is warranted, but most households will likely receive less.
Allocate sufficient resources for administration of the rent relief, mediation, outreach, financial education/navigation services and data collection. Even with a streamlined program, there’s a cost associated with administering the rent relief program that will need to be covered.
During the pandemic, the mediation programs were able to conduct mediations for a cost of about $250 to administer the process for each case, plus $250 for each mediation session with up to two mediations being required. $1.25 million would cover 2,500 mediations at $500 per mediation.
Funding for outreach, financial counseling and navigation services is also critical. We know from the pandemic that tenants need assurances that programs similar to what’s proposed are legitimate and offer a true opportunity for preserving their housing. And many tenants will likely need assistance during the six months of additional rent assistance to assess their ongoing financial stability, and identify other options or resources they can access for long-term sustainability.
It will also be important to allocate resources for data collection and analysis of the program. We know from the pandemic that rent relief and pre-litigation mediation is effective, but a small amount of support for analyzing the program can go far toward improving its efficiency, increasing its impact, and ensuring the program is successfully mitigating houselessness.
