Priced out of Paradise: Experts debate whether rent control is r - Hawaii News Now - KGMB and KHNL

Priced out of Paradise: Experts debate whether rent control is right for Hawaii

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HONOLULU (HawaiiNewsNow) -

Real estate experts say rent is up more than 6 percent across Oahu -- for everything from apartments to single-family homes. Desirable neighborhoods near town and on the east side are up more than 10 percent.

Those rising prices -- and a limited housing inventory -- have some people asking whether Hawaii would benefit from rent control.

Only four states and Washington, D.C. have laws that limit the amount of rent landlords may charge.

Traditionally, there are two types of rent control: A strict ceiling that landlords can't exceed or a set rate determined by the market when a new tenant moves in, but with limited increases.

"Rent control is really intended to make rentals more affordable for people -- to make it so that low-income people and even moderate-income people can afford a place to live," said Gavin Thornton, the co-executive director of Hawaii Appleseed Center for Law and Economic Justice.

Landlords and property managers have historically been resistant to the idea of rent control, arguing such measures go against free market ideals.

"If you're not able to raise rents to get market rents, how are you going to pay for market repairs?" said Paul Xavier, a broker with Team Extreme Realty, which owns investment properties on the mainland.

Rent control critics also say such measures could actually decrease the production of affordable housing and potentially lead to a flood of units for sale if investors don't think they'll be able to turn a profit.

Xavier said he isn't sure rent control would be effect in Hawaii.

"People don't move a lot and you can end up with a tenant that stays in a property for a long time. If you're only allowing 1 percent a year and the market has gone up 5,6,7,8 -- even 10 percent in a year -- that's going to be tough on property managers and homeowners," he said.

Others, though, say some form of rent control is needed to address Hawaii's major shortage of affordable housing.

"The pros of rent control start with the fact that one in five people on Oahu only make 60 percent of the area median income, which is akin to saying one in five of us needs public housing," said Ricky Cassiday, a real estate consultant.

Experts say rent control is more of a social and political goal than a market solution to the problem.

"Rent control would be a great idea if it was on public land and run by public agencies and they would be able to best determine how it works and how it doesn't," he said. "It would be a horrible idea if they imposed it immediately on all development."

Here's one thing opponents and supporters of rent control can agree on: Hawaii need more affordable housing.

"A knee-jerk reaction of, 'Oh, let's adopt rent control because that will make things cheaper for everybody,' I don't think that's the way to go," Thornton said. "If we were going to consider something like that, it would really require a lot of careful study -- including examining how it's worked in other states and taking a look at how Hawaii's unique situation should be accounted for."

The last time state lawmakers considered rent control was in 2007. There were two resolutions calling for a study of its legality and effectiveness, but neither passed.

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