It’s a particularly cruel aspect of Hawaii’s brutal housing market: When people come up with enough money to pay the high monthly rents and manage to find affordable homes that are in short supply, they might still be thwarted by the security deposits they’re asked to pay before moving in.

State law allows landlords to collect deposits equal to a month’s rent — and that’s enough to keep some folks living in their tents and force others into homelessness when they are suddenly faced with having to find a new rental.

With so many Hawaii residents living on the financial edge, that’s a big deal.

Taxpayers and nonprofit organizations spend a lot of time and money trying to help people who are already sleeping in parks and on sidewalks. We don’t need the homeless population to increase.

This is a problem that requires public and private solutions.

Closeup of red, white for rent sign attached, hanging on wooden apartment, house, home, building door with glass windows

Monthly rents are high in Hawaii, and so are the security deposits required to move in.

Getty Images/iStockphoto

The median gross rent in Hawaii was $1,573 a month in 2017, according to the U.S. Census Bureau. Nationwide, it was $1,012.

Therefore, the average Hawaii landlord could collect a security deposit of more than $1,500. In many other states with cheaper housing, that figure might be quite a bit less.

Unfortunately, in a housing market where affordable supply doesn’t come close to meeting demand, most landlords probably are going to continue collecting the highest security deposits allowed.

How else can the problem be addressed?

For one thing, the Hawaii Legislature should pump more money into Gov. David Ige’s Coordinated Statewide Homeless Initiative, which in 2016 supplied $4.7 million to 20 service providers across the islands to provide short-term help to people facing eviction.

The initiative wasn’t funded in 2017. In 2018, it was revived but with only a third of the funding that was in the original proposal.

Such short-term assistance has proven extremely effective at preventing homelessness. And while it didn’t cover security deposits for new move-ins, preventing tenants from being evicted in the first place means they won’t have to pay new deposits.

In 2017, the Department of Human Services launched a $3 million Rapid Rehousing program. Most of that money was for people who were already homeless, and up to 40% could be used for homelessness prevention, including security deposit assistance.

Several Hawaii nonprofits help people with security deposits, sometimes with public money and sometimes not. But organizations like the Institute for Human Services, Partners in Care, Aloha United Way and Hawaiian Community Assets have never had enough resources to fully cover the need.

Meanwhile, as Civil Beat’s Christina Jedra noted in her recent report on security deposits, start-up companies elsewhere have begun addressing the issue in creative ways:

• In New York, Rhino offers tenants insurance for a low monthly fee in lieu of a security deposit.

Jetty allows tenants to replace their security deposit with a nonrefundable one-time fee of 17.5% of the deposit amount.

• For a monthly fee, tenants using Obligo pay no deposit upfront and are only charged if the landlord makes a claim for damages.

Similar commercial concepts should be considered in Hawaii, where we need everyone on board to deal with an issue we simply can’t afford to ignore.

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