Ann Albert didn’t know how she was going to pay for her security deposit. 

After years in a homeless shelter with her three children, she secured a coveted Housing Choice voucher and found a place willing to rent to her family. 

She could make the subsidized monthly rent of $200. Her income from a food service job in Waikiki brought in about $500 to $600 per month. 

But the security deposit was the full value of the rent: $1,998. She just didn’t have it. 

“It was very difficult,” she said in Chuukese through a translator at Legal Aid Society of Hawaii. “At that time, I was the only one working and even with my pay, I couldn’t afford the first month’s rent in addition to the security deposit.” 

In a state that has among the highest housing costs in the nation, the working poor in Hawaii struggle every day not only with the cost of rent but also the cost of just getting in the door.

Wilhemina Rise homes below Maunalani Heights.
Affording a home rental in Hawaii can be an uphill climb, in part because of stiff up-front costs such as security deposits. Cory Lum/Civil Beat

State law allows security deposits to be of equal value to the rent. So as rents rise faster than wages, renters have to overcome higher and higher obstacles by paying their rent – times two – all at once. 

Even if a tenant is supposed to have an old deposit returned to them from the unit they’re leaving, landlords have 14 days to return it after the tenant has vacated the property. That means many renters need to put down a fresh security deposit on a new place before they get their old one back – if they get it at all. 

A Legal Aid attorney said that it’s not uncommon for landlords to keep part or all of a deposit for damages whether they’re real or not.

Ann Albert had a housing voucher but no deposit money. Courtesy: Legal Aid Society of Hawaii

That requires saving money in a way that is almost impossible for many people, said Sam Church, executive director of Family Promise of Hawaii, a nonprofit that serves homeless families.

“In addition to making rent, they’re just trying to survive and pay for childcare and food,” she said. 

Housing services providers say security deposits are a major barrier to housing in Hawaii and the demand for assistance far exceeds the supply. 

On the flip side, landlords require security deposits because they want to protect their property from potential damages. 

When you have somebody moving into your home, you don’t usually know that much about them,” said Cathy Ostrem, a real estate agent and landlord. “You don’t know if they’re going to trash the place or not. It’s a little bit of an insurance policy built right in there.” 

At a time when Hawaii continues to grasp for solutions for homelessness, among the highest per capita in the country, housing advocates are asking if there’s a better way to handle security deposits. 

“In order to stop homelessness, you have to prevent it,” said Jillian Okamoto, who administers housing programs for Catholic Charities. 

Save, Borrow and Bargain

Renters make up 42% of all households in Hawaii, according to the Low Income Housing Coalition. Data shows many of them are pinching pennies. 

Nearly half of all Hawaii households earn more than the federal poverty level but still can’t afford a basic household budget including housing, childcare, food, transportation and health care, according to a 2017 report by Aloha United Way.

A major part of the problem is that low wages dominate Hawaii’s economy. Sixty-two percent of all jobs in Hawaii pay less than $20 per hour, according to the AUW’s analysis of federal labor statistics. More than two-thirds of those pay less than $15 per hour, which amounts to $31,200 per year. 

In Hawaii, 62% of jobs pay less than $20 per hour, according to an analysis of federal labor statistics by Aloha United Way. Aloha United Way ALICE Report

Compare that to the cost of housing. 

A full-time worker making $15 per hour would make $2,021 per month after taxes, according to a paycheck calculation via So their hourly take-home pay would be less than $12 per hour. 

The Fair Market Rent for a one-bedroom apartment in Hawaii is $1,458, according to the National Low Income Housing Coalition. So a renter would need to put up $2,916 to get a key.

It would take that worker 125 hours – more than three full weeks of 8-hour days – to save up the money to pay a security deposit alone on that apartment. 

After paying rent, that worker would have only $563 per month left over. That doesn’t leave much for an individual to survive.

Rachel Hoerman knows this all too well. A Hawaii resident for 15 years, Hoerman is an archaeologist and former lecturer at the University of Hawaii. 

Despite being a working professional, she’s had to obtain a loan every time she’s moved. She has borrowed money for security deposits six times, she said. 

“I have a retirement account. I make a decent salary. I have a Ph.D. And I’m still not able to set aside the $1,500 to $2,000 for a security deposit,” she said. “I make what looks on paper to be a very healthy salary, but it’s not when it costs $5 here for a piece of dragon fruit.” 

On her own since she was a teenager, Hoerman said she doesn’t have a family support system or inherited wealth to fall back on. Having roommates can cut costs, she said, but living with someone who splits the rent can be a liability as well. 

“People leave you in a lurch,” she said. “I’ve lost security deposits because people damaged rooms they were renting.”

Others try to trade services for a key to an apartment. 

Paula Lockett moved to Hawaii in 2010 with the hopes of securing a job with Norwegian Cruise Line, but she said it didn’t work out. Since then, she’s driven for ride-share companies and picked up singing gigs, but it’s been tough to save enough for rent and security deposits. 

Over the summer, she lived for a few weeks in a Kaneohe unit. According to Lockett, the landlord had agreed to accept home repairs in lieu of rent and gave her an extra month to provide a security deposit, but he later evicted her over a dispute.

Lockett said she contacted service providers for help but wasn’t eligible because “most of them want you to have a 9 to 5.”

Several service providers told Civil Beat they only assist clients with first month’s rent and security deposits if the recipient can demonstrate they will be self-sufficient going forward. 

Without nonprofit assistance, Lockett ended up staying with a friend. In other words, she said, she was homeless. 

Here I am now, searching for another place, no deposit, no first month’s rent,” she said in October. “If you don’t have a key to a place and don’t have peace, even if you’re indoors and have to commit to other people’s style of living, that’s homeless. That’s definitely where I am now.”

Days later, she would board a flight back to her native Virginia. She said friends and family had scraped together the funds for a ticket home. 

“Life happens, and sometimes it’s hard to recover,” she said. 

Families Carry A Heavier Load

Saving up enough money for security deposits is especially tough for families with children.

Bree Maumausolo was eager to move into a third-floor walkup last year with her then 1-year-old son and 4-year-old daughter. She had 60 days to find a place to use her Housing Choice voucher or she’d lose it.

Bree Maumausolo with her son Brendan Maumausolo Sale and daughter Jayden Silva-Sale at their home in Nuuanu.
Hawaiian Community Assets helped Bree Maumausolo afford a security deposit so she could move to Nuuanu with her son Brendan and daughter Jayden. Cory Lum/Civil Beat/2019

“That was the first place I could find, so I took it,” she said. 

But she soon realized the unit was going to be a problem. A downstairs neighbor twice lit his mattress on fire with cigarettes, she said. And the door to her lanai, which she kept open to let in the breeze, didn’t have a screen door. With her son starting to crawl and walk, Maumausolo felt it was dangerous. 

“The railings were big enough for my kids to fit through,” she said.

She wanted to move. But Maumausolo ran into the same problem as Albert, the Chuukese mother of three. Although the Housing Choice program, also known as Section 8, acknowledged she was poor enough to be entitled to rental assistance, she was on her own when it came to the security deposit. 

As a single mom working as a receptionist for $15 an hour, she had no idea how she’d come up with the money. 

“I was like: Oh my gosh, who can I borrow from now?” she said. “I was trying to think of family members who would give me that much money, but everybody has it hard.”

A friend suggested Maumausolo reach out to Hawaiian Community Assets, a nonprofit housing counseling agency that has several lending programs for low and moderate income communities. 

Within days, the agency provided Maumausolo with a $3,000 loan, enough to cover a $1,700 security deposit and her rent portion, she said. The assistance allowed her to move to a place in Nuuanu where her kids can move around freely. Later, Hawaiian Community Assets also helped her refinance a car loan at a lower interest rate. 

“I was so grateful,” she said.

Portrait of Jeff Gilbreath image.
Jeff Gilbreath at Hawaii Community Lending helps connect struggling individuals and families to much-needed loans. Cory Lum/Civil Beat/2019

The average emergency loan Hawaiian Community Assets issues is about $4,000, according to Jeff Gilbreath, director of lending and development at the nonprofit’s subsidiary, Hawaii Community Lending.

The program, which includes financial counseling, has an excellent rate of repayment, with 99% of borrowers paying back their loans, according to Gilbreath. But some people aren’t in a position to take on a loan, he added.  

“When we can’t – with that liberal of underwriting criteria – approve them, I don’t know where they’re going, if they’re going anywhere, if they’re ending up on the beach,” Gilbreath said.

New Models Emerging

Folks on the brink face a hodgepodge of charity programs that come and go with government funding. And according to every service provider Civil Beat talked with, there’s never enough of that money to go around. 

IHS helped 469 families with first month’s rent and security deposit assistance in fiscal year 2019, according to Director Connie Mitchell. But she said there were more people who needed that kind of assistance. 

We kind of ran out of money at one point,” Mitchell said. 

Aloha United Way had a program it said was very successful at bailing out individuals and families, some of whom needed security deposit assistance.

Following an emergency proclamation from Gov. David Ige, the Coordinated Statewide Homeless Initiative was supported by $4.7 million in state funding that was distributed to 20 service providers across the state. People facing eviction could get up to three months’ worth of rent. The average grant per household was $1,000. 

“One little financial crisis, if you can’t get through it, it spirals out of control,” said Norm Baker, chief operating officer at Aloha United Way. “But if someone steps in with $1,000 to get you through that month’s rent, a month later, everything is fine.”

Of the nearly 5,000 individuals CSHI served from 2016 to 2017 – most of whom were at risk of homelessness – 91% stayed housed after they received assistance, according to AUW. The success rate was even better for families: 97% stayed out of homelessness. 

1717 Keeaumoku Street apartment security deposit.
Every time Rachel Hoerman has moved in Hawaii, including when she moved from this Makiki apartment complex, she’s needed to secure a loan. Cory Lum/Civil Beat/2019

In 2017, several bills were introduced in the Legislature with the intention of continuing funding for CSHI, but none passed. That year, the Department of Human Services launched a new $3 million Rapid Rehousing program. Most of that money was for people who were actually homeless, while up to 40% could be used for homelessness prevention, including security deposit assistance.

In 2018, the Legislature revived CSHI, but with only $1.5 million, a third of the funding from the previous iteration. It was contracted out to another nonprofit.  

Partners In Care just launched a new city-funded landlord engagement program in November that can cover some security deposit expenses, according to executive director Laura Thielen. But the one-year pilot program is focused more on building relationships with landlords and has only $400,000 in funding with no guarantee of a second year.  

“There is very little assistance available in the community for people who are about to become homeless,” Baker said. “The whole preventative piece is very, very shaky.” 

In New York, startups are emerging to disrupt the security deposit status quo. 

Rhino offers insurance in lieu of a security deposit. For example, instead of paying a $3,000 deposit on an apartment of equal rent, users can pay Rhino a nonrefundable monthly fee of $13. Rates are based on lease terms and personal information, according to the company’s website. Rhino covers damage to the unit by the tenant, so the landlord is protected, but the tenant is then required to reimburse Rhino up to a certain amount, according to a copy of the company’s tenant agreement obtained by Shelterforce.

The concept aims to relieve the tenant from a hefty upfront cost while simultaneously protecting the landlord’s property.

“Security deposits have been vastly overlooked for the past few decades and as rents have gone up, security deposits have become a much bigger barrier than they used to be for renters,” Rhino Chairman and co-founder Ankur Jain told the New York Times in October.

Other services have a similar mission: 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.

Hawaii’s housing leaders should consider bringing some of these concepts to the Aloha State, said Jay King, integrated services director for Lt. Gov. Josh Green’s Hawaii Homeless Healthcare Hui

“There’s an opportunity to create a model that would provide more security for landlords and clients,” he said. “Why would it work in New York and not the Pacific?” 

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