Report Title:

Public Housing


Requires the HCDCH to adopt a written policy to deduct per cent of earned income when calculating a families rent for federal low-income housing. (HB948 HD1)


H.B. NO.



H.D. 1






relating to earned income deduction for public housing rent calculation.



SECTION 1. It is the policy of both federal and state governments to foster and encourage economic self-sufficiency of families living in federal low-income housing in the State of Hawaii. Nevertheless, working families often find it difficult to get by. Rent is thirty per cent of the family’s adjusted gross income. Essentially, the only adjustment from the gross income is to exclude $40 a month per child. A family on public assistance, with nothing withheld from their check, who receives sizeable non-cash benefits of food stamps, free car insurance, and one hundred per cent free medical, has actual net income considerably greater than its gross income.

A working family, on the other hand, has federal income taxes, state income taxes, social security, union dues, medical insurance, and retirement deductions withheld from its gross income. A working family's net realized income may be only sixty to seventy per cent of its gross income. The working family also needs to buy food, car insurance, and medical services from out of the gross income that its rent is computed from, whereas the welfare family receives those benefits on a non-cash basis without impacting its rent. In addition, of course, there are numerous expenses associated with working that the working family also must pay out of its gross income.

Thus, when the welfare family pays only thirty per cent of its cash benefit for rent, the working family finds itself paying almost half of its take-home pay for rent in federal low-income housing.

Federal regulation 24 C.F.R §5.611 (b)(1) provides that: "[f]or public housing, a public housing authority may adopt additional deductions from annual income." The housing and community development corporation of Hawaii (HCDCH), Hawaii’s public housing authority, has not adopted additional deductions from annual income.

The purpose of this Act is to require HCDCH to adopt a written policy to deduct per cent of a family’s earned income when calculating their rent for federal low-income housing.

SECTION 2. Section 201G-32, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) In the operation or management of housing projects, the corporation (acting directly or by an agent or agents) shall at all times, observe the following duties with respect to rentals and tenant selections:

(1) It may establish maximum limits of annual net income for tenant selection in any public housing project, less such exemptions as may be authorized by federal regulations pertaining to public housing. The corporation may agree to conditions as to tenant eligibility or preference required by the federal government pursuant to federal law in any contract for financial assistance with the corporation;

(2) It may rent or lease the dwelling accommodations therein only at rentals within the financial reach of persons who lack the amount of income which it determines to be necessary in order to obtain safe, sanitary, and uncongested dwelling accommodations within the area of operation of the corporation and to provide an adequate standard of living; [and]

(3) It may rent or lease to a tenant a dwelling consisting of the number of rooms (but no greater number) which it deems necessary to provide safe and sanitary accommodations to the proposed occupants thereof, without overcrowding[.]; and

(4) It shall deduct per cent of a family's earned income that would otherwise be counted in its adjusted annual income when figuring its rate of rent for dwelling accommodations in the housing projects provided for by this subsection, as long as such deductions are allowed by federal law."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2010; provided that on June 30, 2012, section 2 of this Act shall be repealed, and section 201G-32(a), Hawaii Revised Statutes, is reenacted in the form in which it read on June 30, 2010.