HI HB2351

Corporate owners with property interests in 5 or more single-family rental homes would be prohibited from renting those properties to residential tenants, while individual owners face the same restriction at 7 or more properties, effective five years after the Act takes effect (July 1, 2026).

Exemptions apply to government entities, land trusts, nonprofits, licensed care facilities, employer-provided housing, housing developers, and mortgage holders who acquired properties through foreclosure.

Owners may apply to the director of taxation for additional exemptions if granting them would not impact affordable housing availability or limit supply for owner-occupants.

Civil penalties for noncompliance escalate from 1% of assessed property value in the first year to 3% in the third year, with each property over the limit counted as a separate violation; owners must receive 12 months notice to cure violations before penalties apply.

Revenues collected from penalties would be deposited into the affordable homeownership revolving fund, and penalties cannot be passed through to tenants via rent increases or fees.