Legislature(2023 - 2024)BARNES 124
03/01/2024 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB262 | |
| HB218 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 385 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| *+ | HB 262 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 203 | TELECONFERENCED | |
| *+ | HB 218 | TELECONFERENCED | |
HB 262-RESIDENTIAL RENT INCREASE NOTICE
4:18:09 PM
CHAIR SUMNER announced that the first order of business would be
HOUSE BILL NO. 262, "An Act relating to increases in rent for
dwelling units; and providing for an effective date."
4:18:37 PM
LISA KELLER, Staff, Representative Andy Josephson, Alaska State
Legislature, on behalf of Representative Josephson, prime
sponsor, presented HB 262. She paraphrased the sponsor
statement [included in committee packet], which read as follows
[original punctuation provided]:
A 2020 report by the U.S. Government Accountabilit
Office found that every $100 increase in median ren is
associated with a 9% increase in the estimate
homelessness rate. Communities across Alaska are
struggling with an unprecedented increase in
homelessness, a crisis that has its roots in multiple
causes. HB 262 seeks to address one of the causes: the
rapid rise in rental rates that has many people one
paycheck away from losing their housing.
According to data from the Institute for Community
Alliances, 61% of unhoused people are not chronically
homeless. Instead, they are unable to bridge the gap
between increasing rent and stagnant wages. The
Department of Labor and Workforce Development's March
2023 rental survey of two-bedroom apartments showed an
average 7% increase in rent from 2022, with Sitka
showing the lowest increase at 3% and Ketchikan with
the highest increase at 16%. Meanwhile, the National
Alliance to End Homelessness has found that from 2020
to 2022, homelessness increased among Alaskan families
by 11%, increased among Alaskan individuals by 22%,
and increased among Alaskan veterans by 43%.
Alaska does not currently have a specific notice of
rent increase statute. Instead, a 30-day notice of
end-of-tenancy is required from the landlord to the
tenant. A month-to-month tenancy is essentially a 30-
day contract. The 30-day notice to end the tenancy
implies a 30-day notice to raise rent. When the
contract ends, after a 30-day notice, the landlord is
free to raise the rent. Since there is a clear
connection between raising rent and an increase in
homelessness, HB 262 adds a cushion of time for the
tenant to either raise additional funds for the
increase or find other more affordable housing that
fits within their budget.
The benefit to landlords is that the 90-day notice of
rent increase is only applicable when the tenant's
rent is current.
Please join me in supporting HB 262 to give vulnerable
Alaskans extra time to secure affordable housing.
4:20:59 PM
MS. KELLER read the sectional analysis for HB 262 [include in
the committee packet], which read as follows [original
punctuation provided]:
Section 1
Amends AS 34.03.020 by adding a new subsection that
requires a landlord to give at least a 90-day notice
before increasing rent on a dwelling unit for which
the rent is current. The notice to the tenant who is
current in rent serves as a start line for the rent
increase. If the tenant moves out before the 90-day is
up, the rent cannot be raised for the subsequent
tenant until after the increase specified in the
original notice. If notice has not been given to the
tenant, the rent cannot be raised until 90 days after
the date of the rental agreement termination.
Section 2
Amends the uncodified law of the State of Alaska by
adding a new section regarding applicability to a
rental agreement entered into on or after the
effective date.
Section 3
Sets an immediate effective date.
4:22:02 PM
MS. KELLER directed attention to a PowerPoint presentation on HB
262 [hardcopy included in committee packet]. She began on slide
2, "The Details of HB 262," which read as follows [original
punctuation provided]:
• When rent is current, HB 262 requires landlords to
give tenants 90 days notice of a rent increase on a
month-to-month tenancy.
• If a tenant chooses to end the tenancy 30 days after
the notice, the landlord must abide by the original
notice of rent increase date.
• If a rent increase notice has not been given to a
tenant and the tenant is given a notice to vacate for
any reason, the rent cannot be raised until 90 days
after the date of the rental agreement termination.
• HB 262 gives renters more time to budget for a rent
increase, find more affordable housing, or find
roommates to share the cost.
4:23:40 PM
MS. KELLER moved to slide 3, "Important to Note," which read as
follows [original punctuation provided]:
• HB 262 makes no changes to this part of the law.
• If rent is not paid when due, the landlord may give
written notice of intent to terminate.
• The tenant has seven days to pay the past due rent.
• If the tenant does not pay the rent due within the
seven days, the landlord may terminate the rental
agreement and immediately regain the unit.
MS. KELLER advanced to slide 4, "There is Nothing in Current
Statute that Required a Notification of Rent Increase," which
read as follows [original punctuation provided]:
Rent increase is addressed in the Alaska Landlord and
Tenant Act published by the Department of Law. The
document is inconsistent with the actual law.
• Must "give adequate notice of a rent increase," page
11, NOT IN STATUTE.
• "Unless there is a lease, the landlord is legally
entitled to raise the rent by any amount?must give the
tenant at least 30 days before the increase takes
effect?," page 17, NOT IN STATUTE.
• "Legally, a notice of rent increase is probably
equivalent to a termination of the rental agreement at
the old rate and an offer to rent the same unit at a
higher rent," page 17, NOT IN STATUTE.
4:25:18 PM
MS. KELLER proceeded to slide 5, "Cost-Burdened Households,"
which read as follows [original punctuation provided]:
• Affordable housing is defined as housing and
associated fees and utilities that costs no more than
30% of gross income.
• A cost-burdened household spends more than 30% of
gross income on housing costs
• A severely cost-burdened household spends more than
50% of gross income on housing costs
MS. KELLER moved to slide 6 to extrapolate the cost burden,
which she said affects all households.
4:27:04 PM
MS. KELLER transitioned to slide 7 to explain how homelessness
increased in areas where rents soared and listed the affected
communities nationally. She continued to slide 8, "Cost-
Burdened Alaska Renters Hit an All-Time High in 2022," which
read as follows [original punctuation provided]:
• Rent has increased
• Inflation has increased to the highest rates in
decades
• Demand is high and supply is low
• Vacancy rates remain low in Alaska
• Outmigration has slowed
• Homes have become less affordable
• Home building has been low in recent years
• There are more short-term rentals
4:29:18 PM
MS. KELLER moved to slide 9 to further explain the Alaska cost
burden on housing through data from the National Low Income
Housing Coalition (NLIHC). She moved to slide 10 to discuss the
connection between increased rent and increased homelessness.
Slide 11 featured a list of states that have more than a 30-day
notice of rent increase requirement. She concluded on slide 12,
"Vermont and Alaska Comparison, which read as follows [original
punctuation provided]:
• Northern states with significant rural populations
• Similar population size
th
• Alaska is 48 most populous state (733,406)
th
• Vermont is 49 most populous state (647,464)
• Similar metropolitan areas
• Anchorage has about 40% of the state's population
(288,121)
Burlington has about 35% of the state's population
(225,562)
4:33:14 PM
REPRESENTATIVE RUFFRIDGE asked if the timeframe for rent
increase were increased to 90 days, whether people would be able
to find alternative housing in that window. He questioned
whether notices actually drive down homeless rates and whether
these individuals are able to find a new place to stay.
MS. KELLER offered to follow up with the requested information.
She said many communities are responding with short-term rental
legislation because short-term rentals are taking available
housing off the market. She added that in the past 30 years
there has been a movement to take affordable housing off the
market to build bigger, less affordable housing.
4:35:17 PM
REPRESENTATIVE SADDLER asked whether a tenant's lease would be
binding on a subsequent tenant, meaning that if someone moved
out, the rent could not be raised on a subsequent tenant until
after the expiration of the 90-day notice.
MS. KELLER clarified that HB 262 is a rent stabilization bill,
not a rent control bill. She explained that in a sense, the
rent is following the unit.
REPRESENTATIVE SADDLER asked how this rent stabilization bill
would impact the willingness of a property owner to invest in
providing housing.
MS. KELLER said the tenant's rent must be current for the 90-day
notice to be applicable.
4:38:17 PM
REPRESENTATIVE PRAX asked whether property managers were
consulted to figure out why costs are increasing and why more
housing isn't becoming available.
MS. KELLER shared that the property owners she spoke with were
not opposed to the bill. She shard her understanding that the
increase in rent is largely due to inflation and the upsurge in
short-term rentals. She emphasized the difficulty in finding
affordable housing.
4:40:18 PM
REPRESENTATIVE CARRICK referred to lines 7-8 of the bill and
asked whether the 90-day notice requirement would apply to a
landlord who wanted to raise the rent on a tenant who is
renewing a year-long lease.
MS. KELLER acknowledged that the bill needs to be amended to
apply to this scenario because currently, the bill only applies
to month-to-month leases.
4:41:34 PM
REPRESENTATIVE PRAX asked whether price stability should be
imposed on utilities.
MS. KELLER said the bill only deals with rent. She added that
price changes to utilities would be at the landlord's
discretion.
CHAIR SUMNER opened invited testimony.
4:43:25 PM
OWEN HUTCHINSON, Healthcare & Homelessness Integration Manager,
Alaska Coalition on Housing and Homelessness, gave invited
testimony in support of HB 262 and tenant rights. He said 84
percent of extremely low-income households are cost burdened -
meaning that more than 30 percent of their income is spent on
rent and bills - and 69 percent of extremely low-income
households are severely cost burdened spending upwards of 50
percent on rent and bills. He discussed the demographics of
low-income renters who are most impacted by rent increases and
said the 90-day window would allow these renters to engage with
the U.S. Department of Housing and Urban Development (USHUD)
grantee recipients to look at stabilization and rapid rehousing.
4:47:32 PM
TERRIA WARE, Senior Director, Anchorage Coalition to End
Homelessness, gave invited testimony in support of HB 262. She
reported that Anchorage has seen rent increases of up to 40
percent. She explained that an extra 60 days provides time for
someone to figure out how to pay the rent increase, acquire a
security deposit, find a storage unit, or fill out rental
applications. It would also give service providers a chance to
help find alternative housing.
4:50:17 PM
CHAIR SUMNER announced that set HB 262 would be held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 218 Version B.pdf |
HL&C 3/1/2024 3:15:00 PM |
HB 218 |
| HB 218 Sponsor Statement.pdf |
HL&C 3/1/2024 3:15:00 PM |
HB 218 |
| HB 218 Sectional Analysis Version B.pdf |
HL&C 3/1/2024 3:15:00 PM |
HB 218 |
| HB 262 Sponsor Statement.pdf |
HL&C 3/1/2024 3:15:00 PM |
HB 262 |
| HB 262.pdf |
HL&C 3/1/2024 3:15:00 PM |
HB 262 |
| HB 262 Research Alaska Housing Cost Burden.pdf |
HL&C 3/1/2024 3:15:00 PM |
HB 262 |
| HB 262 Sectional Analysis.pdf |
HL&C 3/1/2024 3:15:00 PM |
HB 262 |
| HB 262 Research Housing Cost Impact on Homelessness.pdf |
HL&C 3/1/2024 3:15:00 PM |
HB 262 |
| HB 262 Research Relationship Between Rent Increase and Homelessness.pdf |
HL&C 3/1/2024 3:15:00 PM |
HB 262 |