UHERO Grudgingly Admits ‘Uncertainties’ in Empty Homes Tax

from UHERO, Nov 25, 2024 (excerpts)

… To predict the impacts of Bill 46 in Honolulu, there are three major sources of uncertainty. First, we don’t know the true vacancy rate in Honolulu. Second, we don’t know how willing empty home owners will be to convert their units. Third, we don’t know how long units are typically kept vacant.

The text of Bill 46 assumes that 9.2% of homes in Honolulu are currently vacant. The number is based on 2020 U.S. Census estimates. However, about a quarter of these vacancies are from homes that are listed for sale or rent, which would be exempt from the tax. This means roughly 6.9% of housing units would actually be subject to the tax. More recent 2023 data from the American Community Survey (ACS) estimated a 10.0% vacancy rate, or 7.5% when units for sale or rent are excluded. The map below shows the approximate locations of the 26,000 vacant homes in Honolulu that would be subject to the tax. The exact locations of vacant homes are unknown. The locations shown on the map are approximations based on census tract-level ACS survey data. Vacant units appear in all residential areas but are more concentrated in areas popular with second-home owners, such as Waikiki….

The US Census estimates are imperfect and based on who responds to Census questionnaires. For example, if a household fails to respond to Census workers, their house may be mistakenly counted as vacant. Or, if a seasonal resident responds to a Census questionnaire, the home could be considered occupied, even if it sits empty most of the year.

The misclassification of vacation rentals as vacant homes could also inflate the Census estimate. A revision to Bill 46 clarified that the policy would not apply to legally operating vacation rentals. Census surveyors are meant to exclude “transient accommodations,” such as vacation rentals, from the enumeration of housing units, meaning these units should not contribute to the vacancy count. However, because vacation rental properties are unlikely to respond to a Census questionnaire, it’s conceivable that some vacation rentals could be misclassified as vacant. In census tracts that contain a county-defined “resort zone,” where vacation rentals are allowed to operate, the ACS vacancy rate among units not for sale or rent is reported as 27%….

2019: Debunked: Caldwell’s ‘Vancouver Tax’ Does Nothing to Ease Rental Crisis

Star Adv:  UHERO offers ‘uncertainties’ over Council’s proposed empty-homes tax | Honolulu Star-Advertiser

UH News: Empty Homes Tax could increase available Honolulu housing by 14,000 units | University of Hawaiʻi System News

read … A Honolulu Empty Homes Tax: Impacts on Housing Supply and County Revenue - UHERO