‘Empty Homes Tax’ Drives Rent up 37%
by Andrew Walden
Do you think Honolulu Bill 46, the ‘Empty Homes Tax,’ will drive down Honolulu’s sky-high rents?
Think again.
Even the bill’s supporters don’t pretend rents will come down.
Results from the ‘Empty Homes Tax’ in Vancouver, Canada--which Bill 46 is modeled upon--show rents going up, not down.
Vancouver adopted its ‘Empty Homes Tax’ in 2017. Citing a report from Rentals.ca, local news site VancouverIsAwesome.com, April, 2024, explains:
“… in the past five years, the average rent for a newly-listed one-bedroom apartment in Vancouver has increased by $706, or approximately 36.6 per cent, from 2019 to 2024….”
Vancouver is now the second most expensive rental market in all of Canada. Only North Vancouver is higher.
A report from UHERO, Nov 25, 2024, makes extensive claims about how many units would flood onto the market and how much revenue would be funneled into County coffers if the tax was adopted.
But it says not one word about rental costs.
Likewise, rental costs are mentioned nowhere in the most recent, 2023, City of Vancouver annual report on the Empty Homes Tax.
Honolulu political insiders are salivating over the possibility that the tax hike on housing will generate what UHERO projects to be $144 million annually to be burned up on bogus ‘affordable housing’ scams to buy overpriced buildings from campaign contributors or hand off brand-new ‘affordable’ units to political insiders.
It works the same way in Vancouver. Owners of so-called ‘vacant’ homes either paid the tax or shuffled papers around to avoid it. Canadian media reports have been clear:
CBC November 29, 2018:
…in its first year of implementation, the tax appears to be doing little to achieve its stated goal, while putting millions more dollars than expected into City of Vancouver coffers.
Numbers from the Canada Mortgage and Housing Corporation show a mere 0.1 per cent increase in the city's primary market vacancy rate in 2017 — rising from 0.8 per cent to 0.9 per cent.
That's less than the 0.2 per cent increase in the vacancy rate across the rest of the Lower Mainland region, where there is no empty homes tax.
Meanwhile, revenue from the tax is expected to generate $38 million for the city in its first year of implementation, $8 million more than was originally projected. …
Globe and Mail, Feb 28, 2019:
Vancouver’s precedent-setting empty-homes tax resulted in only 117 homes being converted to rented from vacant in the second year of its operation, according to a staff report.
And the agency that tracks Canada’s housing statistics noted that almost 1,100 homes were removed altogether from the rental market in the first year of the city’s empty-homes tax (EHT).
That means the proportion of Vancouver homes rented out fell to 24.5 per cent in 2018, compared to almost 26 per cent in 2017, said Canada Mortgage and Housing Corp. analyst Eric Bond.
Raising taxes on housing does not make housing less expensive. Neither do increased sewer fees nor increased insurance rates. Yet, this is the triple whammy for 2025.
In Hawaii, government-run ‘affordable’ housing schemes are, and always will be, a fraud. We all know this.
When there are few vacancies, rental costs go up, not down.
Then there are malasadas to consider.
After admitting they have absolutely no idea how many Oahu units are ‘vacant,’ UHERO points out:
ACS (US Census) data indicate that the majority of vacant units are left vacant for only one year or less. Among units that are not for sale or rent, roughly 80% have been vacant for one year or less, 9% were vacant for 1-2 years, and 11% were vacant for more than 2 years ….
Taxing empty land would incentivize the landowners to quickly build housing to avoid the tax. According to property tax records, Honolulu has more than 2,000 residential lots sitting empty, each with the potential to provide multiple units of housing. Extending the tax to cover empty lots in addition to housing units could provide additional housing and revenue.
Housing? No.
Revenue? Yes.
How many of those 80% spent a year waiting for permits?
How many of those 2,000 lots are barred from building by zoning or building codes?
A City and County tax on ‘vacant’ homes or vacant lots would incentivize the DPP’s malasada grifters to keep running a 10,000 permit backlog. DPP ineptitude and corruption would become a revenue spinner for the City and County.
The publicly built ‘affordable’ housing we need is more jail cells for crooked politicians.
---30---
Bill 46: Text, Status
RELATED: SF Judge Rules 'Empty Homes Tax’ Unconstitutional
2013: Ethics complaint: HCDA Falsifies Kakaako Workforce Housing Affordability Formulas
2018: City Buys 33 Unit Waikiki Building for Homeless
2020: Amemiya Joins Pack of Insiders Grabbing ‘Affordable’ Housing Units for Themselves
2023: Why Everybody Had To Move Out Of This Affordable Housing Project
2024: Black Sand, Kobayashi First to benefit from DEP 'Affordable Housing' Scheme