"Empty homes" tax deferral shows your voice matters

by Keli'i Akina, Ph.D., President / CEO, Grassroot Institute of Hawaii

This week, we witnessed a victory for individual freedom and responsible lawmaking.

On Wednesday, the Honolulu City Council voted to defer Bill 46, thereby saving Oahu homeowners from a so-called empty homes tax — at least for now.

Much of the credit for this win goes to you, the people who got involved and made their voices heard. The failure of the empty homes tax is proof that your letters and messages to lawmakers can make a real difference.

There were myriad problems with Bill 46, not the least of which was defining what comprises an empty home.

The number of proposed exemptions to the tax has steadily creeped upward since it was first proposed several years ago, and currently the number is almost 20. The number ballooned in an apparent attempt to make the tax more palatable to people who might otherwise be affected by it.

Opponents of Bill 46 noted how arbitrary the definition was becoming and joked that with so many holes, it might as well be called the “Swiss cheese” bill.

Then there were the enormous feasibility questions. No one could estimate how much the tax would bring in or how much it would cost to administer and enforce.

In fact, the questions surrounding the tax are so significant that the city commissioned a half-million-dollar study to consider how to implement it. The results aren’t due until next year sometime, but some members of the City Council wanted to go ahead and pass the bill now anyway.

This “pass it first, figure it out later” approach was inexplicable, given that the bill had serious implications for freedom, the city budget and Hawaii’s already pricey housing market.

Bill 46 also had major legal problems. A recent court decision in California found that a similar tax in San Francisco violated due process, equal protection and the right to privacy. In short, it was deemed unconstitutional to force people to rent or share their property against their will.

Grassroot raised the alarm about these and other issues with the bill, and you and many others responded. Hundreds of citizens sent messages to their Council representatives via our Voter Voice system.

At earlier hearings, testimonies initially favored the bill. But at this week’s final hearing, they clocked in at 3-1 against, with 315 testimonies submitted in opposition.

I believe it was the strong testimony in opposition that persuaded the Council to defer Bill 46. Council Chair Tommy Waters, a co-introducer of the bill, said as much when, just before the final vote of his colleagues could be cast, he urged that the bill be deferred until the city-commissioned study is completed.

Of course, this is probably not the end of the empty homes tax. Chairman Waters indicated that he plans to revisit the bill when the study is finished. But we demonstrated that there is significant opposition to this proposed tax, and I hope it will meet a similar fate if it ever comes back to haunt us again.

For now, my thanks go out to everyone who was key to this victory. Your voice matters. This is how we will make Hawaii more free and affordable for all.

E hana kākou! (Let's work together!)