Deferral of 'empty homes' tax leads list of recent good news
The Honolulu City Council shelved Bill 46 while also approving bills that will actually be effective at facilitating more housing
from Grassroot Institute, Dec 20, 2024
One of the most publicized news stories emanating from Honolulu Hale over the past two weeks was the City Council's dramatic decision to defer Bill 46 (2024), the notorious "empty homes" tax proposal, after a deluge of testimony against it.
Grassroot President and CEO Keli‘i Akina celebrated the Council’s decision in his most recent “President’s Corner,” which you can read here.
As quoted in the Honolulu Star-Advertiser, Grassroot Director of Strategic Campaigns Ted Kefalas testified that “there’s just a lot of unknowns, and namely why the city paid $500,000 for a study and we’re not going to wait for it.”
Speaking to the Council in person, Kefalas said: “I have concerns that I’ve heard from a few Council members and testifiers that have said ‘Just pass the bill, and we’ll deal with it later.’ That does not seem like good policymaking to me.”
He also noted there are no tax rates mentioned in the bill, so “again, this is not how we pass legislation.”
Also good news from that same Dec. 11 Council meeting: Measures intended to facilitate more homebuilding — the only way to actually ease Hawaii's housing crisis — were approved, including Bill 51 (2024). If signed by Mayor Rick Blangiardi, the bill will relax rules for the adaptive reuse of commercial structures to residential use, as mandated by Act 37 signed into law earlier this year.
Kefalas testified that “many adaptive-reuse projects are frustrated by regulations that make it difficult or prohibitively expensive to refit commercial buildings for residential use, such as window or ventilation requirements. Carving out an alternate approach to current ordinances on light and ventilation would help facilitate adaptive reuse on Oahu.”
The Council also approved Bill 64 (2023) — a set of sweeping changes to the city’s zoning rules that among other things would allow both accessory dwelling units and ohana units in all residential lots throughout the city.
Finally, the Council passed Bill 63 (2024) on first reading. It would extend until 2030 an existing waiver for building permit, wastewater connection and other fees for people adding ADUs. The waiver is now set to expire on June 30, 2025.
Elsewhere in the islands, Grassroot submitted testimony to the Kaua‘i County Council regarding Bill 2940 urging that Council members impose a $5,000 cap on how much a property owner’s taxes could increase as a result of reclassification and loss of assessment cap.
Grassroot policy researcher Jonathan Helton said, “This would allow the county to recoup some of what might have been owed while protecting property owners from sudden tax shocks.”
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In case you missed them, there were two entertaining letters to the editor this past week in the Honolulu Star-Advertiser about the proposed "empty homes" tax:
• On Tuesday, John Burns of Wahiawa wrote, in a letter titled "Empty-homes tax bill is like fine for having more": "Empty-homes tax bill? What a refreshing idea. Maybe other similar tax bills can be created in the future. If someone has three acres of land with one house on part of it, then fine them for unoccupied acres until people can put in designer trailer homes or tents. If someone has an unused car that they don’t drive or sleep in, then tax the owner until someone lives in it. If someone has an extra house boat, shipping container, abandoned bus or illegal beach-front grass shack that nobody lives in, then fine them until they rent out the extra dwelling. If someone has more of something, then should they be encouraged to enjoy less or be fined until they share with strangers?"
• On Monday, Allen Canter of Hawaii Kai wrote, in a letter titled "Bill 46 invades citizens’ basic right to property": [Bill 46] "is an invasion of our basic right to own property. We have the right to keep that property empty or fill it with cats and dogs, or maybe even human beings. … If I want to own two or three properties, that’s my business. If I want to rent them, that’s my business. The state and county have no legal right to fine me for owning property and handling it my own way. … By the way, stop inventing new ways to tax the people."