Business Report: The Housing Shortage - Hawaii News Now - KGMB and KHNL

Business Report: The Housing Shortage

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HONOLULU (HawaiiNewsNow) -

A House committee advances an idea to change the tax code and address the housing crisis. But the proposal appears to be based on several incorrect premises. The sponsor blames the housing shortage on offshore buyers. That's false. 

Most investment buyers in Hawaii are local.  And all investment home purchases in Hawaii are a tiny chunk of home sales.  We have high housing prices because we have a shortage of houses. At all price points.

You can pay 700 grand for a ramshackle single-wall house shared with termites. As long as we have a shortage of inventory, every other solution is fake.

The proposal is to cut taxes for low-income residents and seniors, which sounds laudable, and pay for it by taking away the counties' share of the transient accommodations tax.  The thinking is, this will force counties to raise property taxes, making homes less attractive to the mythical wave of investment buyers. 

The sponsor says we have some of the lowest property taxes in the nation.  That is not correct. What we have is some the lowest property tax RATES. But our home prices are so high, our tax bills wind up being pretty big anyway. Raising property tax RATES will make housing less affordable to locals. It will hardly deter affluent offshore investors who can afford to pay cash for a second home.

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