The mayor says he supports a ‘vacancy fee.’ Here’s what that means.

The mayor says he supports a ‘vacancy fee.’ Here’s what that means.
Hawaii has among the highest costs of living in the nation. (Source: Hawaii News Now)

HONOLULU, Hawaii (HawaiiNewsNow) - In his State of the City address Thursday, Mayor Kirk Caldwell proposed a “vacancy fee” for residences that remain empty for most of the year.

What’s a vacancy fee and how would it work?

Caldwell pointed to one that’s proven successful in Vancouver.

Essentially, the city would levy a fine on homeowners who buy on Oahu but don’t live here for much of the year. The vast majority of such properties are purchased for investments.

And Caldwell administration contends the influx of investment property purchases — especially in Kakaako — has driven up property prices and taken much-needed rental housing off the market.

Under Vancouver’s Empty Homes tax, owners of residential property must submit a property status declaration annually to determine if their property is subject to fee.

Empty properties are taxed 1% of the property’s assessed taxable value.

That can add up. And in Vancouver, the proceeds are used for affordable housing initiatives.

On the streets of Honolulu on Thursday, there were mixed opinions on the idea of a vacancy fee.

Jacob Vandor, a realtor in Oahu, said that instead of taxing for affordable housing, the government should focus more on direct taxing and helping the mental health problems of the homeless.

“People think that homelessness is someone else’s problem,” Vandor said. “I think it’s a problem everywhere, but it’s unique here because there’s nowhere else for people to go.”

In terms of the tax, Vandor doesn’t think the general population will support it.

“I think people across the board don’t like taxes,” Vandor said. “I think if it is a tax, it has to be a direct tax on something not just general real estate.”

Adam Benton, a manager at a Waikiki surf rental company, also proposed another solution. “Maybe the mayor could consolidate them (the homeless) into one specific area,” Benton said.

William Macadamia, a Honolulu resident, has seen the homeless population grow over the years.

When asked about imposing the new tax, Macadamia recommended setting up a training program to help the homeless get a jump start, rather than having tax money go towards building affordable housing.

“I’m not sure [about the tax],” Macadamia said. “I think if we have programs for them, like job training [since] some have psychological problems, that would help.”

Copyright 2019 Hawaii News Now. All rights reserved.