Helping those without housing and others to stay in housing is a top priority for me, so I would easily support a simple solution as appeared in the Sunday article, May 15, 2022. All of the council wants to increase the supply of homes for our residents and decrease the number of houses focused on visitors or investors.
Poor policy design can create more problems then it solves.
The action proposed at the budget hearing last Wednesday would not set in place an on-going mechanism to tax vacation rentals and redirect that funding to creating affordable housing. The newspaper reporter did not effectively communicate the nuance that the real property tax increase on transient vacation rentals proposed by Councilmember Luke Evslin in our budget hearing would only shift money in the budget to affordable housing ONE TIME, THIS YEAR.
The proposed annual tax increase of roughly $4 million would actually go into the general fund and not be earmarked for affordable housing. It requires a charter amendment on the ballot to create a special account for affordable housing from a specific tax/revenue source. The county is constantly faced with demanding chartered responsibilities, such as improving infrastructure needs and collective-bargaining commitments for our employees, etc., that in all likelihood would consume that new revenue every year rather than to distribute it to affordable housing.
The decision to raise this tax would have been proposed and passed within 30 minutes without any public awareness, very probably forcing some homes to be sold as a result, carrying this increased tax burden with the sale to the new buyer. Only people with wealth can make such a purchase, not a typical, local working family.
The tax change that is needed is an ability for the tax rate to change in the middle of a year to reflect the accurate usage for the new buyer. Because the existing tax rate follows along with a home sale, almost no TVR’s or “resident investor” home sales transfer back over to a local home buyer.
The low homestead real property tax class is not applied at the time of the sale. They have to qualify to endure the $40,000/year tax rate (or whatever tax value applies to the specific house) for the first year, which is calculated into a monthly lendable amount. In contrast, the low homestead tax rate assists the up-sale transition to TVR or residential investment homes. This policy change would do more to return houses from vacation or investment applications into residential homes.
Almost half of the TVRs are owned by local families who supplement/support their families on renting a home. Many people actually live in their homes part time, maybe many months in the year, and do not generate revenue full time. These would be the houses most likely forced into sales.
The goal of shifting housing from visitor accommodation to housing our working families is noble and worth supporting. The strategy proposed last week would not have truly resulted in that outcome. I believe it would do more harm than good. That is my reason for voting NO.
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Felicia Cowden is a Kaua‘i county councilmember.
I’d like to know how many of the council members (or their immediate family members) own vacation rentals themselves ! If any do they should recuse themselves from voting on this issue because it’s an obvious conflict of interest.
Good policy starts with common sense. Running around town every two years looking for votes singing the same tune with limited results is not what Kauai needs to solve its housing problem.
As we see on a national level unless common sense prevails, Kauai will be destined to follow its idiot idols in California.
It is often said that vacation rentals are diluting the availability of affordable housing for the local residents…Not So! The dwellings used for vacation rentals are generally upscale and would not be rented at “affordable” rates. It is far more likely that wealthy non-residents would purchase these properties as second or third homes and occupy them for just part of the year, leaving them vacant the rest of the time as they do not need the rental income.
I want to congratulate and thank those of you that recently voted against approving an additional TAT tax on Kauai.
The mentality of such a short sided attempt to yet further increase the cost for anyone visiting the State is blind and will do nothing to increase affordable housing. The focus should be making ways for local residents to find and keep employment that pays a living wage and reduce those low paying jobs related to tourism.
Creating business opportunities or investing in businesses that actually lessen Hawaii’s demand to import durable goods from the mainland is where the focus of the three council members that voted for additional tourist taxes should be. Those three and many others have waged a war on tourism which your politicians touted years ago. Focus on building an economy not attempting to charge others so the locals get something for free.
I have learned a great deal since 2011 in dealing with your State’s taxing authority and the politics of Hawaii in general. I would like to offer some factual statistics of what being a non state resident home owner that also vacation rents their property brings to the State of Hawaii and what expenses they are actually subject too.
Since 2011 our rentals have entertained 524 guests. According to your own State Tourism web site, the average cost for a couple to visit Hawaii is $3750 per week. Averaging each stay at 7 days. Those people have brought to the state’s economy $1,960,000.00 in Taxes, airfare, rental cars, groceries, entertainment, tours, sightseeing and restaurants. Also, owning a residence in your state requires upkeep and maintenance.
Since 2011 we have injected $343,326.00 into the states economy by way of GET & Tat taxes paid to the state including totally unfair property taxes, electric bills while creating jobs for locals in cleaning, maintenance and handyman services, buying furniture & furnishings, groceries, food, tours and visiting restaurants. Totaling up these expenses we alone have injected $2,303.326.00 into the state’s economy. Where’d that money go? Your roads are falling apart, your parks are not maintained.
Your efforts to continually target non state resident property owners for exorbitant property taxes and tourists for more money is unfair to both the property owners that are bringing operational dollars to this state as well as the people visiting Hawaii, while the local residents enjoy the same activities with lower taxes and NO park user fees who use the same facilities but only off the backs of others that pay their way for them. Locals do not own those islands. How would you like it if Las Vegas charged Hawaii residents 10% tax just for coming there?
Hawaii residents on vacation, choke their roads daily, place an additional demand on their infrastructure, roads and utilities. It’s pretty much the same argument you are putting forth as a strain on their infrastructure, which is part of your tax increase justification.
Is the aloha spirit truly a way of life in Hawaii or is it is simply a marketing slogan to get more people to come there, spend their money and be taxed and fee’d to the limit as well as being verbally and at times physically assaulted by some of the local residents? That also is a fact of what is occurring there. Is this Aloha spirit? Apparently so!
Your state cannot sustain its existence without importing durable goods from the mainland or worldwide tourism which was created years ago. You import over 95% of your food and durable goods to your state because you failed to create a self-sustaining economy or job sector. Your politicians over the years created this scenario by selling your state to tourism. Their vision was, sit back, do absolutely nothing and collect money from everyone else that visits by selling the state. However, they were out to lunch when it was noted, “You don’t get tourism money without actual tourists”, and you do not get the benefit of being a state in America w/o free travel. The result? A population that demands they get everything for free while others pay their way and are continually fee’d and taxed past comprehension for their benefit.
Hawaii in my opinion is one of the most beautiful places on earth. It is destined to failure because these atrocities have gone on far too long and there are no more options. You will continue to raise tourism costs, taxes and fees while the tax monster mismanages the funds collected but can never make the local population pay their fair share. They can’t. And they don’t! You will chase away tourists.
Additional park parking fees at parks but only for tourists, and now conversations in regards to an additional 1% TAT tax so tourists can provide affordable housing? This attitude is the sole reason locals are demanding more free things. Hawaii shows aloha and is not racists? Lecturing the tourists to show aloha when coming there? You really should practice what you preach!
The only thing you are destined to do is raise the cost of vacationers coming to Hawaii in which they will eventually go elsewhere. When that happens (and it will) Mr. Luke Evslin you can help explain how you helped increased the cost for tourists and why Hawaii residents have lost their jobs, houses, their livelihood because YOU had this idea that tourist should pay for locals housing instead of creating Entrepeneur and business opportunities so they can support themselves with a livable wage instead of depending on tourism and the low wages they pay.
Politicians today must have a forward-thinking vision to best serve their constituents. Mr. Evslin is looking in the rearview mirror instead of the windshield!