March 23, 2018
According to this recent study, over half of Hawaii’s 23,000 vacation rentals are owned by out-of-state residents. On Kaua’i, 1 in 8 homes is a vacation rental. On Maui- where non-residents dominate the housing market- it’s 1 in 7. (It’s a staggering 1 in 3 in Lahaina.) Many people I know own property in Hawai’i, yet reside elsewhere. The majority of them were not born and raised in Hawai’i. Their homes- condos, houses and even mansions- sit empty a good chunk of the year. They largely are, bless their hearts, both immune to and ignorant of the plight faced by so many of us who are born and raised here and can hardly afford to purchase land and dwelling.
I would like to see tax reform that severely curbs out-of-state vacation rental operators as well as non-resident home owners who speculate on property in Hawai’i for the sole purpose of investment. Too many people are using Hawai’i as a piggy bank. I would also like to see protection against rising property taxes for local families- especially native Hawaiians- who have owned and lived in their dwellings for long periods of time and do not plan to sell, but rather will pass their property onto family members. I have seen Hawaiian families lose their homes because their surrounding neighborhoods have been turned into luxurious gated communities, jacking their tax burden to levels no retiree can afford. It is a sad sight to witness, indeed.
This game of flipping is pricing too many out of this market. The development companies- Howard Hughes Corp, A&B, Kamehameha Schools, and others- are being managed by Wall Street mentality players who worship balance sheets without regard for the future of these islands. They have no issue transforming Hawai’i into an elite haven. There is demand from Asia, Russia, America and other places. Russians are coming to Kaua’i with $15-$20 million cash and buying huge tracts of the North Shore. The new condos fronting Ala Moana are going for upwards of $30 million, and my own friends are cheering this on as they experience profit from such sales in one way or another.
We cannot grow endlessly without understanding- and acknowledging- the severe consequences of unchecked development and under-regulated real estate. We are fast becoming a haven for the kind of rich who don’t even care to reside here: Hawai’i a week a year, hit some restaurants, watch a sunset, shop some luxury stores and off to the next “exotic” destination.
At some point we, the people of Hawai’i, will face a decision: will we continue down the path of American values, in which land is a mere commodity, or will we heed the wisdom of the ancient Hawaiian ways, in which land is a sacred source of water, food and our special and unique way of life? Because we have all been born into this game, it will take a great education and movement of mass mind to cocreate a long term solution. But first, we must recognize and acknowledge the problem:
Hawai’i is for sale and you and I can’t afford her.