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Housing costs are primarily a function of supply and demand. Most of the recent efforts to reduce the cost of housing in Hawaii have been aimed at increasing the supply. However, the high cost of housing here is largely due to strong demand for second homes and residential investment properties by nonresidents.
We cannot prevent nonresidents from purchasing residential properties or operating their properties as vacation rentals where it is legal to do so, but we can take steps to dampen the demand by using the property tax system to create disincentives for investors and speculators, and incentives for owner occupants and long term rentals.
Hawaii has the lowest property tax rates in the nation. Investors who have driven up the cost of housing can afford to pay higher property taxes to support essential services and subsidize affordable housing that is only available for rent to people who live here.
Jeff Griswold
Kailua
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