The legislation introduces a new financial incentive for owners of vacant properties: a surcharge calculated based on the average annual rental value of the property. This surcharge is designed to discourage property owners from leaving units vacant and to encourage them to either rent out or sell these properties. The projected revenue from this initiative is substantial, with estimates suggesting it could exceed $500 million annually. The bill also establishes a Vacant Homes Special Fund that will allocate these surcharges towards enforcement and rental assistance programs for residents.
SB2547, also referred to as the Vacancy Surcharge Bill, aims to address Hawaii's growing housing crisis by imposing an annual surcharge on residential real property that remains vacant for 120 days or more per year. The bill responds to the urgent need for more affordable housing options in Hawaii, as it is estimated that the state would require an additional 64,700 to 66,000 housing units by 2025, a goal that is currently not being met. One of the main objectives of this bill is to reduce the detrimental impact of vacant properties, often owned by off-island investors, on the local housing market, which contributes to inflated rental prices and exacerbates the issue of housing affordability for residents.
Notable points of contention regarding SB2547 include concerns from property owners about the fairness and potential financial burden of the surcharge, especially for those who may have legitimate reasons to keep their properties vacant, such as personal circumstances or renovations. The bill outlines specific exemptions for certain situations, including the death of the owner or significant renovations, thereby attempting to balance the need for housing with the rights of property owners. Additionally, opposing views may arise around the enforcement aspects of the bill, including how well the county disclosures and compliance would be managed.