The housing crisis in Hawaiʻi has reached a critical point, with residents like Wes Tashiro, a retired Hawaiian Electric Co. worker, feeling the pinch. Tashiro, who downsized from ʻEwa Beach to Makiki, has witnessed housing prices soar, making it increasingly difficult for locals to find affordable homes. One proposed solution, a tax on empty homes, has gained traction among housing advocates but has repeatedly faced opposition.
The idea of an empty homes tax aims to incentivize property owners to rent or sell their vacant units, thereby increasing the housing supply on Oʻahu. A city study suggested that such a tax could generate tens of millions of dollars annually and potentially bring up to 2,000 properties back onto the market over the next decade. However, the concept has consistently hit roadblocks at the Honolulu City Council and within Mayor Rick Blangiardi’s administration.
The Political Landscape of the Empty Homes Tax
The most recent proposal, Bill 46, was co-introduced by Council Chair Tommy Waters and council member Radiant Cordero in 2026. The bill aimed to create a new property tax rate for vacant homes, starting at 1% of the assessed value and increasing to 3% over three years. Despite attracting controversy, the bill made progress until it was ultimately postponed and allowed to die in July 2026, two years after its introduction.
Supporters of the bill, including housing advocates from the coalition Housing Now! and Council Chair Tommy Waters, argued that the tax would target wealthy offshore investors and help alleviate the housing shortage. However, opponents raised concerns about the potential impact on local residents who own second homes, either through inheritance or for personal use. Real estate agents also testified that the bill would be an administrative nightmare and might not effectively address the high housing costs.
The Role of the Real Estate Industry
The real estate industry has been a significant opponent of the empty homes tax, arguing that it would be difficult to administer and could have unintended consequences. Realtor Julie Meier testified that the bill would not help first-time homebuyers or those in need of rentals, as the properties added to the inventory would likely be unaffordable for many locals. She also expressed concern about her son’s ability to move back to Hawaiʻi due to the high cost of living.
The Mayor’s Stance
Mayor Rick Blangiardi initially supported the idea of taxing vacant homes during his first campaign in 2026. However, his administration later canceled a study on the matter, citing concerns about the city’s capacity to administer the tax and the potential for people to cheat the system. Blangiardi stated that he did not want to create a policy that would cause people to lie, as it could open up a “Pandora’s box” of issues.
The Broader Context of Empty Homes Taxes
The debate over empty homes taxes is not unique to Honolulu. Similar taxes have been implemented in other cities, such as Berkeley and Oakland in the Bay Area. In San Francisco, voters approved an empty homes tax that exempted single-family homes, but the measure was struck down by the San Francisco Superior Court, and the city’s appeal is currently pending. New York City also introduced a new pied-a-terre tax in 2026, reflecting a growing national trend.
Despite the challenges, supporters of the empty homes tax in Honolulu remain hopeful. Rebecca Soon, a former city administrator, suggested that the Department of Budget and Fiscal Services could handle the implementation by asking homeowners to attest to their occupancy status and auditing a small sample of respondents each year. However, city officials have expressed skepticism about the feasibility of such an approach.
The Future of the Empty Homes Tax in Honolulu
As the housing crisis in Hawaiʻi continues to worsen, the need for effective solutions becomes increasingly urgent. While the empty homes tax has faced significant opposition, housing advocates argue that it is a valuable tool that could help alleviate the shortage of affordable housing. Colin Moore, a political scientist at the University of Hawaiʻi Mānoa, expects that the proposal will resurface in the future, as there are only so many tools available to address the crisis.
The empty homes tax debate highlights the complex interplay between political will, administrative capacity, and the needs of residents in Honolulu. As the city grapples with these challenges, the search for sustainable solutions to the housing crisis continues.
