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Honolulu Council's latest property tax bills aim to confront rising home values

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Honolulu City Council continues to discuss providing tax relief to Oʻahu residents by overhauling the city's real property tax code.

The council’s budget committee held a special meeting on Monday to discuss the Blangiardi administration's proposed budget for the next fiscal year, which begins in July.

Among those proposals are measures that set real property tax rates, and the administration's proposed one-time $300 property tax credit for homeowners receiving a city exemption. The credit aims at helping roughly 152,000 households and cost the city $45.5 million.

Both measures advanced out of the committee, and move to a third and final approval by the council.

The tax credit is the administration's response to rising home values in recent years, which has resulted in higher property tax bills for residents.

However, councilmembers questioned the effect a one-time credit could have on residents — especially those living paycheck to paycheck. As a result, the council formed a working group to discuss overhauling the city’s property tax code.

Council chair Tommy Waters said that among other things, the group aims to address two areas that would help long-term renters.

"One is actually amending the tiers for residential, and the second is to try to give some money back and have a one-time tax credit for folks who are renting, who own property under $1.3 million," Waters said.

"Those two things as well as some others we’re discussing in the permitted interaction group, which wouldn't go into effect this year. [It] would have to go into effect the following year."

During the committee meeting, Windward Oʻahu councilmember Esther Kiaʻāina suggested ways to help long-term renters. She cited the success of the city's pandemic-era emergency rent relief program and believes it can be translated to help residents going forward.

However, Andy Kawano, the city budget and fiscal services director, said that comes with challenges.

"I don't necessarily agree that you can do everything by affidavit or declaration, you have to look at documents. And I think even for emergency rental assistance, there was declaration signed by the applicant, but they still provided documentation," Kawano said.

"These substantially, as you've heard, increased their staff to run that program. So as we go through tax law changes, we have to think about the impact of operations and make sure we have operations funded. So we do it correctly," he said.

Another proposal Kiaʻāina suggested was to increase the administration's one-time credit to $350 or $400, and expand eligibility requirements to include landlords with long-term renters. Kiaʻāina said the hope is it would prevent landlords from raising rents, and also provide a more meaningful relief to other homeowners.

However, Kawano warned a $100 increase to the credit would cost the city an additional $15.5 million.

A working group from the council meets Tuesday to discuss the city’s real property tax code.

Casey Harlow is an HPR reporter and occasionally fills in as local host of Morning Edition and All Things Considered. Contact him at charlow@hawaiipublicradio.org or on Twitter (@CaseyHarlow).
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