Legislators are looking for ways to ease the cost of housing in Hawaii. One potential target they’re looking at: foreign investors.
The Hawaii state Senate passed a bill this week that would prevent foreign individuals and businesses from buying residential real estate in the Islands. Senate Bill 3110 states that international buyers drive up housing prices by introducing artificial competition.
The bill comes at a time when foreign purchases of residential real estate properties has been declining. According to data from Title Guaranty, less than 3% of the homes sold in Hawaii last year were purchased by foreign buyers.
That’s 539 homes, down 42% from the 929 properties foreign buyers bought in 2018.
Nearly 80% of the roughly 16,000 homes sold in 2019 were purchased by local buyers. The second largest group of purchasers were those from California, who bought about 1,500 properties.
In written testimony opposing the bill, Ken Hiraki, director of government affairs for the Hawaii Association of Realtors, noted that Hawaii faces a shortage of 65,000 housing units needed by 2025. The bill would do little to resolve that shortage, and could frighten off the foreign investment that has been financing the construction of some new apartment buildings.
The bill now goes to the House for consideration.