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If there ever was a bill that attempted to address the symptoms of a problem instead of the causes, would be it.

Currently being considered by the Honolulu City Council, the bill seeks to create more affordable housing on Oahu by taxing “empty homes,” of which, the bill estimates, there are about 34,000.

This might seem like a good idea. However, not only would the bill be unlikely to achieve its goal, it would impose extraordinary burdens on existing homeowners through sky-high taxes, a demand that they surrender virtually all of their privacy rights to city investigators, and severe and potentially unconstitutional penalties if the homeowners were found in violation of the proposed law.

A supreme irony of the “empty homes tax” bill is that it actually recognizes the underlying causes of Oahu’s housing shortage when it states:

In other words, why should the city raise taxes on homeowners and threaten them with severe fines and invasions of privacy when it could simply direct its efforts toward removing the obstacles that are, as the bill admits, the root cause of the housing shortage: “costly construction, long delays for development and permitting, and [not making available] more land for development?”

In particular, Bill 9 would implement a 3% property tax surcharge on Oahu homes that are vacant or “empty” for at least six months a year, compared to the current tax of 0.35%. To put this in context, the property tax on an “empty home” valued at $600,000 would be $18,000, compared with $2,100 currently.

More importantly, an “empty homes” tax would not necessarily free up affordable housing. The homes this bill targets — those owned by wealthy mainland individuals — are often not the homes that average Oahu residents can afford anyway.

A. Kam Napier, editor-in-chief of Pacific Business News, when a similar measure was proposed in 2019. He wrote that “all it would do is put some luxury Kakaako apartments into the rental pool, renting for $5,000, $6,000 or even $8,000 a month. I don’t think that satisfies anyone’s desire for more affordable housing.”

“Empty homes” taxes were imposed in 2017 in Vancouver, Canada, but Canada’s in 2018 that “in its first year of implementation, the tax appears to be doing little to achieve its stated goal.”

In November 2021, the Vancouver Sun the tax’s effect on rental availability was hard to determine amidst other taxes, housing regulation and broader economic changes.

Just last month, Camille Squires wrote, “Even where successful, vacancy taxes haven’t been enough to meaningfully bring down prices across a city. To meet demand, cities need more new construction.”

As for the privacy issue, Bill 9 proposes a highly invasive enforcement mechanism to determine whether a house is vacant six or more months a year. This would likely require adding to the workload of existing city employees, or hiring additional city employees, as well as authorizing the city to demand from Oahu homeowners all sorts of personal information.

According to the bill, this could include vehicle registrations, government IDs, driver’s licenses, utilities records, mailing addresses used for personal bank and credit accounts, tenancy agreements, occupancy agreements, proof of income and general excise taxes paid for rental income, proof of receiving or providing medical care by the owner or tenant that precluded occupancy of the property, proof of sale or transfer of ownership, sale activity efforts, court orders and proceedings, proof of military orders of deployment, building permits and applications — and more.

This would likely require adding to the workload of existing city employees.

Rule violations would involve steep fines — $25,000 a day for each offense — and even possible foreclosure.

As an additional selling point, Bill 9 aims to bring more housing onto the market by dedicating all its revenues to the city’s affordable housing fund — with 5% skimmed for “administrative costs.” But this would only help perpetuate the city’s habit of spending too much on housing development that makes little difference to Oahu’s affordable housing shortage.

As Bill 9 acknowledges, the underlying causes of Hawaii’s housing shortage is “costly construction, long delays for development and permitting, and [not making available] more land for development.”

Instead of Bill 9, the Council should be considering bills that would address those issues.