Maui Hotels Have the Highest Rates But the Lowest Occupancy

[sponger76]

If they raise property tax on non owner occupied property and raise the GET on everything (but exempt unprepared food which is what residents mostly eat) "Think of the things you can do with that money". That is a line from Jesus Christ Superstar but it is relevant here.

If the Government is going to provide assistance to low income people they need sources of money.

If you raise the GET on everything else, even if you exempt unprepared food you'll be raising costs for residents. Unprepared food isn't the only thing they buy. It'll cost them more to buy clothes, cars, you name it.

 

[Tamaradarann]

If you raise the GET on everything else, even if you exempt unprepared food you'll be raising costs for residents. Unprepared food isn't the only thing they buy. It'll cost them more to buy clothes, cars, you name it.

Also raise the property tax non owner occupied property.......

..... Then "Think of the things you can do with that money".

 

[sponger76]

Also raise the property tax non owner occupied property.......

..... Then "Think of the things you can do with that money".

Raising property tax on non owner occupied property goes back to impacting renters. Those costs will be passed along from the landlord to the tenant. This has been pointed out over and over again. Think of the things those locals who can't afford to buy a house will no longer be able to do with that money....

 

[Tamaradarann]

Raising property tax on non owner occupied property goes back to impacting renters. Those costs will be passed along from the landlord to the tenant. This has been pointed out over and over again. Think of the things those locals who can't afford to buy a house will no longer be able to do with that money....

First of all all absentee owners are not renting their units. In addition some that do rent are not renting to working class people. I have seen rents in the 10,000/month range.

Furthrmore, I just got a notice from the Condo Association of Hawaii saying that there are subsities that are available for those that are low income (under 150K income but first preference given to under 100K income) due to not being able to pay your mortgage or rent due to the Corona Virus. Can't we come up with a method to subsidies low income renters do to the increase in rent that is a result of the increase in property taxes (I don't know if I consider someone making $145K/year low income) with the money we collect from these higher property taxes?

 

[geist1223]

In British Columbia Canada if a non-Canadian Citizen/non-Resident Alien buys a House, Condo, etc there is a 20% Tax added on to the purchase price. Also if non-Canadian Citizen/non-Resident Alien spends less than "X" days (I think 180 days) then the Property Tax goes up a lot.

 

[sponger76]

First of all all absentee owners are not renting their units. In addition some that do rent are not renting to working class people. I have seen rents in the 10,000/month range.

Furthrmore, I just got a notice from the Condo Association of Hawaii saying that there are subsities that are available for those that are low income (under 150K income but first preference given to under 100K income) due to not being able to pay your mortgage or rent due to the Corona Virus. Can't we come up with a method to subsidies low income renters do to the increase in rent that is a result of the increase in property taxes (I don't know if I consider someone making $145K/year low income) with the money we collect from these higher property taxes?

Absentee owners absolutely are renting their units. Where have you been? Lots of long-term rentals, both single family home and apartments, at least on O'ahu, are owned by landlords who do not live in the units. Some of those owners are individuals and corporations on the mainland. The last apartment I rented when I still lived there was owned by a mainland company. The apartments in the building (24 floors) were not all owned by one company or individual, each was owned separately.

The subsidies you speak of were funded by the federal government through COVID-specific legislation, and was not unlimited. They distributed a certain amount to each state to administer. That overall took a huge sum of money, which as a country we cannot afford to spend every year. That would be hundreds of billions of dollars every year across the country. Hawaii alone received $200 million. You raise property taxes enough to raise $200 million every year in Hawaii, you better believe it will come back to bite regular people in the butt, not just rich people or companies that own the properties. Plus, if you raise $200 million (or any amount) in property taxes from the owners of rental properties causing rents to rise, and then give it to the people who are renting those properties, it just goes right back into the pockets of the owners you took it from in the first place, so the money is moving in a circle for no reason. How is that benefitting anyone? You really, truly don't think about or understand the second and third order effects of your proposals. The good idea fairy is alive and well in this one.

 

[Tamaradarann]

Absentee owners absolutely are renting their units. Where have you been? Lots of long-term rentals, both single family home and apartments, at least on O'ahu, are owned by landlords who do not live in the units. Some of those owners are individuals and corporations on the mainland. The last apartment I rented when I still lived there was owned by a mainland company. The apartments in the building (24 floors) were not all owned by one company or individual, each was owned separately.

The subsidies you speak of were funded by the federal government through COVID-specific legislation, and was not unlimited. They distributed a certain amount to each state to administer. That overall took a huge sum of money, which as a country we cannot afford to spend every year. That would be hundreds of billions of dollars every year across the country. Hawaii alone received $200 million. You raise property taxes enough to raise $200 million every year in Hawaii, you better believe it will come back to bite regular people in the butt, not just rich people or companies that own the properties. Plus, if you raise $200 million (or any amount) in property taxes from the owners of rental properties causing rents to rise, and then give it to the people who are renting those properties, it just goes right back into the pockets of the owners you took it from in the first place, so the money is moving in a circle for no reason. How is that benefitting anyone? You really, truly don't think about or understand the second and third order effects of your proposals. The good idea fairy is alive and well in this one.

I know about the derivation of the subsidies for Covid. I just used that as a example of subsidies. While I am not flush with money I am able to deal with the cost of living here in Hawaii by buying a low price Condo, not having a car, using the Senior Bus Pass for $45/year. As others have stated some can't deal with the high cost of living in Hawaii even though they work and maybe even work 2 jobs.

I am not sure what your definition of REGULAR PEOPLE is but I do know that the property taxes in Hawaii are extremely low. I pay $1700/year on my Condo in Honolulu that is worth double what my House on Long Island is worth which I pay $9000/year in taxes.
These low taxes are a gift to the those who buy expensive properties and live part time in Hawaii. It is also a gift to those that buy investment properties. I am suggesting doing something about it. I am happy with my $1700/year in property taxes. Those that have low incomes in Hawaii are the ones that are hurting since the cost of housing is too high. Bigger money from those that don't live in Hawaii full time are driving up the price of property and paying low property taxes. I am suggesting doing something about it.

 

[ScoopKona]

I am not sure what your definition of REGULAR PEOPLE is

Regular people don't own property here. They rent. So they are more susceptible to property tax increases -- they can't deduct them from their income taxes like you can.

A little empathy goes a long way...

 

[sponger76]

I am not sure what your definition of REGULAR PEOPLE is but I do know that the property taxes in Hawaii are extremely low. I pay $1700/year on my Condo in Honolulu that is worth double what my House on Long Island is worth which I pay $9000/year in taxes.

I can say that most regular people in Hawaii can't afford a condo in Honolulu, much less that plus a house in Long Island.

 

[Tamaradarann]

Regular people don't own property here. They rent. So they are more susceptible to property tax increases -- they can't deduct them from their income taxes like you can.

A little empathy goes a long way...

Regular people don't own property here. They rent. So they are more susceptible to property tax increases -- they can't deduct them from their income taxes like you can.

A little empathy goes a long way...

Are you saying that the reason that property taxes stay so low in Hawaii is so that the owners of rentals keep the rents lower. That is a argument that I have never heard before. I need to discuss that one with others since the logic is a new one on me. While I have never been in favor of it before, it seems like that would be an argument for rent control like they have in New York City.

We do not itemize deductions on our income tax returns so propety taxes are not deductble for us.

 

[lotus921v]

So if I understand what I just read, even though the money they're making per room has increased substantially since before the pandemic, a third of rooms still go unoccupied each night. Seems to me they could reduce the prices some, and increase the occupancy rates, bringing in more revenue overall.

Does this include timeshares as well, or just hotels?

Dave

If they can make their revenue with higher room rates without paying extra housekeeping or maintenance wages, why would they want higher occupancy?

 

[Tamaradarann]

I can say that most regular people in Hawaii can't afford a condo in Honolulu, much less that plus a house in Long Island.

We can't afford both a Condo in Honolulu and a house in Long Island either that is why we are selling our house in Long Island since the recent inflation has stretched our finances to the limit. Condo's in Hawaii are less expensive than Houses that is one of the reasons we own a Condo in Honolulu.

To summarize you and ScoopKona are saying that regular or average people in Hawaii rent and don't own where they live, so that the concern with raising property taxes is that the owners of rental units would raise the rent which would hurt the regular or average person. What if the taxes were not raised on the lower assessed properties say 1 million or 700K. How many regular people rent a property that is assessed over a million? I know my Condo is assessed way under a million.

 

[sponger76]

We can't afford both a Condo in Honolulu and a house in Long Island either that is why we are selling our house in Long Island since the recent inflation has stretched our finances to the limit. Condo's in Hawaii are less expensive than Houses that is one of the reasons we own a Condo in Honolulu.

To summarize you and ScoopKona are saying that regular or average people in Hawaii rent and don't own where they live, so that the concern with raising property taxes is that the owners of rental units would raise the rent which would hurt the regular or average person. What if the taxes were not raised on the lower assessed properties say 1 million or 700K. How many regular people rent a property that is assessed over a million? I know my Condo is assessed way under a million.

Well, since the median single family home sales price on O'ahu is over a million, (see https://www.locationshawaii.com/learn/market-reports/oahu-real-estate-report/) I'd say a fair amount of regular people are renting property that is assessed over a million. Yes, condos are a lot lower, but that is not the majority of the available rental market.

 

[DaveNV]

If they can make their revenue with higher room rates without paying extra housekeeping or maintenance wages, why would they want higher occupancy?

I guess I'd expect a hotel would want to fill their rooms. Reducing prices some, but getting increased occupancy at the lower pricing, would make the company more money in the long run. Return-visitors would happen more, word of mouth would help, and so forth. The old adage about a "short term nickel vs. a long-term quarter."

Dave

 

[ScoopKona]

Are you saying that the reason that property taxes stay so low in Hawaii is so that the owners of rentals keep the rents lower.

I can't believe I'm explaining this. But property taxes are set by the county. They decide on the assessed value. And they decide the mill rate. And from that, property taxes are determined. Landlords are just as powerless about taxes as other property owners. They get a bill. They pay the bill. They pass taxes off to their tenants, along with maintenance, insurance and profit.

Raising property taxes will directly raise rent. Landlords don't rent property out of the goodness of their hearts. It's a difficult and often dirty job. So they expect monthly income for their trouble.

For the umpteenth time. The entire strategy here is for commercial short-term landlords -- hotels, AirBnBs traditional BnBs, campgrounds and timeshares -- to make the same money with less occupancy. Lower occupancy means fewer traffic jams and less strain on infrastructure. The pendulum has clearly swung too far in the direction of "let tourist do whatever they please." Time to rein it in.

 

[lynne]

We can't afford both a Condo in Honolulu and a house in Long Island either that is why we are selling our house in Long Island since the recent inflation has stretched our finances to the limit. Condo's in Hawaii are less expensive than Houses that is one of the reasons we own a Condo in Honolulu.

To summarize you and ScoopKona are saying that regular or average people in Hawaii rent and don't own where they live, so that the concern with raising property taxes is that the owners of rental units would raise the rent which would hurt the regular or average person. What if the taxes were not raised on the lower assessed properties say 1 million or 700K. How many regular people rent a property that is assessed over a million? I know my Condo is assessed way under a million.

I do have a difference of opinion on the long term rental rates. We purchased our home here in 2001 and hired a property manager (on-island property managers are required for all rentals when the owner is not living in the county or state) at 20% commission and rented our 3 bedroom/2 bath home on 5 acres (macadamia nut orchard also on the property) for a grand total of $1400/month and we contracted with a local macnut processor to attend to the macnuts and orchard and all the profits would be theirs. We also paid to have the acreage mowed every other week. Our property taxes were higher since we did not live in the state, but all we wanted to do was to keep the house occupied and break even with our costs. We kept the home rented until we moved permanently in 2006 and took over the orchard maintenance as well as the property upkeep. After we moved here permanently, we applied as permanent residents and a year later our property taxes were adjusted to reflect that we were now full time residents.

Yes, we are probably outside the norm but there are others who operate their long term rental properties to break even and support our local residents. One of my friends purchased a home in Kamuela due to the estate sale of her mom's home in California and did a complete remodel. That home is being rented without a crazy profit to locals as well.

It is the short term rentals where the property owners can make large profits. Most of the long term rentals are not in the same category.

My advice to you is if you genuinely feel that property taxes are not fair and you want to do something, contribute to the local food banks, habitat for humanity and other services that desperately need funds to help our residents who are just getting by.

 

[lotus921v]

I guess I'd expect a hotel would want to fill their rooms. Reducing prices some, but getting increased occupancy at the lower pricing, would make the company more money in the long run. Return-visitors would happen more, word of mouth would help, and so forth. The old adage about a "short term nickel vs. a long-term quarter."

Dave

Except that it costs more to turn over and keep up more rooms which increases wear and tear and wage overhead.

I own a medical practice. I have a minimum reimbursement threshold to what I will accept or I begin providing services and taking on increased liability to break even or lose money.

Busier isn’t always better.

I am sure those resorts have done a cost share analysis of their rates

 

[DaveNV]

Except that it costs more to turn over and keep up more rooms which increases wear and tear and wage overhead.

I own a medical practice. I have a minimum reimbursement threshold to what I will accept or I begin providing services and taking on increased liability to break even or lose money.

Busier isn’t always better.

I am sure those resorts have done a cost share analysis of their rates

I get what you're saying. But it seems to me that their paying customers would be better served if they felt like they were getting good value for the dollar, and not feel like they were being taken advantage of.

Dave

 

[Henry M.]

I don't feel taken advantage of just because one hotel is more expensive than another. In fact, a less crowded location with better services is more attractive than a cheaper place that cuts corners to service more guests with a given staff size.

 

[ScoopKona]

I don't feel taken advantage of just because one hotel is more expensive than another. In fact, a less crowded location with better services is more attractive than a cheaper place that cuts corners to service more guests with a given staff size.

Hear, hear!

And life is better for everyone -- tourists and residents -- when there aren't daily traffic jams. When the restaurants aren't always in the weeds. (Dans le merde for the classically-trained.) When the infrastructure isn't strained to the breaking point.

We really need to focus on quality of life, and not just "heads in beds."

 

[Henry M.]

The problem is this doesn't accommodate the very lowest incomes. Eventually those that can afford to pay to come will pay enough to support those that provide services. That group will not necessarily include native Hawaiians or others at the very low end. The whole island will become a playground for the very wealthy and those that serve them. I don't see how you would be able to accommodate low incomes in a place with very limited space to build and live. If the place is attractive, the laws of supply and demand will set the price and the level of income necessary to afford the place. You might find temporary ways to sustain very low incomes, but eventually the place will be occupied by those that can afford it and are willing to pay to be there. They will displace those that don't have the means to compete with them to buy up the nice property. It happens to every nice place you might want to live in.

 

[ScoopKona]

The problem is this doesn't accommodate the very lowest incomes.

The very lowest incomes aren't visiting Hawaii anyway.

This is squarely in "first world problem" territory.

 

[Tamaradarann]

I do have a difference of opinion on the long term rental rates. We purchased our home here in 2001 and hired a property manager (on-island property managers are required for all rentals when the owner is not living in the county or state) at 20% commission and rented our 3 bedroom/2 bath home on 5 acres (macadamia nut orchard also on the property) for a grand total of $1400/month and we contracted with a local macnut processor to attend to the macnuts and orchard and all the profits would be theirs. We also paid to have the acreage mowed every other week. Our property taxes were higher since we did not live in the state, but all we wanted to do was to keep the house occupied and break even with our costs. We kept the home rented until we moved permanently in 2006 and took over the orchard maintenance as well as the property upkeep. After we moved here permanently, we applied as permanent residents and a year later our property taxes were adjusted to reflect that we were now full time residents.

Yes, we are probably outside the norm but there are others who operate their long term rental properties to break even and support our local residents. One of my friends purchased a home in Kamuela due to the estate sale of her mom's home in California and did a complete remodel. That home is being rented without a crazy profit to locals as well.

It is the short term rentals where the property owners can make large profits. Most of the long term rentals are not in the same category.

My advice to you is if you genuinely feel that property taxes are not fair and you want to do something, contribute to the local food banks, habitat for humanity and other services that desperately need funds to help our residents who are just getting by.

We do donate to the food bank and actually are active in getting other in the Condo to do the same. We have run fun raisers for Habitat for Humanity and have helped build homes. However, I don't need your advice about what I should do if I feel property taxes are not fair.

Frankly I don't care what they do about taxes nor do I care if they charge tourists even $1000/trip. I have been giving my opinion on tax issues If Hawaii goes in those directions fine, if they go in a different direction fine as well. By selling our house on Long Island we will be a financial position to deal with the inflation, coming recession, federal tax hikes, etc.

 

[Tamaradarann]

I can't believe I'm explaining this. But property taxes are set by the county. They decide on the assessed value. And they decide the mill rate. And from that, property taxes are determined. Landlords are just as powerless about taxes as other property owners. They get a bill. They pay the bill. They pass taxes off to their tenants, along with maintenance, insurance and profit.

Raising property taxes will directly raise rent. Landlords don't rent property out of the goodness of their hearts. It's a difficult and often dirty job. So they expect monthly income for their trouble.

For the umpteenth time. The entire strategy here is for commercial short-term landlords -- hotels, AirBnBs traditional BnBs, campgrounds and timeshares -- to make the same money with less occupancy. Lower occupancy means fewer traffic jams and less strain on infrastructure. The pendulum has clearly swung too far in the direction of "let tourist do whatever they please." Time to rein it in.

You convinced me that raising property taxes will raise rents. Wow, since we plan on selling our house on Long Island and residing full time in Hawaii, I am sure glad that my property taxes are lower here in Hawaii. Also, since we don't need a car here we are also glad that we don't need to buy a car, pay for parking, pay for car insurance, pay for car maintenance, or pay for gas here in Hawaii. We also don't need oil for heat. I think it will be less expensive for us to live in Hawaii than on Long Island.

 

[slip]

Just to throw this out there again. The only thing that has been proposed is a $50 fee for visitors and paying for some parking on areas on Maui is starting next year. I haven't seen any talk about changes in taxes.