Maui Hotels Have the Highest Rates But the Lowest Occupancy

[JIMinNC]

A differential property tax, however (such as taxing second homes at a much higher rate) would not have the same result because it is possible (and likely) that Honolulu residents have second homes on one of the outer islands. Ergo, it would not be discriminatory against out-of-state residents because it applies to all second homes.

That would be unworkable. What’s a ”second home?” How do you police that?

Actually, Beaufort County, South Carolina does just what @vacationtime1 is suggesting. As an owner of a condo on Hilton Head Island, but with a primary residence outside of the county (actually in the Charlotte, NC area), we pay a much higher property tax assessment rate than a full-time HHI resident. Our taxes on our condo are about 40% higher than the taxes on our primary home in the Charlotte area, even though the current tax value of the condo is 40% less than the Charlotte home. (Although, the price appreciation of the coastal properties has been so high over the last three years that the condo now may have a market value almost as much as our Charlotte house, but the 2022 tax assessment value is still based on old 2019 property values. When the new property re-valuations come into play for 2023, our HHI property tax is going to skyrocket. It may be double what we pay for our permanent residence in NC. Ugh!)

The way Beaufort County decides who pays the higher rate is a basket of things like your drivers license address, where you pay taxes and vote, etc. All the things you need to do to establish legal residency. We have some neighbors who own a house on HHI but who also had a house in our neighborhood. They recently sold their Charlotte house and are now renting an apartment here in preparation for a planned 2023 retirement to their HHI house. They are in the process of changing their drivers licenses, tax filings, and voter registration to their HHI home so they can qualify for the much lower resident property tax rate.

 

[csodjd]

Actually, Beaufort County, South Carolina does just what @vacationtime1 is suggesting. As an owner of a condo on Hilton Head Island, but with a primary residence outside of the county (actually in the Charlotte, NC area), we pay a much higher property tax assessment rate than a full-time HHI resident. Our taxes on our condo are about 40% higher than the taxes on our primary home in the Charlotte area, even though the current tax value of the condo is 40% less than the Charlotte home. (Although, the price appreciation of the coastal properties has been so high over the last three years that the condo now may have a market value almost as much as our Charlotte house, but the 2022 tax assessment value is still based on old 2019 property values. When the new property re-valuations come into play for 2023, our HHI property tax is going to skyrocket. It may be double what we pay for our permanent residence in NC. Ugh!)

The way Beaufort County decides who pays the higher rate is a basket of things like your drivers license address, where you pay taxes and vote, etc. All the things you need to do to establish legal residency. We have some neighbors who own a house on HHI but who also had a house in our neighborhood. They recently sold their Charlotte house and are now renting an apartment here in preparation for a planned 2023 retirement to their HHI house. They are in the process of changing their drivers licenses, tax filings, and voter registration to their HHI home so they can qualify for the much lower resident property tax rate.

Different facts. That is at the County level. The Constitution doesn’t bar a County doing this from those living in other Counties. It is only at the state level that you run afoul of the 14th amendment. Because that has an equal effect across all counties no matter what state they are located in, that would pass muster.

But I also think that “cracking down” on owners of second homes in Hawaii is not going to move the needle on the change they are seeking, does not address the problem, and is directing their ire at exactly the wrong population.

 

[JIMinNC]

Different facts. That is at the County level. The Constitution doesn’t bar a County doing this from those living in other Counties. It is only at the state level that you run afoul of the 14th amendment. Because that has an equal effect across all counties no matter what state they are located in, that would pass muster.

But I also think that “cracking down” on owners of second homes in Hawaii is not going to move the needle on the change they are seeking, does not address the problem, and is directing their ire at exactly the wrong population.

Each Hawaii county could pass such a tax ordinance which would then apply to second home owners from other Hawaii counties, as well as those from out of state, or even other countries.

But my post above was referencing your comment in post #120 above that said:

“That would be unworkable. What’s a ‘second home?’ How do you police that?”

My interpretation was that statement wasn’t addressing the 14th Amendment Constitutional question, but was instead questioning how a second home could be defined and policed in a jurisdiction’s property tax code. My example of HHI was simply how one jurisdiction is doing that.

 

[vacationtime1]

What Hawaii could do and what Hawaii should do are not necessarily the same.

imho, the first step Hawaii should take is to reduce or eliminate short term vacation rentals (AirBnB, VRBO, etc.). Not only would that reduce the number of tourist beds and therefore the number of tourists, but it would also increase the housing supply because these properties would be available for residential use rather than transient use. In addition, it would reduce the demand for housing because investors would no longer have the same economic incentive to buy them for use as short term rentals. More supply + less demand = lower housing prices. Econ 101.

The problem is that so many short term rental properties have already been approved and are operational. Governmental officials have lacked foresight -- and will.

 

[csodjd]

What Hawaii could do and what Hawaii should do are not necessarily the same.

imho, the first step Hawaii should take is to reduce or eliminate short term vacation rentals (AirBnB, VRBO, etc.). Not only would that reduce the number of tourist beds and therefore the number of tourists, but it would also increase the housing supply because these properties would be available for residential use rather than transient use. In addition, it would reduce the demand for housing because investors would no longer have the same economic incentive to buy them for use as short term rentals. More supply + less demand = lower housing prices. Econ 101.

The problem is that so many short term rental properties have already been approved and are operational. Governmental officials have lacked foresight -- and will.

Those rentals also draw in a price-sensitive consumer, less likely to spend “freely” in the community and generating less tax revenue. I’m not sure Hawaii wants to chase away people that are spending $900/night for a hotel room. The short-term home rentals are sometimes families, but often are 2-4 friends sharing cost and finding a place to stay for $100/nt/person.

On the flip side, if you paid for and own a home, pay your taxes, etc., should the government tell you who you can rent it to? Are we leaning too hard on government and giving them too much power over our right to earn money?

 

[csodjd]

Each Hawaii county could pass such a tax ordinance which would then apply to second home owners from other Hawaii counties, as well as those from out of state, or even other countries.

But my post above was referencing your comment in post #120 above that said:

“That would be unworkable. What’s a ‘second home?’ How do you police that?”

My interpretation was that statement wasn’t addressing the 14th Amendment Constitutional question, but was instead questioning how a second home could be defined and policed in a jurisdiction’s property tax code. My example of HHI was simply how one jurisdiction is doing that.

I suspect, Maui County, for instance, could impose a higher tax on property owned by individuals whose primary residence is outside Maui County. I’m not sure that would get them where they want to go. Driving away wealthy high-spending low-density visitors seems rather counter-productive.

 

[ScoopKona]

Different facts. That is at the County level.

[and from a later post]

I suspect, Maui County, for instance, could impose a higher tax on property owned by individuals whose primary residence is outside Maui County. I’m not sure that would get them where they want to go. Driving away wealthy high-spending low-density visitors seems rather counter-productive.

County government across the state of Hawaii have more power than most US counties. Hawaii county or Maui county would be jacking up the property taxes, not Honolulu.

This is why much of the "let's do something about tourist numbers" is coming from Maui and not the state as a whole.

People seem to think that if part-time resident millionaires are targeted, the housing pool will magically grow, and everyone will get an affordable house. I disagree, strongly, with their grasp of basic economics. But that sentiment is strong. I think much of it is sour grapes -- a desire to punish people who don't have to think about how the numbers work.

Since these vacation palaces are appreciating at rocket-ship speed, even if they're shut eight months of the year, they're still great investments. However, many wealthy part-timers AirBnB their palace the rest of the year -- so they're not all low-density. My area has a bunch of these five-figure a week palaces.

 

[csodjd]

County government across the state of Hawaii have more power than most US counties. Hawaii county or Maui county would be jacking up the property taxes, not Honolulu.

This is why much of the "let's do something about tourist numbers" is coming from Maui and not the state as a whole.

People seem to think that if part-time resident millionaires are targeted, the housing pool will magically grow, and everyone will get an affordable house. I disagree, strongly, with their grasp of basic economics. But that sentiment is strong. I think much of it is sour grapes -- a desire to punish people who don't have to think about how the numbers work.

Since these vacation palaces are appreciating at rocket-ship speed, even if they're shut eight months of the year, they're still great investments. However, many wealthy part-timers AirBnB their palace the rest of the year -- so they're not all low-density. My area has a bunch of these five-figure a week palaces.

I hear a lot of the same discussion coming from Honolulu. One of the biggest complaints I hear is tourists spilling over into residential areas not intended to be for tourists, having an adverse affect on quality of life by, among other things, reducing the sense of ”community” in the area.

 

[ScoopKona]

I hear a lot of the same discussion coming from Honolulu. One of the biggest complaints I hear is tourists spilling over into residential areas not intended to be for tourists, having an adverse affect on quality of life by, among other things, reducing the sense of ”community” in the area.

Frankly, that's laughable. These palaces are behind gates, not visible from the road. And you'd have to be on a boat in the bay with binoculars to even know they're there. These houses are massive, secluded and hard to find. There is no "community" there. Never was. These are enclaves for people who don't want to rub elbows with riff-raff.

In other areas, where people are buying more modest SFRs and turning them into party houses, that's a valid concern. But the five-figure palaces around here will never be worker housing -- even if they can find a way to force all the part-time owners to sell.

And I'll keep mentioning it, the family renting out a Ohana or a spare room in order to pay the bills is going to be the first to feel the effects of any anti-AirBnB legislation. The millionaires don't care and can lawyer up. Not so the family of four which relies on renting that Ohana out a couple long weekends/weeks each month. These Ohanas and spare rooms aren't suitable for long-term tenants, either. So all enforcement is going to do is hurt the people who need the extra income the most.

 

[JIMinNC]

I suspect, Maui County, for instance, could impose a higher tax on property owned by individuals whose primary residence is outside Maui County. I’m not sure that would get them where they want to go. Driving away wealthy high-spending low-density visitors seems rather counter-productive.

Based on what I’ve seen on HHI, the higher tax rate on second homes hasn’t driven people away. Based on the last sales prior to things slowing this fall, the value of our condo may have doubled in three years. We’ll see if that holds. I doubt it will all hold. But most second home owners rent their units anyway, so they just recoup the taxes in their rental rate. We don’t rent ours, so we bear the brunt.

So I doubt a higher rate on Maui like HHI would drive many people away. It would fatten local coffers though.

 

[Tamaradarann]

That would be unconstitutional under the 14th Amendment. States cannot treat residents of other states differently or otherwise burden the right to travel freely among the states.

I take back the "out of state". Non-Resident Owners

 

[Tamaradarann]

You cannot keep using Long Island as a benchmark for teacher salaries. If you want to be fair, compare each state with cost of living and you will see an entirely different picture compared to other professions:

How much do teachers get paid in the US? | USAFacts

About $63,000 per year in 2024. That’s the annual median wage for pre-K-12 teachers across the United States, based on estimates from the Bureau of Labor Statistics. The median marks the middle point—half of teachers earn more and half earn less. The lowest-paid 10% earned $46,800 or less, while...

usafacts.org

In comparisons to other states, Hawaii teacher compensation is ranked in the top third:

Teacher Pay by State 2022

COST OF LIVING! Most of the states that are in the low teacher salary level have much lower cost of living for teachers than Hawaii or Long Island. While I grant you that Long Island has high teacher salaries, its cost of living is not even as high as Hawaii.

It is the same with minimum wage. I did a personal study when they were talking about raising the Federal Miniumum Wage. If they were going to raise the Federal Minimum wage to $15/hour. States like Alabama and Mississippi would be making their minimum wage earning people quite comfortable like middle class. If the Federal Minimum Wage was raised to $15/hour the minimum wage in Hawaii would need to be raised to $22/hour to provide an equivilent living standard taking the cost of living into consideration. From another perspective, raising the minimum wage in much of New York State and Hawaii to $15/hour would be the same as raising it to only $9/hour in those low cost of living states.

Therefore, due to the high cost of living to reward teachers adaquately their salaries should be about 50% more than the teachers in those low cost of living states in the teacher comparison survey.

 

[csodjd]

COST OF LIVING! Most of the states that are in the low teacher salary level have much lower cost of living for teachers than Hawaii or Long Island. While I grant you that Long Island has high teacher salaries, its cost of living is not even as high as Hawaii.

It is the same with minimum wage. I did a personal study when they were talking about raising the Federal Miniumum Wage. If they were going to raise the Federal Minimum wage to $15/hour. States like Alabama and Mississippi would be making their minimum wage earning people quite comfortable like middle class. If the Federal Minimum Wage was raised to $15/hour the minimum wage in Hawaii would need to be raised to $22/hour to provide an equivilent living standard taking the cost of living into consideration. From another perspective, raising the minimum wage in much of New York State and Hawaii to $15/hour would be the same as raising it to only $9/hour in those low cost of living states.

Therefore, due to the high cost of living to reward teachers adaquately their salaries should be about 50% more than the teachers in those low cost of living states in the teacher comparison survey.

I view teacher salaries a bit differently. I look at it in terms of the (relative) importance of what they do, the training, the challenges of the job. These are important considerations in my view when setting pay scales. The problem I have perceived with respect to teacher salaries is that it failed to fairly compensate them, not by a standard of living scale, but by a relative scale of how important their job is. Whatever the minimum wage may be, the minimum wage should apply to entry level, relatively low skill, low importance jobs. Teachers are not that. They should be paid well because what they do is not easy, is not something anyone can do, and is very important.

 

[vacationtime1]

My experience is that discussions about teachers' salaries are often proxies for discussions about the importance of universal public education.

Teachers' formal training is comparable to that of hedge fund managers, not dishwashers.

 

[ScoopKona]

I did a personal study when they were talking about raising the Federal Miniumum Wage. If they were going to raise the Federal Minimum wage to $15/hour. States like Alabama and Mississippi would be making their minimum wage earning people quite comfortable like middle class.

Do you consider that a problem?

The worst thing about living in the US is having to live with a population which is barely hanging on; one paycheck away from financial disaster. This is why it feels like someone turned the "crazy" knob to 11.

 

[Tamaradarann]

Do you consider that a problem?

The worst thing about living in the US is having to live with a population which is barely hanging on; one paycheck away from financial disaster. This is why it feels like someone turned the "crazy" knob to 11.

No that is not my point at all. My point was that you can't have a fair Federal Minimum Wage since the cost of living in all states is different. The members of Congress know that they could never get agreement of the majority of members to pass the bill. That is why each state needs to have a differnent minimum wage and the one in Hawaii probably should be the highest in the US.

With that said lets turn to teachers pay. Some here have said that Hawaii is in the top 1/3 of the highest paid teachers. However, with the high cost of living in Hawaii, like with the minimum wage, Hawaii probably should be the highest in teachers pay to reward them sufficiently.

 

[Tamaradarann]

I view teacher salaries a bit differently. I look at it in terms of the (relative) importance of what they do, the training, the challenges of the job. These are important considerations in my view when setting pay scales. The problem I have perceived with respect to teacher salaries is that it failed to fairly compensate them, not by a standard of living scale, but by a relative scale of how important their job is. Whatever the minimum wage may be, the minimum wage should apply to entry level, relatively low skill, low importance jobs. Teachers are not that. They should be paid well because what they do is not easy, is not something anyone can do, and is very important.

I not only do agree with you I have said what you are saying in a different manner in this thread. My point with using the standard of living scale is to respond to Sponger76 and Lynne who seem to think that teachers pay is sufficient in Hawaii and that I shouldn't use Long Island where teachers are fairly compensated for their level of education and the importance of the work that they do in developing our children. They are our future.

 

[sponger76]

I not only do agree with you I have said what you are saying in a different manner in this thread. My point with using the standard of living scale is to respond to Sponger76 and Lynne who seem to think that teachers pay is sufficient in Hawaii and that I shouldn't use Long Island where teachers are fairly compensated for their level of education and the importance of the work that they do in developing our children. They are our future.

I never said anything about Long Island, and don't care what the teachers there are paid. I just don't like your grand idea of taking money from other Hawaii residents to put teachers up above them financially.

 

[geist1223]

Patti and I have discussed that as the minimum wage is raised to $15 per hour that $15 per hour will become the new proverty level. To fund this are you willing to pay $10 or more for a Big Mac?

 

[bnoble]

It doesn't matter, because you won't have to--at least, not because of the hourly wage. This study is several years old, but the point stands; wage costs are a small fraction of the price of that burger.

It probably doesn't account for other increases in the labor chain, so maybe it ends up being more, but some of those sources (farms) are not covered by hourly minimums, while others (processing) are.

Study: Raising wages to $15 an hour for limited-service restaurant employees would raise prices 4.3 percent - Purdue University

Raising wages to $15 an hour for limited-service restaurant employees would lead to an estimated 4.3 percent increase in prices at those restaurants, according to a recent study.

www.purdue.edu

 

[Henry M.]

I guess part of the question is whether jobs that pay minimum wage should be considered jobs from which to live from, or just entry level stepping stones to jobs that can actually sustain a person or a family? Should there be an incentive to try to move up because the lower rungs of the ladder are not comfortable places to be at, or should everybody make at least a "living wage", no matter what the job entails?

I agree with Scoop that palatial houses in gated communities won't become available for local housing, but most of the short term rentals I see are not in that category. There are lots of what would be considered middle income homes where I live that are in short term rental programs in Hawaii because they can bring in per week what the monthly rent would be if they were rented long term. STRs contribute significantly to the housing shortage in popular tourist destinations. Another issue in many places is gentrification, even if the homes are owner occupied. Wealthier people with the means move into desirable areas, driving up prices and making the area less affordable. It is a basic supply and demand situation, not exclusive to Hawaii. Even. people that outright own some modest homes can't afford to remain in them as property taxes and expected services rise along with property values. Affordable housing is a complex issue and not easily solved with just a couple of common-sense policies.

 

[csodjd]

I never said anything about Long Island, and don't care what the teachers there are paid. I just don't like your grand idea of taking money from other Hawaii residents to put teachers up above them financially.

Teachers are not paid by private employers that can charge customers for selling them things. They are paid out of tax dollars. Just like politicians and police officers and people that repair streets. I’m not sure where teachers lie in pay relative to police and fire, but I’d expect them to be at least on par with them.

 

[ScoopKona]

Patti and I have discussed that as the minimum wage is raised to $15 per hour that $15 per hour will become the new proverty level. To fund this are you willing to pay $10 or more for a Big Mac?

McDonald's in Denmark starts part-time workers off at $25/hr, with five weeks paid vacation, and since it's Denmark, full medical and tuition. A Big Mac costs $0.50 more there than here.

Companies CAN pay more. They just choose not to.

 

[csodjd]

McDonald's in Denmark starts part-time workers off at $25/hr, with five weeks paid vacation, and since it's Denmark, full medical and tuition. A Big Mac costs $0.50 more there than here.

Companies CAN pay more. They just choose not to.

To be fair, in the context of private businesses, they CAN pay more, but they MAKE less as a result. Isn’t the heart of free capitalism that you pay what you need to pay to get the workers/quality of workers you want? Does the owner of a private business owe a duty to ensure that those applying for a job earn enough to meet some standard of living?

Put another way, if two equal people apply for a job, is there something wrong with hiring the one willing to work for less money, even if the amount they are willing to work for isn’t enough for them to pay all their bills?

 

[ScoopKona]

but most of the short term rentals I see are not in that category.

Depends on where you are searching. The average house sale is a little less than $1 million on Maui. I've looked at the AirBnBs there, and most of them are clearly above-average houses. Even if the owners are forced to sell because of anti-AirBnB laws, they're not going to sell to locals who work in the tourism industry -- it isn't economically viable.

It's the same on Big Island -- most of the AirBnBs aren't in the heavy residential zones on the Kailua-Kona side of Hualalai. (Although there are some less expensive examples there. Most of them are on the Makai side of Kealakekua and Captain Cook, where real estate prices are an order of magnitude higher.