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Rezoning has owners feeling pinch of taxes

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City rezoning along a mile-long stretch of Young Street last year has unexpectedly inflated property taxes in Makiki at a time when landlords and residents say they are already struggling to make ends meet.

"It’s never been and we’re not ever going to plan to use it for commercial use," Makiki resident Carrie Cheung said of the Young Street home she has shared with her brother and mother for 20 years. "I feel it’s unfair and unjust for us."

Makiki property owners were slapped with the tax jump after the city decided in December to reclassify 250 parcels — including properties in Kalihi, Waipahu, Moiliili, Makiki and Kapahulu — from residential to commercial and industrial. After decades of paying residential tax rates under the old mixed-use classification, property owners from Makiki to Kapahulu said the tax hike puts them in a severe financial pinch and could mean higher rent for hundreds of tenants living in cottages and walk-ups in the area.

Speaking yesterday at a news conference held by City Councilwoman Ann Kobayashi, landlord Francis Liu said his tax bill — which rose last year to $13,000 from about $6,000 — might force him to raise rents on tenants who have lived in his nine-unit Kapahulu apartment complex for decades. Although Liu did not pass this year’s tax hike on to his tenants, he said a sustained increase would force him to charge tenants an additional $90 per month.

"There have been people who grew up in the units," he said. "To have your taxes just doubled when nothing really changed — that makes it tough."

Landowners said they received a letter from the city in December notifying them that their properties had been administratively reclassified, but were not told it would affect their taxes. Landowners said they were surprised when they received their tax bills in July as tax rates increased to $12.40 for commercial and industrial property from $3.42 for residential property per $1,000 of assessed value.

"I was in shock," said Makiki resident Donna Reed, who owns a two-bedroom home on Young Street. "I can just barely make it right now."

Reed said her taxes rose to $7,000 from $2,500 last year.

The City Council passed legislation that allows property owners in commercial- or industrial-zoned areas to apply for special dedications, renewable every five years, that allow them to pay the residential rate, but many did not get a chance to apply for the exemptions.

Following complaints from constituents, the City Council and acting Mayor Kirk Caldwell introduced bills last week to try to remedy the problem.

The City Council has planned hearings on the issue for next month.

A city spokesman did not return a call from the Star- Advertiser.

 

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