Eleven homeowners currently exempted from paying regular property taxes on their historic residences will no longer get the major tax breaks starting next year because they have opted out of the program.
The historic-home exemptions came under fire last year after the Star-Advertiser reported that some owners saving thousands of dollars annually through the program did not appear to be complying with its requirements. Some owners failed to post “historic home” signs on their property while others did not provide the public reasonable visual access to their residences — both required when the owners applied for the exemptions.
The Star-Advertiser found that views of some dwellings, including $1 million-plus properties, were largely obstructed by vegetation, high perimeter walls or other things, undermining one of the main benefits of the program: allowing the public to see and appreciate Hawaii’s historically significant residences. The city acknowledged that it had been lax in enforcing the requirements.
In the wake of the controversy, the city revised the law this year, tightening or clarifying requirements while providing homeowners an option to opt out. Those who no longer get the exemption will no longer pay as little as $300 in annual property taxes, regardless of the value of their homes. The city also is hiring more enforcement officers to monitor all property tax exemptions.
In addition to the 11 homeowners who opted out of the program, four have filed documents with the city indicating that they intend to allow the public onto their property 12 days a year as an alternative to complying with the visual access requirement. The city is setting up that system and eventually will post on its website the addresses and dates the properties will be accessible.
The Star-Advertiser was unable to reach any of the 15 homeowners.
Roughly 250 homeowners currently get the historichome exemptions, costing the city nearly $1 million in lost revenue. The idea behind the program is to encourage owners to preserve Oahu’s historically significant residences and to use the tax savings to help cover the higher costs generally associated with maintaining such old buildings.
Among those who have opted out of the exemption program is attorney Sherry Broder, according to city records. Broder and University of Hawaii law professor Jon Van Dyke own a Round Top Drive home built in about 1920 and currently assessed at roughly $1.2 million, the records show. The dwelling is at the end of a private roadway, hidden by lush vegetation and the contour of the neighborhood’s mountainous terrain.
The couple’s new tax tab next year will top $3,700, up from the $300 minimum, according to city records.
Although the newspaper was unable to reach the couple, Van Dyke previously told the Star-Advertiser that he thought his home met the spirit of the law, noting that it was visible from parts of Kahala, Waikiki and Diamond Head, all miles away. He also said he and his wife frequently hosted functions at the home, giving those in attendance an opportunity to see it.
In response to the newspaper’s coverage, the city did drive-by checks of all 250 residences getting the tax breaks and found roughly half appeared not to be in compliance. Nearly 120 homes did not have visible signs and about 28 appeared not to meet the visual requirements.
Gary Kurokawa, the city Real Property Assessment Division administrator, said new rules expected to be in place by the end of the month will clear up ambiguities in the old regulations and enable his staff to better enforce the program.
The new rules, for instance, clarify that homes visible only from a beachfront will meet the visual access requirements, according to Kurokawa. Homes on private streets also would be in compliance if the homes can be seen from the street and the road is open to the public.
Holly Huber, a community activist who has called for tougher enforcement, questioned whether the new rules ultimately will ensure visual access to hidden homes getting the exemptions.
“I’ve very concerned that they have made all these rule changes yet they’re still not serving the public purpose for these very generous tax breaks,” she said.
Once the rules are in place, Kurokawa’s staff will do another check of the exempted homes, advise those not in compliance to take corrective action and yank the exemptions if such corrections are not made, he said.
“This needs to be done,” Kurokawa said.