The U.S. Census Bureau (2020) reports that Oahu has 34,253 empty homes. That’s more than the total new homes needed on Oahu to end our housing shortage. Many local residents can’t afford a home and are leaving our island or living on the streets, while nearly 1 in 10 housing units are empty.

Many of our empty homes could be converted into homes for our local residents. Now. With no public subsidies, no new construction, no taking of new lands, and no delays in permit and planning.

How? With an “empty homes tax,” such as Bill 9 in the Honolulu City Council.

Bill 9 is the outgrowth of a unanimous report and recommendation by the Oahu Real Property Tax Advisory Commission, made up of volunteer commissioners from around Oahu. Faith Action for Community Equity also supports Bill 9, to help address root causes of inequities in our community.

Our current housing tax policy is broken. Hawaii has the lowest effective property tax rate in the nation, but it fails to distinguish between homes for long-term residents versus investment properties never used as homes. Our low property taxes incentivize international investors to buy our properties for their profit and enjoyment, while local residents are priced out of affordable housing. Median housing prices are over $1 million, while median income is under $90,000. Our tax structure is incentivizing high-end investment, instead of homes for island residents.

An empty homes tax can help rectify a root cause of this inequity. This tax won’t be paid by anyone who uses their property as a home for a Hawaii resident (an owner, renter or permitted occupant) for at least six months a year (or two three-month periods). Numerous equity exemptions exist to avoid unintended consequences.

All revenues from Bill 9 are earmarked to fund solutions for affordable housing and homelessness, with up to 5% to assure adequate implementation and enforcement.

Those who own empty homes could choose to either keep an “empty home” and pay an empty homes tax (proposed at 3% assessed value), or use the property as a home for a local resident. Either way, our community wins. We get more homes for local residents, or more tax revenues to address affordable homes and homelessness — or both.

While many empty homes are higher-end properties, the new influx of housing supply would put downward pressure on rental prices all over the island. Landlords would need to offer reasonable rental rates to attract local long-term local renters. Property owners and developers would finally be incentivized to create long-term homes for our residents, instead of short-term rentals for our visitors. Isn’t that what we should be doing?

Experiences by other jurisdictions with similar empty homes are encouraging. Bill 9 is most similar to Vancouver’s empty homes tax, which since 2018 has resulted in a 26% reduction of vacant homes and $106 million in new tax revenues for affordable housing. This, despite having only 2,193 empty homes initially — less than 10% the number of Honolulu’s empty homes.

About 99% of Vancouver residents do not pay the tax because, like Bill 9, the tax is not imposed on properties used as a home for local residents. A related vacancy/speculation tax in British Columbia province has generated $231 million in revenues for affordable housing since 2018, and helped create more housing for local residents.

Let’s work to create a tax policy that better reflects our community’s values and needs. Bill 9 deserves our strong support. Let’s give it a chance to work!

Evelyn Aczon Hao is immediate past president of Faith Action for Community Equity and a retired school principal; Ellen Godbey Carson is a community advocate and former president of Institute for Human Services (IHS).