Public opinion on the topic of an “empty homes tax” in Honolulu has shifted in recent years, as the cost of housing has skyrocketed nationwide — particularly in cities like Honolulu, which are attractive to investors who can move their money globally, and see the relative stability of the U.S. economy and Honolulu’s comparably low property tax rate as incentives.

Observers have seen that certain units in new Kakaako condos selling for elevated prices are purchased quickly, but many owners never seem to move in. As for affordable housing, the explosion of short-term rental conversions a la Airbnb has taken many rental-ready units out of circulation.

Finally, in some older, once-affordable neighborhoods, dozens of homes sit empty because the owner has passed or moved away, leaving properties to deteriorate. The proposed empty homes tax now before the City Council would not apply to a home until five years after an owner has died, but the higher tax rate and penalties would provide welcome tools to apply to semi-abandoned homes.

A widespread assessment of Honolulu’s housing situation as a “crisis” for both low- and middle-income residents has led to a growing call for public measures to counteract these trends. And the City Council has responded, to its credit.

Bill 46, Oahu’s empty homes tax proposal, would establish a framework for assessing and enforcing a higher tax rate on homes that sit empty for at least half of each year. It has passed several hurdles in committee to reach a public hearing stage, and has been amended to account for many of the serious objections raised during consideration.

This is a tax whose time has come.

The bill, currently drafted to take effect on July 1, 2026, proposes that an “empty home” be defined as a property that is unoccupied for more than six months a year. “Occupied” means either lived in permanently or rented, and includes legal short-term rentals, including 30-day rentals.

Following an education period before the law takes effect, owners will be required to declare the status of their residential properties each year.

The tax rate for an empty home would rise from 1% of the property’s tax-assessed value in the first year to 2%, then 3% in the third and subsequent years.

At least 20% of the tax collected would be required to go to Honolulu’s affordable housing fund. Up to 5% could be used for administration. The rest would go into the general fund — and, of this money, at least 20% is directed to increase affordable housing for people earning 140% or less of area median income, and at least 10% to address homelessness.

The city could use audits, inspections and other enforcement mechanisms to check on compliance, with penalties including foreclosure on the property for continued violation of the law.

The arguments for an empty homes tax are expressed in the bill. Honolulu has the third-worst “impossibly unaffordable” housing in the United States, it declares. Meanwhile, the 2020 U.S. Census reported that Honolulu had a housing vacancy rate of 9.2%, with 34,253 unoccupied units.

An empty homes tax could encourage owners to rent or sell vacant housing stock, increasing supply. Owners who choose to pay additional tax to hold homes empty would add to funds available to address affordable housing and homelessness.

As always, there is possibility of a legal challenge. One argument revolves around whether Bill 46’s “empty homes tax” is actually a “penalty” for not occupying a property. However, as with short-term rentals, governments are increasingly sure that this tax, designed to benefit residents, can stand.

The next step for Bill 46 is a public hearing, 10 a.m. Wednesday at Kapolei Hale. See the notice and instructions for offering testimony at 808ne.ws/Oct9notice.