Fifty percent of Honolulu residents are renters, and if the non-homeowner property tax rate goes up, these costs will be passed along to many of these people — often the very ones least able to afford price increases. Mayor Mufi Hannemann‘s proposed budget calls for a hike to $3.72 per $1,000 of assessed value, which would generate $18 million to address the city’s budget shortfall. But City Council member Ikaika Anderson says that would unfairly tax local families who live on multihome properties. His wants to keep the rate under $3.50 — higher than the existing $3.42 rate for homeowners, but not much.

“A lot of our local people here do live in multigenerational households,” explained Anderson. Many own their homes along with a second house on the property for elderly parents, and this thrusts them into the non-homeowner category, which is primarily intended to target wealthier absentee owners with second or third homes.

But there’s logic to the mayor’s proposal, said city spokesman Bill Brennan. Local residents who have owned homes for decades have watched their property values soar as their retirement income remains steady, and they can’t afford to have homeowner rates continually rising. “This non-homeowner category allows the city to generate more revenue without touching the homeowner class. Those guys don’t want their property taxes touched.”

For more details on the city budget discussed Wednesday at the City Council meeting, read the bill.

To share your thoughts on property taxes and Honolulu’s high rents, join the money discussion.

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