HILO — Hundreds of Big Island property owners are on the verge of losing their land this week, most of them in two communities — Nanawale in Puna and Ocean View in Kau.
“This will be a very unusually large tax sale, and we’re surprised that a lot of people haven’t come in to pay yet,” said Lisa Miura, Hawaii County’s acting real property tax administrator.
An April 4 legal notice printed in the Hawaii Tribune-Herald listed 372 properties that the county will auction off for delinquent property taxes. As of that notice, those parcels include 224 in Ocean View and 94 in Nanawale. Most of the remaining lots and homes up for sale are in other Puna and Kau subdivisions, including Hawaiian Shores, Hawaiian Paradise Park, Kapoho Vacationland, Milolii Beach Lots and Hawaiian Beaches.
Monday is the last day that delinquent owners can file an online appeal that might forestall their property’s auction.
After that, according to the county sale notice, the original owners do have one option to get their property back: Within the first year after the sale, they can reclaim the title by paying whoever bought the property whatever they paid for it, plus fees and interest.
The actual auction will take place at Aunty Sally’s Luau Hale, 799 Piilani St., Hilo, starting at 9 a.m. on April 18 and 19. Minimum accepted bids on most of the lots are only $2,000 to $4,000.
The county has settled with a few more landowners since the notice was published, bringing the properties scheduled for auction down to 364, Miura said.
The list could have been much longer. Miura said more than 13,000 Big Island property owners were two years or more delinquent on their taxes, which would give the county the statutory right to sell their property. All told, the county is owed about $6.6 million in delinquent property taxes.
More lots, Miura said, “go to tax sale here than on any other island” — partly because the Big Island has so much land, and partly because lots in some substandard subdivisions are so relatively cheap.
“Especially if it’s a mainland buyer, it’s easier to walk away from if it’s only five or ten thousand (dollars) per lot,” Miura said.
There are several possible reasons for the lopsided delinquencies in Ocean View and Nanawale. The county’s Real Property Tax Office has only three collectors, and the sale postings alternate between their territories. This particular sale covers properties in Puna and Kau — which also contain most of the county’s “affordable” house lots.
In the 1950s and ’60s, real estate developers marketed a series of subdivisions on the island — mostly in high lava-risk zones, without standard infrastructure such as water or sewer lines and with private roads that didn’t meet county codes — sometimes amounting only to unpaved trails.
Pam Frierson wrote in her history, “The Burning Island,” that “the real estate boom here seems to have been part of a nationwide phenomenon … Large-scale speculative subdivisions were being carved out of marginal lands — desert, tidal flats, lava lands — and sold as cheap ‘retirement’ or ‘investment’ parcels.”
Often, those lots were marketed to mainland or foreign buyers who’d never seen the land they were buying.
The substandard subdivisions attracted thousands of buyers, partly because high real estate prices elsewhere in Hawaii make them the only option for working-class families. And the sales pitches — some less than truthful — to off-island buyers still go on. Miura said 602 of the delinquent property owners lived in other countries.
One real estate website describes Ocean View as “nearly midway between Hilo and Kona.” Ocean View is actually over an hour from Kailua-Kona and two hours from Hilo, mostly over narrow, often winding mountain roads.
It’s the most remote community on the island, and it’s vast: over 10,000 lots served by more than 150 miles of private roads. Almost all of those lots are on raw lava, or in kipuka — isolated patches of trees on older lava flows.
Yes, there’s an ocean view — but the actual ocean is miles away; only visible because the lots are perched on the steep southern slope of Mauna Loa, ranging in altitude up to about 5,000 feet. The only water is from rainwater catchment tanks — and since the community sits in Mauna Loa’s rain shadow, it only averages about 23 inches of rainfall per year.
“I believe a lot of people buy out here and they find that it’s not a place where they want to live,” said Miura. “I do think people realize it’s very far to get to work, and there are few services.”
Nanawale has many of the same problems as Ocean View — many of its roads still aren’t even paved — but it also had two acute problems that may have boosted the number of tax delinquencies this year: Tropical Storm Iselle and the Kilauea volcano.
Iselle roared through Lower Puna in 2014, doing major damage, especially in Nanawale, which was so hard hit that then-Gov. Neil Abercrombie toured the storm-ravaged subdivision to see the devastation for himself. Videos of that tour and others of the storm damage are still circulating on the Internet, which may not help if someone’s trying to sell a home or lot there.
At about the same time Iselle happened, a lava flow threatened to sever State Highway 130, cutting the only connection to the outside world for Nanawale, Kapoho and other coastal communities in Lower Puna. Because of those twin disasters, said Miura, then-Mayor Billy Kenoi decided to leave those subdivisions off the previous tax delinquency auction for the Puna area.
Miura said the county used “every means possible to try and locate owners,” sending out at least four delinquent notices to the owners’ addresses of record before putting the parcels up for auction. Her office particularly tried to avoid selling off lots where people were actually living.
“We don’t like actually like to sell the properties,” she commented. “We’d rather have them get paid off.”
Still, she hoped that bidders would turn out for the upcoming sale.
“When people bid on the properties, usually they keep current on their payments going forward,” she said.
Thoughts on this or any other story? Write a Letter to the Editor. Send to firstname.lastname@example.org and put Letter in the subject line. 200 words max. You need to use your name and city and include a contact phone for verification purposes. And you can still comment on stories on our Facebook page.