There is probably no truer symbol of the state of Honolulu’s housing market than the vast darkness of unoccupied condos in the new high rises of Kakaako.

Many of them belonging, no doubt, to out-of-state investors who collect residences in exotic places for occasional visits. People who not only can pay the units’ towering purchase prices, but can afford to let them sit empty most of the time instead of renting them out.

These are Oahu’s sky-high accommodations, from which no one looks out the windows to admire the view of an island below where full-time residents struggle to shelter themselves amid a severe and persistent housing shortage.

Honolulu Mayor Kirk Caldwell has proposed a 1% increase in the property taxes of owners of unoccupied residences to prod them into living there or to find tenants.

The idea is sound, the amount woefully inadequate. A 5% or 10% vacancy tax would be more appropriate. That still might not be enough to change the behavior of many absentee landowners, but at least it would generate a sizable sum of revenue that could be dedicated to building affordable housing elsewhere.

Condominium towers like these are the face of new residential construction in Honolulu. But after the units are sold, they’re not necessarily occupied.

Anthony Quintano/Civil Beat

Yes, this amounts to penalizing people through taxation for exercising their right to do what they damn well please with their property.

But that’s what it’s come to here in paradise, where politicians and the building industry have long done what comes natural to them: follow the money.

If Hawaii were less desirable, we wouldn’t have this problem.

Most places, the market demand for housing equates to what local residents want and can afford. Developers and construction companies respond accordingly, and the result is a mix of modest-to-fancy apartment complexes, single-family homes, duplexes and, yes, condos.

Very few builders are erecting modest new accommodations on Oahu, not because they wouldn’t be snapped up by eager buyers, but because there’s more money to be made 20 or 30 stories high in Kakaako or Ala Moana.

The American building industry has struggled with an inadequate supply of qualified workers for years, and the problem is exacerbated in these remote islands. On the mainland, it’s much easier to shift the labor to meet the fluctuating demand.

Throw in a multibillion-dollar rail project and a seemingly unquenchable demand for luxury accommodations, and it’s easy to see why Hawaii’s construction resources are stretched thin.

When free markets fail to solve our problems, government intervention is necessary. Caldwell’s vacancy tax proposal is a small example. A bigger one is the City Council’s decision this week to finally crack down on illegal short-term vacation rentals that need to instead become long-term rentals for local residents.

But this is hardly a matter of politicians and bureaucrats riding over the hill cavalry-style to rescue us imperiled islanders from capitalist bandits. Our local and state governments have been complicit in creating this warped state of affairs, and they still are.

The Kakaako condo conundrum, for example, is the product of the Hawaii Community Development Authority. The agency created by the Legislature in 1976 “as a way to plan for the future development of underutilized urban areas” adopted the area west of downtown as its first “Community Development District.”

The gleaming condo towers that resulted have included a lot less affordable housing than had been envisioned.

More special districts have been designated by the city along the future Honolulu rail line. But the “transit-oriented development” that has occurred so far leans heavily toward fancy high rises in Ala Moana, projects that are taking advantage of exemptions in regulations to build higher and denser than would normally be allowed.

If Hawaii were less desirable, we wouldn’t have this problem.

Some people question whether the over-budget rail project will actually make it to Ala Moana, but either way the towers are rising there.

Projects that are beholden to special government programs designate a portion of their units as affordable housing. But they all have expiration dates after which they can be sold at market rate.

And frankly, all the talk about designating certain proportions of the units in condo towers for affordable housing has been something of a smokescreen. The implication is that the city and state are really focusing on the problem when they’re actually still playing into the hands of developers looking to serve those lucrative upscale buyers who don’t even live here.

This has allowed the problem to fester. Young people are moving off the islands in search of rosier financial futures someplace where they can find truly affordable housing. Residents who remain often cram homes with too many roommates. Some end up living in tents.

Government leaders must now respond to monster problems that are partially the result of their own negligence and greed. And they’re going to have to do more than just flex their muscles at Airbnb and absentee landowners.

For-profit developers and construction companies are not going to stop building luxury condo towers and start building affordable housing unless they are forced to. 

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