The Case for an Empty Homes Tax in Maui County
Maui County is in the throes of a housing crisis, a situation exacerbated by a growing disparity between the ultra-wealthy who own second or vacation homes that often sit empty and residents who are struggling to afford basic housing. This crisis isn't unique to Maui; cities worldwide have faced similar challenges, and some have turned to innovative solutions like an Empty Homes Tax to address the problem. Vancouver, British Columbia, is one such city that has implemented an Empty Homes Tax with notable success, serving as a potential model for Maui County.
Understanding the Empty Homes Tax
An Empty Homes Tax, also known as a vacant home tax, is a additional property tax placed on properties that are left unoccupied for a significant portion of the year. The primary goal of this tax is to incentivize property owners to rent out their vacant homes or sell them, thereby increasing the availability of housing in the market. This tax is not designed to penalize property ownership but to encourage the more efficient use of residential properties, especially in areas experiencing housing shortages.
In Vancouver, the Empty Homes Tax was introduced in 2017 as a response to the city's housing crisis. The tax is applied to properties that are not the principal residence of the owner or are not rented out for at least six months of the year. The tax rate started at 1% of the property's assessed value but was later increased to 3% due to its success in bringing vacant homes back into the rental market. The revenue generated from this tax is reinvested into affordable housing initiatives, creating a direct link between the tax and efforts to alleviate housing shortages.
The Success of Vacant Property Taxes in Other Cities
Vancouver's experience with the Empty Homes Tax is one of several success stories from cities that have adopted similar measures. In Melbourne, Australia, a Vacant Residential Land Tax was introduced, and in Paris, France, the city has implemented an annual tax on vacant residential properties since 2017. These taxes have successfully pushed many property owners to rent out or sell their vacant homes, increasing the supply of available housing and helping to stabilize or reduce housing prices.
In each of these cases, the implementation of an empty homes tax has led to a notable reduction in vacancy rates. For example, Vancouver saw its vacancy rate drop from 4.3% in 2017 to 2.2% in 2019, a significant improvement that has made more homes available to residents. The revenue generated from these taxes has also been substantial, allowing cities to reinvest in housing affordability programs, further addressing the root causes of their housing crises.
The Housing Crisis in Maui County
Maui County faces a unique and pressing housing crisis. The island's limited land availability, combined with its desirability as a vacation destination, has driven up property values and created a market where luxury homes sit empty for much of the year, owned by non-residents who visit only occasionally. Meanwhile, the local population is struggling with skyrocketing housing costs, leading to increasing rates of homelessness and housing insecurity.
The disparity between the wealthy owners of second homes and local residents has created a situation where many working families cannot afford to live in the communities where they work. Essential workers, such as teachers, healthcare professionals, and service industry employees, are being priced out of the housing market, leading to a labor shortage that further exacerbates the economic challenges facing the county.
The presence of vacant luxury homes also contributes to the strain on Maui's resources, particularly water. Empty properties still require maintenance and consume resources, yet they do not contribute to the local economy or community in the same way that occupied homes do. This imbalance highlights the need for policies that encourage the more efficient use of housing and ensure that properties are contributing to the community.
Why Maui County Should Implement an Empty Homes Tax
Given the success of similar taxes in other cities and the severe housing challenges facing Maui, it is time for the county to consider implementing its own Empty Homes Tax. Such a tax would serve multiple purposes:

1. Increase Housing Availability: By taxing vacant homes, property owners would be incentivized to either rent out or sell their properties. This would increase the supply of available housing, helping to stabilize or even reduce housing prices, making it easier for residents to find affordable homes.

2. Generate Revenue for Affordable Housing Initiatives: The revenue generated from an Empty Homes Tax could be used to fund affordable housing projects, providing a direct benefit to those most affected by the housing crisis. This could include the construction of new affordable units, subsidies for low-income renters, or support for first-time homebuyers.

3. Encourage Responsible Resource Use: By discouraging the practice of leaving homes vacant, an Empty Homes Tax would help ensure that Maui's limited resources, such as water, are used more efficiently. Occupied homes contribute to the local economy and community, while vacant homes do not.

4. Promote Community Stability: Reducing the number of vacant homes can help foster a greater sense of community. Occupied homes are more likely to be maintained and cared for, contributing to the overall well-being of neighborhoods. Additionally, having more residents living in these homes would mean more people participating in local schools, businesses, and civic life, strengthening the social fabric of Maui.

5. Address Income Inequality: An Empty Homes Tax would also help address the growing income inequality in Maui. By targeting luxury properties that are left vacant, the tax would place the burden on those who can afford it, rather than on working families who are already struggling to make ends meet.

Implementing the Tax in Maui County
To implement an Empty Homes Tax in Maui County, several steps would need to be taken. First, the county would need to define what constitutes an "empty" or "vacant" home. This could be based on the number of days per year the property is occupied, as is done in Vancouver. The county would also need to establish a tax rate that is high enough to incentivize property owners to rent out or sell their homes but not so high as to be seen as punitive.
The tax could be structured with exemptions for certain property owners, such as those who are temporarily away for work, in long-term care, or dealing with significant renovations. Additionally, the county would need to set up a system for monitoring and enforcing the tax, ensuring that owners accurately report their property's occupancy status.
Finally, Maui County would need to communicate the purpose and benefits of the tax to the public, making it clear that the goal is to address the housing crisis and improve the quality of life for all residents. By emphasizing the positive outcomes seen in other cities, the county can build support for the tax and its potential to create a more equitable and sustainable community.
Conclusion
Maui County is at a crossroads, facing a housing crisis that threatens the well-being of its residents and the sustainability of its communities. An Empty Homes Tax, modeled after the successful examples seen in cities like Vancouver, could be a powerful tool in addressing this crisis. By incentivizing the use of vacant properties, generating revenue for affordable housing, and promoting responsible resource use, such a tax would help ensure that Maui remains a place where all residents, not just the wealthy, can afford to live and thrive.

​

​