HomeMy WebLinkAboutCOM 0883.011 2022-2024 P/5:Courl6I
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From: Debbie H
Sent: Sunday, May 26, 2024 1:23 PM
To:- Council Testimony; Kimball, Heather; Inaba, Holeka; Kierkiewicz, Ashley; Evans, Cynthia
F.W.; Kanealii-Kleinfelder, Matt; Michelle Galimba;Villegas, Rebecca; Lee Loy, Sue;
Baez, Wendy
Subject: Resolution 524-24- Property tax reduction for rental housing and homener D
classification- IN FAVOR
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Aloha Chair Kimball, Vice Chair Inaba and honorable council members-
Mahalo
for your service to our community!
RESOLUTION 524-24 DETERMINES THE REAL PROPERTY TAX RATES BY LOWERINg THE
RATE FOR AFFORDABLE RENTAL HOUSING AND THE HOMEOWNER CLASSIFICATION
I am in SUPPORT of RESOLUTION 524-24 to reduce property taxes for rental properties to help
make rentals more affordable for tenants. To make rentals affordable for tenants, you have to bring
the costs down for landlords. The costs of being a landlord have risen steeply in the last few years,
at first with the steep increase in property taxes and now with the insurance being cancelled and the
alternative is super expensive. This new problem is state-wide. See the City Beat article regarding
the problem. https://www.civilbeat.org/2024/05/condo-owners-are-starting-to-feel-the-pain-from-risinq-
insurance-costs/
There are 2 issues here:
1. How to create more affordable housing with long term rentals.
2. How to make being a landlord more affordable. Reducing the property taxes to help
landlords to afford a lower rental amount is a step in the right direction.
There is much more to do to increase affordable housing for local people:
Encourage owners by financial incentives to turn short term rentals into long-term rentals. Property
tax breaks is one way, but more is needed. A state-wide insurance fund would help. A win-win
situation needs to be provided for landlords to encourage lower interest rates.
I looked into the affordable rental program in the county, it is unclear what is the rental amount for a
2-bedroom, 2 bath apartment to qualify for the county's affordable housing status. I own several
apartments at Kona Coffee Villas (KCV) which is about 15 minutes south of Kona, The complex has
250 units. The apartments are 2 bedrooms with 2 baths.
The current property tax per year is $4,856.67 per year per condo unit. The reduction on this
property if a Bill results from Resolution 524-24, would be to approximately $3,075. That would be a
big help to keep the rents down. They are currently $200-$300 below market to enable people to stay
longer. I always rent on a one-year lease.
The important issue is to create a win-win situation to provide an affordable rent for long term renters
and allow an owner to make a profit. The most recent monkey wrench was the state-wide
cancellation of insurance policies for condo complexes. The state requires property-wide insurance
for all condo projects. At Kona Coffee Villas, the insurance policy for the 250 units cost policy cost
the AOAO about $72,000 last year; the quote for the coming year is for more than $616,000 !!! The
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increase is almost $550,000 over last year's amount! The State of Hawaii is going to have to form an
insurance pool, like California and other states.
I sold apartment buildings to investors for 30 years in Tucson, AZ and would be happy to explain how
an investor analyzes an investment. This would provide you with the nuts and bolts of what is
needed to increase long term rentals. There has to be a reasonable rate of return for an investor to
take on the headaches of condo or apartment rental ownership. I would be happy to sit down with
anyone who might be interested in the calculations to explain this.
Mahalo-
Debbie Hecht
808-989-3222
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