Tag Archives: Property Taxes

#CON AM: Not all ‘investment real property’ owners are wealthy

EDITORIALISLAND VOICES

Column: Not all ‘investment real property’ owners are wealthy

  • An investor landlord incurs many expenses, including monthly mortgage payments, flood, hurricane, fire and liability insurances, maintenance/repair costs, appliance replacements, and utilities.

“Shall the legislature be authorized to establish, as provided by law, a surcharge on investment real property to be used to support public education?”

Voters will have the opportunity to vote on that proposed constitutional amendment this November. Unfortunately, this open-ended language provides unfettered taxing powers to the state on ambiguous “investment” real property.

Up to now, only counties are authorized powers to collect real property taxes.

Even then, it’s a fallacy that every investment property owner is wealthy and thus, low-hanging fruit for taxation.

Many “investors” are self-employed residents. They lead frugal lives and sacrifice in order to purchase an investment property. They have mortgages with monthly payments. They doggedly work on their fixer-uppers. While others take vacations to Las Vegas, they are home fixing or improving.

Their investment property is their retirement benefit. And let’s not forget, the benchmark used by Honolulu County for double tax on investment or Residential “A” is $1 million (an amount easily reached).

Since this constitutional amendment is a Hawaii State Teachers Association initiative, let’s use a public school teacher as example: Teachers have a guaranteed monthly salary, including a long summer, spring, Christmas and holiday breaks. Teachers generally get annually 18 days of paid sick leave that can be accumulated throughout their tenure. Each school year has 189 curriculum days. Teachers generally receive 80/20 EUTF medical benefits. At retirement, teachers could receive a $1,000 monthly pension, more or less, depending on the rate of pay and length of service.

On the other hand, an independent or retired property “investor” has no guaranteed fixed income, and no benefits like medical, pension or holidays.

In fact, the demands on an investor landlord are 24/7/365. The alternative is to hire a property manager who charges 12 percent of gross rental income.

An investor landlord incurs many expenses, including monthly mortgage payments, flood, hurricane, fire and liability insurances, maintenance/repair costs, appliance replacements, and utilities. Expenses can often include absorbing unpaid rents, legal fees to evict delinquent tenants, or costs for property damages.

Allow me to highlight just three categories of “investors” to present another perspective to this taxation issue. Not every investor is wealthy; many are trying to survive, just like our teachers:

>> Investor A is retired and depends on his second home income to help him and his wife in their retirement years. Both their million-dollar homes (on paper) need repairs and maintenance that they cannot afford right now. If they had to be in a care home, they’re hoping that the rental income could help. Currently, they’re barely making ends meet and worry about being priced out of house and home with increasing fees and taxes.

>> Investor B is now working on the mainland. He cannot find a comparable job in his field here. They want to come home eventually but they can’t afford to, yet. They’re renting their mortgaged home to a local family long-term. Their shack is now over the $1 million valuation, triggering increased “Residential A” taxes. They reluctantly will have to raise rents soon.

>> Investor C is a self-employed young man with construction skills. He maintains a million-dollar (on paper) second home that he fixes up through sweat equity. He depends on this rental income to pay his two mortgages, support himself and his growing family. They have no other income or benefits like medical or pensions for themselves and their children.

Most Hawaii’s residents, including such investors, are trying to make ends meet. Can we see strict fiscal discipline and tightening of waste and spending in our government before more taxes are imposed? Otherwise, more locals will be priced out of Hawaii.

Column: Not all ‘investment real property’ owners are wealthy

 

 


Choon James has been a real estate broker for 30 years and is a long-time community advocate.

Choon James For Honolulu City Council District 2

Name on ballot: JAMES, Choon
Running for: Honolulu City Council
District (if applicable):District 2
Political party: Nonpartisan
Campaign website: www.VoteChoon.com
Current occupation: Real Estate Broker
Age: 61
Previous job history: College Instructor
Previous elected office, if any: Community Associations

Community organizations/prior offices held

Chair, Defend Oahu Coalition – Keep The Country Country; president, BYU-Hawaii Alumni Association; president, Laie Point Community Association; board member, Laie Community Association; founding member, Kahuku Hospital Board, Save Oahu Farmlands Alliance; member, Honolulu Board of Realtors; producer, Olelo Community Media; member, Hawaii Thousand Friends; member, Sierra Club; member, Ko’olauloa Sustainable Communities Advisory Planning Committee; member, Amnesty International; member, Friends of South Pass City; member, Relief Society Women’s Organization; merit badge counselor, Aloha Council BSA.
What qualifies you to represent the people of Hawaii?

I’m a CITIZEN CANDIDATE, not a career politician or a career bureaucrat, like some candidates. I’ve been a successful small businesswoman for 30 years.

Status Quo has not served us well. I want to positively improve Oahu for my children and your children. I

do not accept donations from special interests so I’m not beholden to do their bidding or owe any favors. I’ve mostly paid for this campaign on my own. I’ve been happily involved in civic and public affairs for decades with no compensation expected.

I have been an environmental, social and economic justice advocate and activist at City Hall with land use issues such as “Keep The Country Country”, preserving farmlands, food sustainability, open space, preserving parks, capital spending issues and others.

For the past 10 years, I’ve personally been involved in budgeting process and workings of Honolulu Hale. I’ve grown older and impatient and wish to make a difference INSIDE City Hall. I don’t have an ego nor am I looking to save my job. I truly believe that a public office is to serve the public good; it’s not a profiteering office.

If elected, what will be your highest legislative priority?
Many residents have several jobs to keep themselves afloat. Our seniors have to postpone retirement. Kupuna are worried about being priced out of house and home and not being able to pass the family inheritance on to the next generation. Our residents worry when the government is going to slam them with more taxes and fees!

We must protect our home front first! I want to champion and work with the other 8 council members to

~ ~ provide a property tax cap for local homeowners who have lived in their homes for 15 years or more. ( California did Prop 13 in 1978!)

~~ provide incentives to property owners who rent long-term to long term residents.

~~ Focus on increasing truly affordable rentals/homes inventory These foundation improvements will help mitigate some of the challenges we face in Oahu today. It will also protect our residents’ ability to remain in our island home and not be priced out.

What are the top three challenges facing the voters you seek to represent?

District 2 is the most diversified and largest land area in the City Council. We span rural communities from Kahalu’u to Wahiawa to an award-winning planned community in Mililani Mauka. We have wonderful residents!

1. Costs of Living & Housing – Hawaii is such a beautiful place with a stable political environment that does not discriminate real estate ownership; our local residents have to compete with international investors for real estate holdings. Increased property values and property taxes outpace many residents’ fixed social security and income. Our residents are feeling priced out on so many different levels.

Many work 2-3 jobs to make ends meet and sustain themselves. Our young people have to resort to exchange babysitting in parking lots on the way to work! Kupuna are worried about sustaining themselves in their golden years and passing on the family home to their children.

Most of us work very hard to make a living.

The government must deliberate carefully before imposing escalating fees and taxes on our people. Residents are not eternal money trees.

2. Quality of Life Ko’olauloa and North Shore is the Oahu’s golden goose for tourism. While residents are welcoming, the quality of life must be considered. Residents are overwhelmed by the increased amount of tourists. Tourism’ multiplier impacts on our infrastructure and public space are real. Traffic is a constant aggravation. The one hundred- year-old Kamehameha Highway, parks, other finite natural resources and other municipal services have to be considered into policy-making and deliberations .

3. Economic Opportunities This cash economy is leaving many of our residents behind. Homelessness is on the rise in our District. We have homeless camping in the streets, mountains, and other public places. This is not good for them and not good for the public. The world is changing. Jobs that are here today will not be here tomorrow.

Fortunately, we have very successful residents who are willing to help and share. As a city councilwoman for my District, I will also focus on this area – to help our residents explore start-ups, resources, education and options to lift ourselves and our families to the countless opportunities out there for economic gain.

If elected, what can you do to improve the lives of your constituents?

Our residents are working very hard to make a living and sustaining themselves. I truly believe government is for betterment of the happiness, welfare and prosperity of our people.

1. Thus, I will be very firm and cognizant in fiscal decision-making. Is the spending good for the residents? Are local residents the primary beneficiaries? Is it absolutely necessary?

2. We also need to maintain clean, safe, and efficient core municipal services for our communities.

3. I will become your good friend. I will visit you in YOUR neighborhood and work with you.

4. We MUST protect our residents FIRST. They are the major stakeholders in Oahu. The Honolulu City Council has tremendous leverage and oversight to mitigate development agendas for Oahu.

5. We must have an over-arching understanding of what we wish Oahu to become. We must base our decision-making consistent with the Oahu General Plan (and Hawaii 2050), which offers objectives and policy guidelines for Population, Economic, Social, Cultural and Recreation, Tourism, Natural Environment, Transportation, Energy, Public Safety, Health & Education, Government Operations and Fiscal management to sustain and maintain our island home.

Is there anything else you would like voters to know about you?

I’m a citizen candidate. I do not accept donations from lobbyists or corporations. I owe nobody favors or fear except to work with you residents to improve some basic challenges facing us.

I have severe concerns about the direction that Honolulu is heading. We cannot continue to fund the runaway Honolulu Rail without firm fiscal scrutiny and accountability. I’m volunteering myself as an able and trained alternative to “business as usual” politics.

You can rely on my decades-old record of activism and advocacy. I have been consistent. I maintain a world-view outlook. But I also recognize that we live on a small island.

Additionally, my profession as a real estate broker allows me to work with people from all walks of life and status. We treat every client with care and respect. Should there be a challenge, we quickly and methodically address them with all parties and professionals concerned and find solutions to the benefit of all.

I have great confidence we can tackle Oahu’s challenges together! It doesn’t matter if we’re young or old, rich or poor, Democrat or Republican, military or civilian, unionized or not – – we all have the same dreams for ourselves and our children. We can be fair and reasonable in decision-making; we can all win! There are solutions to the challenges on our island home.

You the residents have valuable local knowledge and wisdom to share. Many of us also have international experience, professionally combed the world, and gained insights and expertise. Collectively, we can improve our island home! Let’s put YOUR smarts, imagination, expertise, common sense, and aloha together to improve our lives and communities.

Let’s gang up for the public good! I humbly ask for YOUR vote.

Choon James

808 293 8888 text

ChoonJamesHawaii@gmail.com

www.VoteChoon.com

www.CountryTalkStory.com