Could raising property taxes could help affordable housing in Maui?
In the news article, Here’s An Affordable Housing Plan That’s Already Working, written by Kenna StormoGipson from September 3, 2021 it discusses how raising property taxes could help affordable housing in Maui.
Here is an excerpt from the article:
In Hawaii the reality is that owners, whether local residents or out-of-state buyers, are willing to pay a premium price for a home they will not live in. The purchase is a type of luxury good, in the sense that it is not essential for a person to own a second home.
In economics, a luxury good is defined as “not essential, but makes life more enjoyable” and “often more expensive and primarily purchased by people with more wealth and income.”
As the state’s homes are increasingly purchased as luxury goods, more residents find themselves unable to even afford a first home.
We live in a society that has normalized the ownership of second homes; millions of Americans have them, including my own family and friends. However, from the standpoint of what is good for the overall community, wouldn’t it make sense to tax investment homes as the luxury goods they are and use the revenue to provide housing that is affordable for all residents?
A community that provides decent housing and prevents people from being houseless benefits everyone, even investment homeowners.
In fact, communities across the country facing housing shortages are taxing themselves to pay for affordable housing to ensure that everyone has at least one home they can afford.