Mayor: Let's aid resident owners

Hannemann will ask the City Council to tax homeowners at a different rate from owners of multiple properties

Mayor Mufi Hannemann said he will again ask the City Council to create a tax break for homeowners who live in the properties they own.

"I'm going to ask the City Council again to put us on that list of counties that have a separate homeowner classification," the mayor told reporters.

Hannemann met yesterday with Big Island Mayor Harry Kim, Maui Mayor Alan Arakawa and Kauai Mayor Bryan Baptiste, and property taxes was one of the subjects they discussed.

"I think this time (we have) much more concrete examples and evidence from the counties on the neighbor islands on why it's worked for them," said Hannemann, whose idea did not make it through the Council last year.

Hannemann's proposal comes as property values are up 15 percent, the fourth year that valuations have increased by a double-digit margin.

Creating a homeowner classification would enable the city to set a lower rate for single-family and condominium residential property owners who live in their homes. But it would also mean higher rates for property owners who do not occupy their residences.

HIGHLIGHTS OF THE MAYOR'S PROPERTY TAX PLAN Mayor Mufi Hannemann plans to ask the City Council to again consider a homeowner classification that would establish a lower tax rate for owner-occupants, similar to what the other three counties have created. Who it would help: Owner-occupants could see lower property taxes. The City Council rejected such a proposal last year, concerned that a homeowner's classification would hurt renters. Who it might hurt: Renters could end up paying more because landlords who do not occupy their residential properties could see higher property taxes, which could be passed on in higher rents.

But the incoming chairman of the Council's Budget Committee said that the idea of creating a homeowner classification might not fly with the Council.

"As I saw the proposal last year ... it wasn't something that was overly appealing to me. I thought at the time that there were other ways of helping the owner-occupant homeowners," Councilman Todd Apo said.

Councilmembers were worried that a homeowner's classification would hurt renters.

"One of the important things we talked about last year was trying to also help the renters with the understanding that the people who own investment property aren't just the guys who are buying and selling," Apo said. "They are guys who buy and rent to our residents, and so we need to take a look at that whole picture."

"As to the homeowner classification, it's really a policy question of whether or not you create a separate classification like they proposed last year, or you can work it through homeowner exemption, which is the system that exists now," he said.

Apo said the Council doubled the exemption to $80,000. "Either way, you get to the same end result."

Hannemann said his goal is to put the tax burden on those who can afford it.

"I would like to get at those who are speculating -- those who this is their third, fourth, fifth home and those whose primary residence is not here," he said. "To me, everybody's struggling to make ends meet here in our community, and there are those who can afford a second, third, fourth home or Honolulu is not their primary residence. ... Those that have the ability to pay more should pay more."

Apo said he would like to see how much money the city requires to provide needed services and then allocate an appropriate percentage of revenue to meet those needs. But he is willing to listen to the administration's pitch.

"With real property taxes there are so many ways to come about it, and obviously he's had the discussion with the other counties as to how they deal with it -- the pros and cons of their system," Apo said. "It's definitely something that I think we're all open to discussion to. Again it's a matter of meeting big-picture goals."

Hannemann said that with the Council planning to reorganize with new committee leaders, he wants to wait to see who ends up on the committee before going into detail.

"Since there's going to be a new committee that's going to come forward, I don't want to opine too much on what we'd like to do," he said. "One of things I think is clear, having been a member of the City Council, that they also want to put things on the table."

Removal of Hawaii Kai median OK'd Star-Bulletin staff The city has given a contractor the green light to remove a controversial 140-foot section of median on Lunalilo Home Road in Hawaii Kai starting in February. Contractor Site Engineering Inc. was awarded the contract after submitting a bid of $92,500, the lowest of seven bids submitted. The two-month project will include removing the raised median between Kaumakani and Anapalau streets near Koko Marina Shopping Center. Trees removed from the median will be saved and relocated. The median was constructed in 2003 by former Mayor Jeremy Harris to help slow traffic on the busy road, but the project was met by opposition even before it was completed.