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In the U.S., rising home prices and a limited home supply have caused many affordability issues, resulting in homelessness and housing insecurity. This crisis has particularly struck Hawaii, a state with exceptionally high home costs compared to other states, prompting the consideration of drastic measures that could impact the market.
State Senator Brenton Awa has introduced a bill aimed at mitigating the exceptionally high prices in the Hawaiian real estate market and making homes more accessible to Hawaii residents. The bill would restrict property purchases in Hawaii exclusively to U.S. citizens and permanent residents. This approach is not an entirely novel solution, having been employed in other U.S. states and locations across Canada.
The goal is to impede wealthy buyers from other nations from entering the Hawaiian market. Residents have long dealt with luxury developments introducing high-cost housing while affordable options remain scarce. The passage of the bill could lower home prices by decreasing competition, potentially increasing the supply of homes.
Substantial legal impediments hinder the full implementation of this bill. State Attorney General Anne Lopez shared that the bill may not only induce significant financial liability for the State from legal action against it, but also may violate the Fifth Amendment, 14th Amendment, and Fair Housing Act. A comparable bill in Florida was recently blocked, with its alignment with protections granted by the Constitution’s 14th Amendment being a prominent factor. Consequently, it remains uncertain whether this bill could advance to the point of impacting Hawaii’s real estate market.
Public reactions to the bill have been mixed. In addition to the aforementioned issues, concerns have been raised about potential impacts on tourism and the state’s economic health. However, there is a growing consensus on the urgent need for change.
