MEDIA RELEASE

Mazie Hirono introduced a bill earlier this year in Congress that will drive up Hawaii Island’s housing prices and reduce the number of houses available for local families, according to Linda Lingle for Senate Campaign Manager Bob Lee.

Hirono’s VISIT USA Bill would provide U.S. residential visas for foreigners spending a total of at least $500,000 to purchase one or more residential properties in the United States. At least one of the purchased properties must be valued at $250,000 and must be at least a part-time residence.

For the Big Island, historically already a target for “second home” investments, this would add more incentive to foreigners to buy houses priced for younger and middle-income families.

“I don’t know if Congresswoman Hirono knew this provision was in her bill or not, but she should have known,” Lee added.

This incentive will drive housing prices up higher than the current median price of a single family home or condo on the Big Island ($255,000 and $289,000 in September, respectively), [1] by creating more competition for housing priced at $250,000 and above.

With this new incentive for foreigners, Hawaii would see further sharp increases in housing prices, making it even more unaffordable for local families who are struggling to find a home in one of the most expensive housing markets in the nation. [2]

This could be a repeat of the foreign residential home buying spree, which took place in Hawaii in the 1980s that put homeownership out of the reach of many local families.

“The VISIT USA Bill may mean more foreign visitors to Hawaii. However, I question Hirono’s judgment of including an additional incentive for foreign buyers to compete with and price our local middle-income families out of housing,” Lee said.

SOURCES:

[1] Prices Rise, Sales Drop for Big Island Homes in September, Pacific Business News (Oct. 8, 2012) (available at:http://www.bizjournals.com/pacific/blog/morning_call/2012/10/prices-rise-sales-drop-for-big-island.html)

[2] Homeownership Markets, First Quarter 2012, Center for Housing Policy (available at: http://www.nhc.org/chp/p2p/)