The City Council on Wednesday passed third reading of Bill 34 (2024), which adjusts real property tax thresholds for certain classifications, and heard initial public testimony on Bill 63, a proposed dedication program allowing owners to dedicate property for long-term affordable rentals.

Why it matters: Bill 34 raises the threshold for residential-A classification so that more modest, owner-occupied multi-generational homes are not shifted into the higher tax bracket simply because market values have risen. Bill 63 would allow owners to dedicate a property for an affordable long-term rental serving tenants up to 100% AMI, with a minimum dedication period; council members and testifiers debated whether the proposed five-year requirement is too onerous and whether tenant eligibility verification would be intrusive.

What happened Wednesday: The council passed Bill 34, with supporters saying the change re-aligns the tax classification with its original intent and provides relief to local homeowners facing rising property values. Testimony in support came from the Honolulu Board of Realtors and multiple property owners and small landlords who said the measure would help long-term tenants remain in place.

On Bill 63, resident and property owner Malia Finda and remote testifier Natalie Wausa raised concerns about the bill’s proposed requirements. Wausa said the measure’s requirement that owners provide evidence of tenant eligibility could become “intrusive and invasive” and that the five-year dedication and retroactive penalty provisions were “not fair” and would discourage participation. Council Member Kehaino, the bill’s sponsor, said the measure is intended to supplement existing law and that the five-year period could be shortened in committee to two or three years to increase flexibility.

Quotes from the meeting: Natalie Wausa testified, “First of all, this would make it, a dedication available for long term rentals that are affordable… But there are some requirements in here that just don't make any sense to me.” Council Member Kehaino said the bill “is simply trying to incentivize residential-a homeowners to rent to local families.”

Next steps: Bill 34 has passed third reading and becomes law per the normal process. Bill 63 was introduced and will be discussed further in committee; sponsors signaled willingness to consider shortening the dedication term and to address documentation and enforcement language.

Ending: Council members said they will continue to refine Bill 63’s details in committee to balance incentives for owners with tenant protections and privacy concerns.