Surprising support for new tax on Hawaiʻi’s powerful real estate interests

A bill that would make Hawaiʻi only the second state in the nation to pass a tax on a fast-growing type of property ownership known as real estate investment trusts is making surprising progress in the legislature.

REITs are now estimated to own more than $18 billion in real estate in Hawaiʻi. That’s the highest amount per capita in the United States, according to legislative testimony. REITs have snapped up many of the state’s marquee properties.

Since 2014, supporters of a REIT tax have made little progress in the legislature, stymied by some of the biggest real estate interests in Hawaiʻi and elsewhere.

But this session has been different.

Hundreds of local church parishioners, a bevy of progressive activist groups and about a dozen owners of small businesses in the state have allied in opposition to the owners of some of Hawaiʻi’s premiere real estate, including Ala Moana Shopping Center, Hilton Hawaiian Village and the International Market Place.

They are charging that the offshore real estate owners operating as REITs are tax dodgers who need to be compelled to pay more into state coffers.