Hawaii Senate Passes Bill To Ban Foreigner Home Purchases

Mar 17, 2020

HONOLULU — A bill to prohibit foreigners from buying some homes in Hawaii was endorsed by state senators in an effort to make housing more affordable for local residents.

The proposed ban drew questions about its effectiveness and constitutionality, The Honolulu Star-Advertiser reported  Monday.

The bill would generally bar purchases of homes that are more than 5 years old by people who are not U.S. citizens and legal residents, as well as companies and trusts controlled by nonresident aliens.

Two Senate committees advanced the measure last month, followed by a 25-0 March 3 vote by all senators to send the legislation to the state House for consideration.

The Senate Water and Land Committee amended the bill to delay its effective date to 2050 to encourage further discussion, while two committee members voted for passage with reservations.

The Senate Judiciary Committee issued a report last month report saying restrictions on residential property purchases by nonresident aliens may be unconstitutionally discriminatory and inconsistent with U.S. foreign policy.

The bill introduced by Republican Sen. Kurt Fevella and six Democrats as sponsors, drew overwhelming support in public testimony, though only about 20 written comments were submitted.

Resident Melinda Buck submitted written testimony referring to Japanese billionaire Genshiro Kawamoto, who bought nearly 200 homes on Oahu in the 1980s and 30 more in the 2000s, allowing many units to deteriorate while renting some and leaving others vacant.

The Hawaii Association of Realtors, representing more than 10,000 real estate agents, submitted testimony opposing the bill.

Ken Hiraki, the trade group's director of government affairs, said in written comments that home sales to foreigners accounted for about 3% of state real estate transactions last year.

Blocking the sales would do little to address the housing costs, Hiraki said.

The median home sale price on Oahu last year was $789,000 for single-family houses and $425,000 for condominiums.

CORRECTION: An earlier version of this story incorrectly referred to Republican Sen. Kurt Fevella as a Democrat.