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"The committee(s) on CPN recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in CPN were as follows: 4 Aye(s): Senator(s) Baker, Taniguchi, Nishihara, Slom; Aye(s) with reservations: none ; 0 No(es): none; and 3 Excused: Senator(s) Galuteria, Green, Solomon."
Waiting to see what amendments they refer to. Probably insist the PMs to manage out-of-state principle residence as well. Feeling a little cynical today... sry
Not sure what is wrong with this site...took me 5 tries to log in. Anyway, PLEASE PLEASE post comments to the Civilbeat article and ask others to do so as well. We want to make sure it stays at the top of the list on the Home Page where it is currently #3. As soon as some other hot topic gets lots of comments it will fade...Here is the link again.
Ok, The Vancouver Sun has published my op-ed. This is the early digital version, but I have to say that having seen the layout on the "Issues & Ideas" page, it covers a lot of real estate. Great head, sub, and picture caption.
Here it is:
Attached is a PDF version, too, but later today, when I get back from SFO, I'll have a PDF of the piece as it actually appears is the paper.
Lastly, "Business in Vancouver" pushed another piece, and it, too raises NAFTA. Again, great headers about the danger of investing in Hawaii. I'll post a PDF of that one, too.
But for now, this will have to do.
State targets off-island rental property investors in grab for cash; new law would ignore digital age and turn back clock on free trade deal
By ADAM J. LEAMY, Special to the Sun April 1, 2012 10:02 PM
Canadian owners of rental properties in Hawaii are being left in a precarious position as the state considers legislation to require island-based management
Much has been written in these pages in The Vancouver Sun about Catalyst Paper and its battle to see the District of North Cowichan bring balance to its industrial tax rates. Now, with the company in creditor protection, little time to set the fundamentals right, and a recognition that jobs and benefits could be lost forever if they aren’t, there has been much attention paid to the role of the North Cowichan council’s tax intransigence in killing the goose that laid the golden egg.
North Cowichan council does not stand alone in demonstrating “me-first” policies that threaten all around it. The Hawaii state legislature has taken dead aim at NAFTA and the provisions it requires of the state, and the protections it affords Canadians who make cross-border investments in vacation rental properties.
Through digital communications and the Internet, owners of vacation rentals have been able to rent them out to Canadians and others seeking to visit the Aloha State, using websites they’ve created, and others they’ve joined, like Vacation Rentals By Owner. And no wonder: As the state reported last year, Canadians travel in party sizes of two or more, are more commonly repeat visitors, independent travellers, and stay in hotels and condominiums. Canadian vacationers get the accommodation they want, and the state reaps great benefit from its tourism export. The Hawaii Tourism Authority reports that, in December 2011 alone, visitor arrivals from Canada were the force in Hawaii tourism, spending close to $1 billion.
But like the video store, the record store, and the landline home phone, Hawaii property rental companies have been hit hard by the digital age. Travellers are, for a host of reasons, deciding they’d prefer to rent directly from an owner, and the Internet makes this possible. In the face of this consumer choice, Hawaii property rental agencies and the realtors they employ had two choices: compete in the digital age, or find a fix that turned back the clock. And in pressing the turn-back-the-clock easy button, they found Hawaii state legislators happy to oblige.
Four bills are advancing through the Hawaii legislature that target off-island, i.e., Canadian, owners of vacation rental properties. Senate bills (SB2078, SB2089) and House bills (HB1706, HB1707) require off-island owners of vacation rental properties to turn over the management of their rental property to some form of on-island licensed real estate broker or salesperson, managing agent, rental agent, or condominium hotel operator. Curiously, local, on-island owners of vacation rental properties are exempted from the bills and their provisions.
Legislators say the measures ensure tax compliance, but the only evidence of non-compliance is anecdotal, and provided by the above-noted licensed real estate brokers or salespersons, managing agents, rental agents, or condominium hotel operators. The state has no data to suggest this is the case, and in a classic case of “legislate first, get facts later,” says it will undertake to find out.
Legislators say the measures enhance consumer protection, but the only evidence on that front is again anecdotal, and again courtesy of the same group of usual suspects who stand to gain when the state grants them a monopoly to rent out all privately owned vacation condos.
And what a monopoly it will be. Testimony on these bills has revealed that the commissions Hawaii property management firms charge to properties under their “care” can be 30, 40, and 50 per cent, with all manner of hidden costs and property abuses. It’s hard to see how those commissions will decline, or how quality and service will increase once a state-legislated monopoly is in place.
An exemption has been proposed for “non-residents,” i.e., Canadian cross-border investors, but it has been so error-ridden, it beggars belief that it’s intended to be effective, or survive. Moreover, it would only be accessible to Canadian investors if they subscribed to some additional process that the state has yet to identify.
But such an exemption, for Canadians, is a non-starter anyway. The North American Free Trade Agreement (NAFTA) did away with all this, through the “national treatment” protection to cross-border investors. As NAFTA specifies, under Article 1102, “Each Party shall accord to investors of another Party treatment no less favourable than that it accords, in like circumstances, to its own investors, and investments of its own investors, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.”
NAFTA goes even further: “The treatment accorded by a Party means, with respect to a state or province, treatment no less favourable than the most favourable treatment accorded, in like circumstances, by that state or province to investors, and to investments of investors, of the Party of which it forms a part.”
Since NAFTA came into force, all kinds of Canadians from every part of the country have made cross-border investments in the U.S. Some will be wealthy, some will have pensions. Some, like the writer, will view the investment as a part of his retirement planning. But directly or indirectly, all of us rely on the trade agreements and tax conventions that allow U.S.-Canada cross-border investments to be made with confidence. We also rely on our federal and provincial governments to abide by NAFTA provisions and, as important, to ensure these provisions and protections are honoured in the U.S.
Thousands of Canadians have made and operate similar investments in Hawaii, Florida, California, the New England states and all other states and regions of the United States, providing legal guest accommodation in all manner of housing types and locations. In the same vein, thousands of Americans have invested in vacation and second properties in the provinces and regions of Canada, and through responsible management decisions, make them available to tourists visiting those locations.
This is no time for free-trade welchers. If individual citizens of Canada and the United States made cross-border investments, only to see themselves the focus of targeted operational requirements and costs after the investment had been made, NAFTA would be discredited within both countries at its most basic, grassroots level. It is of no use to individual Canadians to have or support further trade agreements if the governments that negotiated them and that participate in them won’t ensure that the provisions are being complied with, and their protections are being upheld for individual Canadians.
In the end, though, the Hawaii legislature has underscored the nature of the times we live in, when governments are desperate for revenue, and lack the capacity or concern to get their fundamentals right. In these times, it may well be that NAFTA and trade agreements like it just don’t, or can’t, work any more.
If desperate governments do desperate things to right a foundering ship, these Hawaii bills may bring the ‘me-first’ approach to other states and then to Canada and the provinces. After all, there are still voices here who, in recognizing that Canada is the single-greatest supplier of oil to the U.S. after U.S. domestic production, would enjoy dismantling NAFTA and the “national treatment” protection and charge Americans a much higher price for oil than Canadians pay. Never mind the supply of Canadian fresh water to water-deficient states.
It just seems a far more practical approach to head off such problems before they take root, and spread. Whether it’s the Hawaii state legislature, the District of North Cowichan council, or anywhere else where policy gets put into action, the task of generating competitive and sustainable operations is not served by ignoring reality, or by trying to turn back the hands of the clock.
Adam J. Leamy, a partner in Northwest Public Affairs, a B.C.-based consulting firm, owns two investment properties on Maui.
© Copyright (c) The Vancouver Sun
No -- heading back from SFO, and literally out of time. No fax, either.
I did let them know that Business in Vancouver has a news story out on the dangers of investing in Hawaii in light of current bills and intent. It's been read to me, but I haven't seen it. Sounded usable, though.
Have read your excellent article in the Vancouver Sun. Everyone should. Currently am working to sign onto the site via my facebook account registration. Will leave my comments there. I think Hawaii's legislators will be alarmed to see that this news is getting this coverage outside of the state now.
HomeAway people...please register and leave your comments there for the Canadian Readers of that newspaper know that we are working on this issue here. We do not want the visitors or the investors from Canada to pull out! This would be a tremendous harm for everyone concerned. Please take a few minutes to make your comments to the Canadian readers of this article.
Adam and jwe, Perhaps mvaughn can do so, she has efax. But jwe, if you could ask your office staff to do so, it will get there earlier, and mvaughn may be headed off to work and unable to attend to this until this evening.
jwe - can you find someone in your office to help?
Thank you AJL!!!
Everyone should post a comment to this article so that we will get to the top of the list and more people will view us.
To be able to leave a comment at the Vancouver Sun, LINK to the article, press the COMMENT box at the top of the article, you will be prompted to REGISTER your email and create a password which will then send you a confirmation email and then you are set. You may need to repeat the above steps, but then choose SIGN IN instead of REGISTER when asked. There are a lot of OPINION articles at this newspaper, we do not want to get drowned out. Please REGISTER and leave your comment, and forward to anyone else that might be interested.
Done. Sent it to all the representatives who are discussing SB 2947 today. Also attached it as testimony. I have a very hard time logging into this site for some reason so would appreciate any To-Dos for me to go to the FB page. thanks
I see that some are trying to make a comment on the op-ed at The Sun. Great idea, even if there seem to be glitches. Someone just sent me an email dating they were going to send the link along to their local media. Also clever.
I know that the piece made it into some key media summaries this morning, on both sides of the US border. Here's why:
By The Associated Press
President Barack Obama is convening a summit with leaders from Mexico and Canada on Monday that aims to boost a fragile recovery and grapple with thorny energy issues against a backdrop of painfully high gas prices.
So today is all about trade and upholding commitments.
A grand day to drive the NAFTA message.
Hi I just posted on The Vancouver Sun site. Excellent article Adam! I have also forwarded it to Peter Mitham from Business in Vancouver. I contacted him back in February and he has written two articles since. The first was a warning to investors regarding the pending legislation and the second was wfitten ( unfortunately) during the period after the first two Bills were set aside BUT before they morphed into the Bills that were presented last week. Hopefully he does a further follow up. I had submitted his first article as testimony in the filings for each Bill as they surfaced.
So what about this. While hoping for a nice properly written article how about flooding all the letter to editor sections of all the various Hawaii media, the Honolulu papers, the island papers where your Vr is located as well as the various TV websites. Maybe enough traffic would spur interest in running a story.
I wonder if some really good writer did a piece on how this legislature has morphed from beginning to end in the various bills, deferred and back to life in another bill.