Tropical storm
Vancouver investors are speaking out regarding a move by Hawaii�s legislature to nix self-management of vacation properties in the state.
Bills before both houses of the state legislature would require investors to contract out management of properties for fees that range between 25% and 45% of property revenues. The bill�s ostensible goal is to curb alleged tax evasion, but investors such as North Vancouver real estate agent Terry Gardiner say the proposed legislation would limit investors� freedom to choose how they manage their properties.
Gardiner bought a one-bedroom unit in Honua Kai, a development by Intrawest spinoff Playground Destination Properties Inc. just outside the town of Lahaina on Maui in 2011. Weighing his options between Intrawest�s rental program, which would take 45% of his revenue and local options that would charge between 25% and 35%, Gardiner opted to manage the suite himself. Rentals are arranged through Vacation Rental by Owner, a service operated by Texas-based HomeAway.com Inc. Contractors in Hawaii service the suite for him. Gardiner is licensed as a business in the state and pays his taxes regularly. And he doesn�t see why he should have to pay someone else to do everything he�s already doing.
�What these laws will do is force me to use a property manager in the state of Hawaii,� he said. �I�ll have to start budgeting for 35% to 45% to come off the top, which at the time I made this investment decision was not even in the wind.�
Bills before the state legislature define �nonresident owners� as any owner �who resides on a different island from the property or out-of-state and who rents or leases the property to a tenant.�
A review of the legislation by a state senate committee notes that regardless of the tax implications, the lack of a licensed property management company overseeing suites leaves �guests vulnerable in the case of emergencies or natural disasters.�
But Gardiner isn�t buying it, especially given efforts by the U.S. Congress to introduce a visa that would allow investors buying $600,000 or more in real estate to spend more time in the country. Hawaii, by contrast, seems to be discouraging investment.
�Can you imagine if they brought in a bill in Vancouver that said you had to use a realtor and MLS to sell your property, that you couldn�t go for sale by owner?� Gardiner asks. �It�s ridiculous. This is the same thing.�
Many investors in Honua Kai and other Maui vacation spots hail from Vancouver, and Gardiner believes the little-known legislative measure could have a significant impact. He is holding off on further investments in Honua Kai until the state decides what it�s going to do.
Zoning in
B.C. pledged �to examine the feasibility of setting up an international trade zone to attract new investment� in the jobs strategy Premier Christy Clark unveiled last fall. A federal consultation process regarding such zones closed last Friday, and a review of the parameters governing the zones is expected to complete in the coming months.
One advocate of such a zone in B.C. is the Vancouver Airport Authority, a member of the Foreign Trade Zone Coalition that also includes B.C. representation through the Greater Vancouver Gateway Council, Prince Rupert Port Authority and Port Metro Vancouver.
A foreign trade zone is typically geared toward manufacturing enterprises, but YVR�s support of such a venture underscores the efforts to draw complementary uses to Sea Island. A 40-acre site north of the airport�s north runway will be home to a new, 700,000-square-foot processing facility for Canada Post in 2014, while geotechnical work has concluded that a 30-acre site adjacent to Templeton station near the Arthur Laing bridge could accommodate up to one million square feet of office space.
The airport also expects to announce a partner this spring for the development of a 350,000-square-foot retail complex near BCIT�s aerospace campus. A request for proposals has identified the most likely proponents for a partnership with YVR, and a business case for the project will be drafted once the relationship is formalized.
�If that business case suggests that a retail development is likely to be successful then we would proceed with that,� said Tony Gugliotta, senior vice-president, marketing and business development for YVR. �