A wave of Japanese purchases of everything from farmland to memberships at prestigious country clubs has sparked a backlash among those peeved at a resulting rise in property taxes and tee-off waiting times.
But many call the criticism the latest in "Japan bashing" and say the foreign-based investment is a boon and a sign of Japanese confidence in the U.S. economy.Mayor Frank Fasi has proposed state legislation to prohibit the sale of residential, agricultural or preservation property to anyone who is not a U.S. citizen, has no plans to become a citizen or would not live on the land at least half the year.
Fasi's proposal, based on similar statutes in Nebraska, Wisconsin and Mississippi, would not affect the sale of commercial, resort and industrial land. It has little chance of being considered by the legislature because it was submitted late in the session.
Fasi blames the Japanese for skyrocketing property taxes resulting from rising home prices, and for longer waits for tee-off times at the Honolulu Country Club, where Japanese nationals pay $150,000 for memberships.
"They just about own downtown," Fasi said Wednesday.
He denies his proposal is racist.
"All I'm trying to do is stop the speculators from doing here what they've already done in Japan," which is price out the average buyer, Fasi said.
Earlier this week it was announced that a Japanese real estate firm paid a record $280 a square foot about $14 million total for a parcel of land in Honolulu's Kapiolani business district.
Japanese investors have paid a total of $99 million for property along Kapiolani Boulevard since 1986.
Another Japanese investor sparked protests last month over his plans to evict an elderly couple from the agricultural land they had leased for 10 years so he could build a golf course.
A Japanese real estate firm recently paid $21 million for Casa Blanca Del Mar, the highest price ever paid for a private home in the exclusive southern Oahu beachfront area of Waialae-Kahala. The average value of homes there has risen between 30 percent and 100 percent under the latest city property assessments, mostly because foreign investors have been snapping up houses at high prices.
Residents say they have received unsolicited offers in their mailboxes and been offered millions of dollars in cash for their homes.
Wali Osman, associate economist of the Bank of Hawaii, said the strength of the Japanese yen and the ability to borrow against high-priced Tokyo properties allows the Japanese to pay more than Americans.
"What the Japanese are doing is perfectly logical," Osman said. "They would be foolish not to take advantage of the strength of their yen."
The Japanese have invested heavily in Hawaii since the 1960s. Osman said the latest surge about $3 billion invested since 1986 attracted attention only because so many properties were purchased in a short time.
"Maybe they put in a little too much money a little too fast," Osman said. "But $3 billion is a small portion of the total assets in the state."