A June 1st Wall Street Journal article, “The New Math on Inheriting Your Parents House,” highlights the changes in the real estate market after 2021 due to inflation and rising interest rates. Rising maintenance expenses, renovation costs, property taxes, and utilities are making it harder for heirs to hold onto inherited real estate and high interest rates make it impractical for one heir to buy out the remaining siblings. Leaving real estate is still a common method of passing along wealth and heirs are more often selling their parents’ home for the following reasons:
- The stepped-up basis helps avoid capital gains taxes from selling a home.
- The parents’ furniture is undesirable to younger generations.
- Renovations are too costly to make the parent’s home fit the child’s taste.
- While primary homes are being sold more often recently, secondary homes are still likely to be kept by the heirs for a few years at a minimum. Children should work out an agreeable schedule for family vacations and find a way to split the maintenance costs fairly. Heirs should carefully consider their finances and make sure keeping the asset does not become too much of a financial burden since it takes time to sell a home.
The state legislature failed to provide funds for late rent and include a rule to require mediation prior to court-ordered eviction and plans on revisiting the measure next year. The legislature did fund $7 million in rental assistance to prevent low-income residents from becoming homeless. Despite the expiration of the mediation rule, judges routinely require parties to attempt mediation prior to an eviction hearing.
The City of Honolulu has fallen further behind in its Handivan shortage when the cost per new vehicle jumped 34% to $201,234 resulting in a purchase of 17 fewer vehicles. The availability of its aging fleet dropped from 90% last year to 67% in March as maintenance kept some vehicles off the road and others were retired. Apparently, the city council and mayor could not find additional funds in their annual budget to service the needy.
An Aloha United Way report highlights the struggles of families trying to make ends meet after a year of high inflation. The “household survival budget” for a family of four is $104,052, 15% higher than 2018. According to the study, 41% of Hawaii families combined income falls below the threshold.
Heavy rains and an ancient wastewater treatment plant have created higher than allowable bacterial levels in Kailua Bay. The Kailua Wastewater Treatment Plant’s effluent empties into Kailua Bay and the facility has continuous violated the levels set by the Clean Water Act this spring resulting in daily warnings stretching for months. Bacterial levels exceeding six times the allowable limit was measured in Kailua Bay from April 28th to May 1st.