HONOLULU (HawaiiNewsNow) – The governor and Maui’s mayor are planning to put out significant funding to get Maui fire evacuees into short-term vacation rental units.
They are running out of options as another major federal deadline is looming, but turning to vacation rentals has the governor looking at a statewide change in how that industry is treated.
There is a sense of urgency in getting property owners to convert short-term rentals to long-term, because Gov. Josh Green said emergency housing money from the federal government is scheduled to run out in just two months.
“We’re not going to allow people to become homeless, we can’t do it,” Green said. “And we can’t keep people in hotels forever.”
Green agrees with many on Maui, who say the easiest way to house 7,000 fire evacuees now in hotels is in the estimated 12,000 to 14,000 short-term vacation rentals on island.
“We need those rentals, those houses for the people that were displaced,” he said.
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Hoping to find 2,000 to 3,000 units, Green is proposing to pay owners from $5,000 a month for a one-bedroom rental to $11,000 for four bedrooms.
The 13% Transient Accommodations Tax would be waived and the mayor is proposing waiving property tax as well — while raising taxes on those who continue to rent to short-term visitors.
The program would last for 18 months.
As for the cost — 2,000 two-bedroom units rented at $7,000 a month would cost a total of $252 million. The federal government would pay 75% so the state’s 25% share would be over $60 million. It’s a lot of money, but Green says hotels are costing twice that much.
“This is far less expensive, and is much more stable for family,” he said.
The next phase of the governor’s plan is to encourage modular housing units, offering $50,000 each for up to 1,000 units on properties outside the burn zone.
Green says those solutions can buy time while ramping up new housing construction.
But now he also sees the statewide vacation rental inventory, which he estimates at 100,000 legal and illegal units, as part of the solution to the state housing crisis.
“Whether its 80,000 or 100,000, housing is a lot,” Green said.
“And if half of those became available to our local residents at a reasonable rent, we really wouldn’t have a housing problem or not much of one.”
Green said he would like to see the Legislature debate vacation rental controls in the upcoming session. “It’s come to a head,” he told Hawaii News Now. “Hawaii is simply too desirable for the world to travel to. And that’s why you have this … really robust market for short-term rentals.”
He added, “People make a lot of money off of that. but what’s the consequence? We don’t have enough housing for our people.”
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