Today’s State of the State address by Governor Green addressed a multitude of important issues, many of which had already been on the table. These will now be before the state legislature and impact Hawaii residents and visitors alike.
Maui vacation rental moratorium is possible by March.
First, there remains no easy solution to housing on Maui in the aftermath of the Lahaina fire. Today, in his State Of The State address before the Hawaii Legislature, Green said that there is still a need for approximately 3,000 short-term rental units to be converted to long-term rentals to house those Hawaii residents in need. He said there are some 27,000 short-term rental units, of which he wants 10% to be converted to long-term rentals for fire victims and others. In exchange, the Governor plans to provide “fair market value” returns for two years and an 18-month tax exemption.
He warned, “If not enough partners join us by March 1, I will be forced to declare a moratorium on short-term rentals in West Maui to house displaced families.” How that would be done, or the exact impact that would have, was not indicated.
Green pointed out that those who own short-term rentals are making, on average, four times the amount they would if they rented the same properties to local families. He also reiterated that 52% of short-term rentals are owned by non-Hawaii residents and that 27% of short-term rental unit owners own twenty or more units.
More regulations and taxes on Hawaii vacation rentals.
Both for housing fire victims and to counteract the extreme shortage and high expense of housing throughout Hawaii, Green wants to return short-term rentals to the long-term rental market.
To do that, the Governor wants more regulation on Hawaii vacation rentals. The exact nature of that plan was again not revealed, but he did say that there would be “tax changes to short-term rentals.” Green said that “should bring sanity to bear.”
He also envisions a tax amnesty that would help turn short-term rentals into long-term rentals. His stated goal is to get “Short-term rental owners “around the world to sell back their short-term rentals to Hawaii families.”
Climate impact fee, as predicted, is back with a vengeance.
Green said his current thinking is for a climate impact fee. “I’ll renew our efforts to implement a fee. A $25 fee when they arrive and check into a hotel or short-term rental. This modest fee is far less than other fees.” He said that would immediately generate $68 million in annual revenue. “We’ll invest it for beach preservation, fire breaks, and other measures,” said Green.
Option to increase Hawaii’s 18% tax on accommodations.
Governor Green said that alternatively, he would seek an Increase in the accommodation tax that visitors (and residents) pay for hotels and vacation rentals. He hopes that statewide tourism income will be slightly higher this year than last despite the tourism losses on Maui.
“We have to convert short significant numbers of short term rentals to long term rentals” — Governor Josh Green.
Previously, Green had said that if there isn’t more affordable housing, “we will have a two-tiered society. We will continue to have too little housing for working families, firefighters, nurses, and all the people that we know. And we’ll gradually drift to a society that doesn’t have services and can’t keep local people here. I’m learning things in this job.”
This comes as messaging about Hawaii visitors remains confused.
Maui visitor numbers are finally starting to indicate a recovery is in sight. The way the state and some residents view visitors, however, remains a big question mark, as seen in hundreds of comments in the past few days regarding the potential for increases in taxes and fees. Those come in addition to already over-the-top costs of a Hawaii vacation.
Why are STR’s the “sudden” reason for lack of affordable housing after so many years of knowing such a predicament was already in place? Is this really our fault?
STR’s provide affordable rentals for guests who spend lots of taxable dollars and further provide the jobs necessary to spend them. Forcing them out of the market will eliminate many tourists and thus eliminate the jobs needed to take care of them. What then? Locals living in FEMA paid housing for a limited time, their jobs decimated (thus less income) and your tax base seriously damaged. Less jobs means less income tax and more tax money going out to provide for housing and unemployment. That is a no-win for everybody except corporate-owned hotels/resorts.
Real estate taxes and fees for vacation rentals are already the highest in the country. Three times higher for comparable rental ocean front properties in Florida. Eventually you will kill the Golden Goose
Vast majority of west maui is condo’s where HOA are in the thousands per month, The people who lost their homes, Not many people anywhere in the USA can afford rent that would be 5 grand a month.
As usual screw the little guy, Hotels will make even more as they will jack rates even higher