The efforts to convert short-term Maui vacation rentals into long-term housing solutions for survivors of the Lahaina fires does not appear to be working. With that fact comes the very real and soon-looming threat from Hawaii’s governor for a moratorium on Maui vacation rentals. That was recently postponed until April 1, but it appears that won’t be the case for much longer.
At this point, over 3,500 fire survivors are still in emergency housing, and the FEMA program supporting them will end in a month. Efforts to move survivors into long-term housing have been problematic for multiple reasons. And the idea that the governor will get enough housing without a moratorium appears to be wanting. FEMA data indicates that fewer than 500 displaced families have been placed in the FEMA program.
Gov. Green’s ultimatum will hit in two weeks’ time.
Green has indicated that by April 1, he must secure the additional housing units needed from those Maui vacation rental owners thus far unwilling to join his program. Even as concerns exist about the legality and enforceability of a moratorium, the governor is moving forward with a plan, the details of which have not yet been revealed. Nothing of this nature has ever been done in Hawaii. If it happens, it will be as a result of emergency powers the governor may try to enact due to last August’s fire.
Green has offered huge payment and property tax incentives for those letting go of their vacation rentals in favor of providing homes for long-term renters.
What will happen to Maui tourism in light of the vacation rental moratorium likelihood?
If much-needed Maui Tourism is impacted by even the news of a moratorium that could come in days, that could impact visitor numbers. We believe, in fact, that is highly likely. That would also result in more unemployment on Maui and have other unintended and wide-ranging consequences.
In addition, short-term rental property owners are likely to take legal action.
This won’t go down easily. Some have suggested this is Green’s misplaced desire to help fire victims. Other have suggested various alternative ideas, including converting some hotels into long-term rentals. That might move the impact from being exclusively focused on vacation rental owners. Others have even wondered about stationing ships off-shore for housing.
Is a Maui vacation rental moratorium a smart move?
Aside from unquestionably opening a long, complex and expensive legal battle, Hawaii is still in a struggle to achieve strong Tourism numbers. In addition, as we reported previously, long-term rentals on Maui are already negatively impacted by the results of the fire and higher FEMA rents that have caused some owners to try to eliminate prior long-term renters.
Does the threat of a Maui vacation rental moratorium impact your plans?
Isn’t there just one political party in complete control of the state…..? Maybe some diversity could help. Or voting out every single incumbent next election? How could new people do worse than the “leaders” who are currently slowing down the rebuilding and moving forward? Totally open to hearing how having only one political party in power has helped the beautiful people of Maui.
lol! That’s a great point. Diversity, diversity, diversity everywhere! Except when it comes to political parties. No conservatives allowed.
Well the way it works back home the week after a fire owners are back to their lot cleaning it up. Is the gov nat allowing people back in? Insurance will start the rebuild. Is insurance not a thing in Maui. No insurance you are out of luck, now you have a lot to sell. If you are waiting for the gov to solve personal problems you will wait forever. Let the gov finish their little cover up and get out of the way. The people need to rebuild.
My understanding is the vast majority of the owners (not necessarily the displaced, since upwards of 60% of them were renters) are either uninsured or woefully underinsured. They didn’t expect something like this to happen – it’s quite a rare event for houses to be leveled like this.
It would pay for all of us to check our homeowner’s insurance policies. “Full replacement coverage” costs quite a bit more.
I have some sympathy for those who took the risk that something like this wouldn’t happen, and who got a more affordable insurance policy. They made a reasonable gamble, and lost.
Consensus is many will sell off the land and go do something else. Understandable, but such a pity.
What you describe is if one house burns down. Here you have an entire town burn. A town full of old buildings with asbestos and other toxic materials that require additional cleanup. The problem now is not whether anyone has insurance, it’s that Maui already had a shortage of housing and now you’ve got thousands of people with no place to live. It’s way more complex situation than your example.
I suspect that condo owners who have no interest in taking on long-term rentals when asked will not suddenly agree while being blackmailed. Instead, a moratorium will likely result in lots of empty condos while the owners wait him out.
It is very difficult to manipulate such a large and rich market as this. And, to be honest, I think the governor is in over his head — manipulated by the hotel industry and the anti tourist groups who are using this tragedy for their own gain.
Anyone ever play the board game Monopoly?
You buy houses. Goal is to buy more houses. The more houses you get, you trade them in for hotels. Why?
Because, you as the owner of the property gets to collect more money for people landing there. And, as a hotel owner, you have to pay higher taxes.
The hotel owners win with a whole lot of money coming in, and the government wins with more tax money coming in.
Looks just like what is happening in Maui.
A monopoly!
Good analogy, but hotels and STVR owners both pay the same TAT and GET tax rates.
Just one problem, short term rentals pay a higher property tax rate on Maui than hotels currently under this Administration. Hotels win here, individuals one again lose.
Looking at Maui the answer is barely… (per $1000)
Agricultural 5.74
Apartment 3.50
Owner-Occupied Tier 1: up to $1,000,000 1.90
Owner-Occupied Tier 2: $1,000,001 to $3,000,000 2.00
Owner-Occupied Tier 3: more than $3,000,000 2.75
Hotel and Resort 11.75
TVR-STRH 11.85
Time Share 14.60 <– WOW looks like these people are taking it hard.
realpropertyhonolulu.com/media/1979/state-report-fy24-final-tax-rates.pdf
Hawaii governor wants to “drop the hammer” on STR owners and pass a morotorium on them, and use their condos for the Lahaina fire victims. Has he ever said
even once about also “dropping the hammer” on the hotels and resorts too???
In 2005, New Orleans floods, FEMA brought in lots of trailors for the victims to live in. Why can’t the governor and FEMA do the same and put the trailers in the old sugar cane fields or other opened fields with the temporary infrastructures to suppout them? Instead, he proposes to put the morotorium on short-term vacation rentals punishing the owners. Now, the owners can’t even use the condos themselves.
The repercussions on this act will be very detrimental. How many industries will this hurt?
Trailers? On Maui? You want to sail ~2000 trailers 3000 miles then prepare infrastructure? Even at $15k per month that the hotels now get, it’s a drop in the bucket compared to that cost.
The governor should have been on the phone to FEMA asking for them to start loading up travel trailers the day after the fires. They could have had hundreds of them there within weeks. Seems like it would be easier to find some land to use rather than the proposed actions.
Please use some logic. New Orleans and other mainland disasters are connected to one huge chunk of land. Mobile homes are already staged because the gulf coast is so prone to hurricanes. Shipping thousands, not hundreds, of trailers to a remote island 3000 miles from anywhere makes zero sense.
However, in terms of ongoing cost, what would have made sense long ago would have been to never allow homes on barrier islands and right next to the ocean in hurricane alley.
Ok. Let ’em go homeless. Apparently it’s too much to ask to make a short commute from the free housing they are being offered. FEMA has the trailers or access to them. Shipping 150-200 of them at a time is not an insurmountable obstacle. There could have been enough of them here by now to make a dent in the issue that is happening as we speak.
Initially they advertised that they would get the tenant OUT if and when needed. It suddenly changed to you should be prepared to have long term tenant if (yeah right when) the program is extended. And them what? If you can’t trust them to kick out a bad egg or even a good one whrnt he time has come to go go go, then nope
Also it seems like Jeff bozos wants to dump alien looking snachez for Eva Longoria. Pretty pathetic.
Not sure how Bezos and Sanchez/Longoria are relevant here, but this is probably the funniest post I have read in a while.
You also made some very valid points leading up to the Bezos part, and I couldn’t agree more with those concerns.
Even if the Governor puts a moratorium on STR’s, and/or the change in zoning happens to force us into a long term rental, I won’t do it. period. It’s not that we don’t want to help but we won’t be bullied.
If you truly want to help, you would have already looked into your kuleana. There would have been no need to blame your apparent lack thereof to being bullied.
Let’s start with the words “pono”, “kuleana”, “aloha”, and “ohana”. All of these represent why Hawaii is (or should be) unique among the states. Pono: thankfulness for our blessings. Kuleana: responsibility (for more than ourselves). Aloha includes the purest of love, and ohana: family extends beyond relatives.
Let’s continue with another fact. 53% of all vacation rentals are owned by out-of-state owners. According to HTA that number rises to 70% on Maui, with a few owning more than 25 rentals.
If we all would look deep inside our hearts, we would recognize that providing a home is the least one can do to help the recently homeless their own. It’s past time for humane.
To imply that condo owners are somehow less humane than (real?) Hawaiians for not giving up their own units is wrong and does nothing to help anyone.
Please share that opinion with my homeless daughter, husband and one-year old baby who lost their home and tourist-oriented business. Give them your advice.