Gov. Josh Green hopes that owners of 3,000 short-term rental units on Maui convert to long-term housing in January for survivors of the Maui wildfires — or face a ban on short-term rentals and higher property taxes.
His current emergency proclamation following the Aug. 8 wildfires expires Jan. 4, and Green said Friday that he could lay down what he called “the nuclear hammer” sometime in mid-January.
“I’ll take whatever action’s necessary,” Green said. “It’s my job to take the hard position if our people aren’t being taken care of. I do want to be blunt. … I’m going to drop the hammer. At the end of the day, housing our local people is more important.”
Green estimates that Maui has 17,000 short-term rentals and another 8,000 illegal ones.
Convincing owners of just 3,000 short-term rentals to switch to long-term housing — meaning leases of one to two years — would enable 3,000 families that escaped the wildfires to move out of 40 hotels that cost an estimated $500 a night, including food.
So far, only a few dozen owners have agreed to rent their units for long-term use, he said.
As of Friday, 3,000 families representing 6,297 people were still living in hotels.
Maui owners who convert their short-term rentals into long-term leases for fire evacuees would see no property taxes, and rental incomes above market rates.
Owners who do not change their business models would face higher property taxes and a moratorium on renting to tourists, Green said.
“There’s no reason at all for people not to take this opportunity, provided they want to be good partners,” Green said. “It’s necessary.”
“This is an emergency,” Green said. “People are going to have to be thoughtful and kind.”
Letters from the Federal Emergency Management Agency touting the financial benefits went out Monday to 13,000 owners of short-term rentals.
They did not include the threat of a moratorium, Green said.
That will be up to him, he said.
“We’re motivated,” Green said. “January’s the month to get a lot of units for people.”
He said he has spoken to some owners personally who told him that “they don’t want to rent to local people. That made me very angry.”
“Multiple people” said “it’s their right to rent to whoever they choose.”
Maui already had a shortage of affordable housing before the wildfires destroyed 3,200 structures, most of them housing.
The destruction only exacerbated a statewide housing shortage of 50,000 units that Green and others say has sped the exodus of young people, working families and kupuna moving to more affordable states.
Other efforts to fill the housing gap continue on Maui and across the state, such as new construction and incentives to property owners who build accessory dwelling — or ohana — units, which will take years in many cases.
But converting existing short-term rental units into long-term housing represents the quickest way to help people who survived the wildfires find long-term housing — along with easing the statewide housing crunch, Green believes.
He hopes that convincing Maui property owners to transition to long-term housing also will help make housing more affordable across the entire state.
“We can only build so fast,” Green said.
It will mean convincing an entire industry to change its business model aimed at island tourism, Hawaii’s main economic driver.
“We have to make this change,” Green said.
He acknowledged that a moratorium on short-term rentals likely will lead to a court challenge and that it will be “very hard to move an entire industry off of their model.”
“We’re trying to take care of everybody,” Green said, “but it’s a big lift when you’re dealing with this many people (fire evacuees).”
Also on Friday, Green announced that the One ‘Ohana Initiative fund for families that lost loved ones or suffered injuries in the fire had grown to $162.5 million, which now includes funds from Hawaiian Telcom, in addition to the original contributions from the state, Maui County, Hawaiian Electric and Kamehameha Schools.
The fund would provide $1.5 million for families and victims, who could avoid lawsuits and “extremely low or no legal fees,” Green said.
But Green emphasized that it’s their choice to accept a payment or go to court.
“Whatever they choose is right,” Green said. “If they don’t (accept the $1.5 million), it’s OK.”
