Sat, Dec 16, 2023 5:21 AM
By Ria Joseph, The Center Square
Gov. Josh Green said he may call for a moratorium on short-term rentals in Maui if the industry doesn't work with the state to ease the housing crisis caused by the Maui fires.
The governor unveiled a plan to convert short-term rentals into long-term housing as thousands of fire victims remain in hotel rooms.
Phase I of the governor’s plan calls for engaging 3,000 STRs and transitioning them to long-term rental arrangements. The state will fund the STR rentals to allow individuals and families to remain there for two years. During this timeframe, accessory dwelling units known on the island as Ohana Units, transitional housing, and permanent housing will be constructed.
The challenge is convincing owners of the approximately 2,500 to 3,000 timeshares to offer their homes used as short-term rentals as long-term local rentals while the build happens.
“How do we do that? How do we get 3,000 short term rentals? Well it's not easy because many of them had bookings," Green said. "Also, the amount of money that people pay for short term rentals is extraordinary as opposed to what people actually get for regular rent."
Short-term rental rates are 352% above the cost of the usual base rent. It’s the equivalent of fetching over $17,000 per month for a house that would rent for $5,000 if rented out on the local market.
The state plans to provide incentives while carrying a “nuclear hammer.” Owners of short-term rentals and timeshares can expect offers of targeted tax relief and fair market value as an incentive to rent to the 12,900 Lahaina residents displaced by the fire. Should the incentives fail to motivate enough STRs to become available, Green may impose a short-term moratorium by mid-January, he said.
As of Monday, FEMA sent out thousands of letters to owners of STRs informing them of the offers. Funds for covering the fair market price points and some of the building will come from several partnerships private and public partnerships.
“I have had some people reach out and make made suggestions that they didn't want to rent to local people, and that made me very angry,” Green said, “They didn’t trust that people would leave the units when the program was coming to an end, that larger families would treat the unit with respect, and that's not anything I’ve seen."
The August fires killed 100 people and destroyed more than 2,000 buildings. The cause of the fire is under investigation.