In his second State of the State address, Gov. Josh Green focused on West Maui recovery efforts following a devastating wildfire, warning of a ban on short-term vacation rentals as more permanent housing is sought for those displaced by the deadly Lāhainā blaze.
“There are 27,000 short-term rental units on Maui alone, and — if we can dedicate just 10% of these homes to displaced Lāhainā families — we can house them all,” the governor said Monday morning.
On Aug. 8, 2023, a wildfire with hurricane-force winds ripped through the old fishing village razing it to the ground. At least 100 people died and thousands of families were displaced.
Despite the tragedy on Maui, Green said the state came together to support each other. As a result, he reports that the state of Hawai‘i is strong.
During his address, Green highlighted his Maui Interim Housing Plan, a $500 million initiative to create a pool of more than 3,000 housing units for at least 18 months. The collaborative effort had the goal of moving all displaced families from short-term hotels into long-term housing by July 1 with most households moving in by March 1.
In the coming weeks, the first shipment of modular transitional homes will begin to arrive in Maui as part of our Department of Human Services housing initiative — which will add 480 temporary homes, to help provide people with a sense of stability and security as the state implements further long-term housing plans.
Green is asking short-term vacation rental property owners to make their properties available to those displaced. If not enough people participate, the governor said he will be forced to declare a ban on all short-term vacation rentals in Maui starting March 1.
The state will cover fair market value of each rental for two years and property tax exemption for 18 months to those who participate.
“This is the right thing to do — and I urge you to join us,” Green said.
Those interested in participating are asked to email [email protected].
The governor pledged to sign into law, any bill to help move short-term rentals and vacant investment properties owned by non-residents, into the local housing market to increase supply and bring down prices for Hawai‘i families.
Right now, Green said, 52% of all short-term rentals in Hawai‘i are owned by non-state residents, and 27% of short-term rental owners own 20 or more units.
“Our housing crisis affects not only low-income families who may qualify for subsidized public housing, but also middle-class residents who earn too much to qualify for help, but too little to afford to buy or rent in the current housing market,” Green said. “Local families are being squeezed out of the housing market as 30-year mortgage rates hover around 7% — and median home prices remain way too high for many.”
The governor’s supplemental budget for fiscal year 2025 alone places a huge emphasis on infrastructure and housing, with requests totaling $373 million.
The governor said his team crafted a landmark piece of legislation that will provide tax amnesty to any owner of a short-term rental who chooses to sell it to help the state with Hawai‘i’s housing crisis.
“A sale of this kind — to an ‘owner-occupier’ local family, or to someone who turns the home into a long-term rental for a local family — will be exempted from capital gains tax, conveyance tax, and general excise tax,” Green said.
This “House Hawai‘i’s ‘Ohana” plan would start this fall and last 24 months. During this tax amnesty period, Green said he would personally encourage short-term rental owners from around the world to sell their properties back to Hawai‘i families.
Green also spoke about health care. On Sept. 9, his administration helped create a loan repayment program with JABSOM, the Healthcare Association of Hawai‘i, the State Department of Health to keep health professionals in the state.
This year, Green said they are placing an extra emphasis on selecting mental health and addiction treatment professionals to address heightened concerns that have arisen from the COVID era and the disaster on Maui.
“This initiative will help ensure that rural and under-served communities across our state have access to the healthcare providers that they need — and within five years, Hawai‘i will be the only state in the nation without a shortage of doctors, nurses, or social workers,” Green said.
Green also plans to address homelessness.
To help alleviate the suffering of homelessness in our neighborhoods, Green proposes building as many as 20 new kauhale communities across the state, to reduce homelessness by 50% by 2026.
He plans to address the cost of living, gun violence and Red Hill.
He also proposed a $25 climate impact fee to visitors when they check into a hotel or short-term rental, which would generate $68 million. Money would be invested into beach preservation, fire breaks, and other prevention measures to help the state avoid tragedies like the one last year in Maui.
“I believe in my heart this is not too much to ask of our visitors,” Green said.