Exclusive: Gov. Green's Plan to Transform Short-Term Rentals in Maui

Hawaii Gov. Josh Green.Photo byAudrey McAvoy / AP

Gov. Josh Green proposed a potential moratorium on short-term rentals in Maui if the industry doesn’t collaborate with the state to address the housing crisis resulting from the recent fires. He revealed a strategy aiming to transform these rentals into long-term housing solutions, especially since numerous fire victims are still lodged in hotels.

The first phase of the plan outlines the conversion of 3,000 short-term rentals into long-term housing, sponsored by the state for a two-year duration. Concurrently, efforts will focus on constructing accessory dwelling units, transitional housing, and permanent residences.

However, persuading 2,500 to 3,000 timeshare owners to convert their properties into long-term rentals poses a substantial challenge. Governor Green acknowledged the difficulty, considering the pre-existing bookings and the substantial price disparity between short-term and local rent.

The exorbitant rates of short-term rentals, at a staggering 352% higher than typical local rent, present a daunting obstacle. These rentals can fetch over $17,000 monthly, compared to the regular $5,000 rent for a similar property.

To motivate STR owners to participate, the state plans to offer targeted tax relief and fair market value incentives. These offers are intended to encourage the 12,900 displaced Lahaina residents to secure long-term accommodations. In the absence of adequate voluntary participation, Governor Green might enforce a short-term moratorium by mid-January.

FEMA has already dispatched thousands of letters to STR owners, outlining the incentives and financial assistance available. Funding for fair market prices and construction will stem from various public-private partnerships.

Green expressed frustration over property owners being hesitant to rent to locals, highlighting concerns about trust and respect. He debunked misconceptions that locals wouldn’t vacate the units post-program or treat them disrespectfully, emphasizing his belief in the community's integrity and responsibility.