Hawaii’s governor hails support for Maui and targets vacation rentals exacerbating housing shortage
HONOLULU– Hawaii Governor Josh Green used his annual State of the State address Monday to lead lawmakers and guests in a moment of silence for the victims of the Lahaina wildfire and to propose aggressive steps to shift more vacation rentals to residential use to address both Maui and the state’s acute housing needs.
Those gathered for the speech gave a standing ovation to two Maui firefighters – Keahi Ho and Koa Bonnell – who traveled from Maui for the governor’s address, which focused primarily on helping Maui recover from the deadly forest fires in August.
“The people of Maui have shown strength in the face of adversity,” said Green, a Democrat. “But the coming days will not be easy and they will continue to need our support and we will be there for them for as long as it takes. .”
A wildfire fueled by hurricane force winds tore through the historic coastal town of Lahaina on August 8, killing 100 people and destroying thousands of homes and buildings.
Green’s recognition of all those who came to Maui’s aid after the fire brought tears to the eyes of state Rep. Dee Morikawa, majority leader in the House of Representatives and a Democrat representing western Kauai and Niihau.
“It’s just good to know that all of Hawaii is coming together for Maui,” Morikawa said after the speech.
The most pressing unmet need on Maui now is stable, long-term housing for about 5,000 residents who are staying in hotel rooms because they have been unable to find affordable rental housing on the island, one of the most expensive places in the country to live. .
Green aims to have all 5,000 residents moved into long-term housing by March 1, in part by encouraging vacation rental owners to make their homes available to wildfire evacuees. He told reporters that authorities have so far lined up about two-thirds of the homes needed. The Federal Emergency Management Agency and charitable organizations will pay the rental costs.
More broadly and in the longer term, Green proposed a two-year “tax amnesty” to encourage vacation rental owners across the state to sell to owner-occupiers or long-term rental companies. Participants would be exempt from capital gains, transfer and general excise taxes under this two-year program.
Green told reporters afterward that he would put “a lot of pressure” on short-term rentals because he did not believe they were appropriate.
“I don’t want to be rude, but I do want people to realize that that market should be for our local families,” Green said. He noted that workers in a number of areas — including nurses who are now striking at the state’s only children’s hospital — are struggling because of Hawaii’s housing shortage and high housing costs.
Additionally, Green said he is asking the Legislature to put $373 million in the budget for infrastructure and housing.
“This remains the highest priority for our government,” he said.
Green reconsidered the idea of imposing a fee on travelers to help pay for environmental maintenance after a proposal to do so was defeated in committee last year. The governor proposed charging every family visiting Hawaii a $25 “climate impact fee” when they check into their hotel or for a short-term rental. He said this would generate $68 million a year.
Democratic House leaders have worked with the governor to identify common priorities, particularly on affordable housing, mental health care and climate change.
House Finance Committee Chairman Kyle Yamashita said he would have to look at the details of the governor’s tax amnesty plan but indicated he was open to the idea.
“Ultimately, I think we should look at every option to address this problem,” Yamashita said after the speech. “They’re hitting residential areas all over the state. And it’s something we need to look at more deeply.”
House Speaker Scott Saiki said the House would work with the governor.
“We have to solve the problems in our state, and we have to find solutions that are workable,” Saiki said.