Maui Mayor Richard Bissen has proposed a bill amendment he hopes will help increase housing inventory for Maui fire survivors.
The bill would offer tax incentives to homeowners to convert short-term rentals into long-term units. If approved by the county council, the change would go into effect on Jan. 1.
Under the proposed bill, the owners of Maui’s thousands of vacation rentals would be exempt from paying real property taxes, only qualifying if they offer their rentals to those displaced by the fire on a long-term basis. Those taxes would be exempted from Feb. 20, 2024 to June 30, 2025.
"I believe that a shared sacrifice is necessary at this time," Bissen said in a statement.
Bissen said he also intends to increase property taxes for vacation rental units that do not participate in the conversion program. Under the bill, homeowners willing to help disaster-impacted families by making their units available for long-term rentals would receive a tax waiver.
Short-term rental units are currently taxed as the second highest of all tax rate classifications, at $11.85 per each $1,000.00 of its assessed value.
“My team and I continue to examine all options to bring feasible interim and long-term housing solutions forward. We still face significant water, wastewater and infrastructure challenges in West Maui – conditions that were already difficult before the disaster which have made some options not immediately possible," Bissen said.
There are an estimated 24,000 short-term rental units, or second homes, on Maui.
The proposed bill will be heard at the Maui County Council meeting on Tuesday.
