Gov. Josh Green’s second State of the State address largely focused on Maui recovery and housing.
Green emphasized the need to get Hawaiʻi residents into the housing inventory currently used as short-term rentals.
“I will sign into law any bill the Legislature sends to me that will help move short-term rentals and vacant investment properties owned by nonresidents into our local housing market,” he said.
“This will increase supply and bring down costs for our families.”
One of the legislative initiatives the Green administration proposed, HB2416 or SB3105, would provide tax amnesty to any owner of a short-term rental who chooses to sell it to a local family or someone who will turn the home into a long-term rental for local residents for at least a two-year lease.
The bill specifies that the property cannot be rented or sold to an immediate family member to qualify.
Green told reporters that he will be putting pressure on the short-term rental market including significant tax increases on the industry — especially owners that don’t live in Hawaiʻi.
“It's not going to be the best place to be in business any longer for short-term rentals from the mainland because we have to house our local families,” Green said.
Green also gave an update on his Maui interim housing plan, which would create a pool of more than 3,000 housing units for at least 18 months to house those displaced by the fires.
He said that they are about two-thirds of the way there, but urged short-term rental owners to participate in the program.
Green warned that if he was unable to secure the housing inventory by March 1, he would put a moratorium on short-term rentals.
However, Lahaina Strong, an advocacy group of fire survivors in a statement said they wanted to see Green put the moratorium into place now.
Another initiative Green announced was a $25 climate impact fee that would be imposed on visitors when they check into a hotel or short-term rental.
He estimated it would bring in about $68 million a year. The funds would go toward fire mitigation and environmental conservation efforts.
HB2416 or SB3105 is a scaled-back version of a similar measure the state Legislature did not pass last session.
However, House Finance Committee Chair Kyle Yamashita told reporters he was supportive of the concept.
“We're going to just look at everything and we're going to decide how to go forward,” he said.
“But I think in concept, we kind of are in agreement that there should be something that people pay into that are impacting us, and it should come from people from outside the state.”
Green said he would be open to other proposals that would achieve similar results — even increasing the transient accommodations tax (TAT).
House Speaker Scott Saiki said lawmakers would need to look deeply into the issue if they decided to increase the 10.25% hotel tax.
“Any increase in the TAT would have to be completely justified,” he said.
“A couple of years ago, we allowed the counties to tap into the TAT and assess a 3% charge. So that has gone into effect recently. Whenever we propose to increase the TAT, we really need to look carefully at the numbers and whether there will be an impact on the visitor industry.”
The deadline for lawmakers to introduce bills is Jan. 24.
