This weeks news was abuzz with proposals and potential mandates from the Mayor and Governor with regard to housing. There have been weeks of meetings and suggestions, and the state and county are desperately trying to locate mid-term housing.
“By converting short-term units to long-term rental properties, and renting them to residents who have been displaced by the disaster, owners of Maui’s thousands of short-term vacation rentals, timeshares and non-owner-occupied homes will be exempted from paying real property taxes,“ says Mayor Bissen in a press release.
The Mayor has introduced a new proposal, bill 131 that will be introduced in the 12/5/23 County Council Meeting. This new tax relief proposal is aimed at incentivizing short term rental owners to rent to the residents displaced by the wildfire disaster.
According to the press release from the county the exemption is meant to work like this:
“If you have a property assessed at $1,000,000 classified as TVR-STRH, your taxes for this fiscal year are $11,850. If you lease your entire property and the lease begins January 1, 2024, and ends December 31, 2024, you will receive a $5,925 reduction in this year’s taxes (2nd installment) and the full $11,850 in next year’s taxes if you apply by January 30, 2024. That is an estimated savings of $17,775.”
Some of the things we have asked the administration to clarify are:
- What FEMA will pay: We hear that it is 175% of HUD rates plus utilities, plus extra if the unit is furnished but knowing some of the ranges they are offer would be useful.
- What is the time period and what happens after that term
- Who takes care of the unit, and damages if incurred
What the proposal does not put in writing is the Mayor’s intention to increase tax rates for next year. However he does verbalize this idea saying, ”I also intend to propose to the County Council an increase of property taxes for all short-term vacation rentals, timeshare units and non-owner-occupied properties assessed at over a million dollars that do not participate in this program designed to help our Maui people secure housing. Owners who help our disaster-impacted families by making their units available will receive a tax waiver. While those who choose not to can help by contributing more in taxes to make up for the loss of tax revenue.”
To participate in the 12/5/2023 meeting:
Regardless of what the Mayor says here, the county may have little alternative to raising property taxes next year, as it looks at more than 65 lawsuits, huge infrastructure builds post recovery, and other post disaster budget increases.
If you are interested in participating in the FEMA direct rental program you can gain more information from this page that The State Department of Business Economic Development and Tourism has put together. Thyere is a short explanation of the FEMA direct lease program, just one of the ways FEMA is working on housing. On this page it says they are offering 175% of market value rent, and looking for 12 to 18 month rentals. For more information https://dbedt.hawaii.gov/hhfdc/fema-direct-lease-program-for-maui/
State DBEDT also has a resource website where you can go to watch previous Maui recovery webinars, FAQs and updates https://dbedt.hawaii.gov/pathwaystorecovery/