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  • Friday, July 09, 2021 8:30 AM | Jen Russo (Administrator)


    Registration for Short Term Rental Condos

    Coming Up: Registration for Short term rental condos will be under review at the next Planning Commission agenda on July 13 at 9am.

    The Planning Department’s report on the proposal:

    https://www.mauicounty.gov/DocumentCenter/View/127730/071321_Agenda-Item-B2_Resolution-21-55-Apartment-District_memo

    Planning Department recommends using TMK rather than a registration number, and that each unit or property owner must hold a valid general excise and transient accommodation license for the property, with taxes paid in full and kept current, and be classified in the short term rental real property tax rate.


  • Friday, July 02, 2021 9:35 AM | Jen Russo (Administrator)



    What Happened at the PSLU meeting 7/1/21

    In the op-ed by Council member Tamara Paltin, [https://mauinow.com/2021/06/29/short-term-rental-home-caps-scheduled-for-discussion-in-committee/] she is quoted as saying that, ““Reducing the number of short-term rental homes will open up more long-term options for residents.” 

    The concern is the council continues to make difficult decisions based on hyperbole rather than actual facts. There are several factors that will open up more long-term options for residents, but decreasing the number of slots for future short term rental permits is probably not going to have much of an effect. There aren’t a ton of homeowners putting in applications for short term use, but there are a lot of homeowners buying second homes for seasonal use. There are a lot of building permits for seasonal homes. There aren’t a lot of options for affordable housing. 

    It is understandable that people are angry about the state of housing on Maui - however blaming legal vacation rentals is not going to solve the issue.

    In 2020 during COVID there was a perfect storm across the nation - creating a “Pandemic Shift” in home sales. There were low interest rates, little inventory and people wanting to move to Hawaii because they can remote work from home. This high demand for homes in Hawaii brought median house sales rates up to over a million on Maui. None of these home sales were to make a STR. You cannot even apply for a permit until you have owned your property for 5 years. This same “Pandemic Shift” had many people moving to Hawaii and Maui and renting long term, further exacerbating the long term rental problem, as many Maui renters can’t compete with mainland incomes.

    With the 220 or so permits that exist for short term rental homes about 50% of them are owned by Maui residents. These are residents that have chosen to go through the legal process, and many of them also provide long term housing on Maui for other residents. These are not bad people, and should be celebrated for their small business and work in the community and financial contributions to the county and housing. 

    Many of these owners vet their visitors carefully, and educate their guests carefully. There are certain stipulations for some properties that mean they do not qualify to make application for B&B 

    Every single permitted home has a local manager listed on the  property signage and that manager has their contact information on a sign on the property. 

    Maui needs more affordable housing in order to solve our housing crisis. Vacation rentals are already contributing to this solution. Vacation rentals are the biggest source of funding for Maui’s Affordable Housing Fund. 

    Affordable Housing Fund Contributions - 2019-2022

    Vacation Rentals have contributed a total of $18.7 million

    Timeshares have contributed a total of $5.9 million 

    Homeowners have contributed a total of $5.3 million 

    Hotel/Resorts have contributed a total of $4.8 million 

    Vacation rentals represent 37% of the county real property tax revenue generating a staggering $142.4 million this year.

    --

    There were a lot of written testimony regarding this PSLU item 67:

    112 written comments in the ecomment system

    https://mauicounty.granicusideas.com/meetings/1355-planning-and-sustainable-land-use-committee-2021-on-2021-07-01-9-00-am/agenda_items/60d66da74425383eb0000a03-pslu-67-cc-21-67-short-term-rental-home-permit-cap


    A lot of good points were made in oral testimony, but in the end the Planning and Sustainable Land Use committee members had their minds already made up. It seemed like they did not take into account the recommendations of the Planning Commission in their review of this bill, which was to initiate a study rather than arbitrarily choose cap numbers. They did not weight the 4 meetings worth of oral and written testimony that many in the industry made during the planning commission's public hearing (there was about 150 pages of testimony and minutes from those meetings). The proposed bill that went through the planning commission and planning department was represented with the intent to reduce the caps to existing and pending permits, and that is what people were testifying about. But when it came down to it, they reduced caps in some districts to less than the number of existing permits, with the plan to decrease the numbers through attrition. That was not something that was discussed or put in the report.



  • Friday, June 25, 2021 7:56 AM | Jen Russo (Administrator)


    Who pays for Maui’s Affordable Housing?

    This may surprise many, but Maui’s vacation rentals are in fact the largest contributor to Maui’s affordable housing fund. Since 2018, Maui’s vacation rentals have contributed $18.9 million towards affordable housing, more than all the hotels, all the homeowners and all other businesses COMBINED! In the same time period timeshares, hotels, and homeowner properties together have contributed $16 million. Vacation Rentals include legal permitted short term rental homes, condos, and Bed and Breakfast operations. By law at least 3% of real property tax goes toward the affordable housing fund, and this year the county council voted to have 6% of real property tax appropriated to the fund. Maui’s number one supporter of affordable housing by far is vacation rentals. While much has been said about the impact of vacation rentals, without them there would be dramatically less money available for the County budget and specifically for affordable housing.

    This year alone, short-term rentals will supply Maui County with $142.4 million in real property tax revenue. That is more than 1/3 of all the real property tax revenue collected County wide! As such vacation rentals are the largest source of funding for the Affordable Housing Fund raising $8.6 million this year alone, and have been the biggest source of funding for the last 3 years. The second highest contributor is non-owner occupied properties with $5.8 Million, this tax classification includes long term renters.

    Compared to other visitor related accommodations, vacation rentals are the only segment to have increased their tax contributions this year. Timeshares saw a 7% decrease in their assessed value, and will contribute $2.2 million less than last year. Hotel and Resort classification saw a 19% decrease in assessed value this year resulting in a $3.7 million decrease in funding from last year. Meanwhile, vacation rentals will generate $28.6 million more in property tax revenue this year, a staggering 25% increase from last year!

    The council and administration depend on short-term rental properties to fund our county. Likewise, vacation rentals support Maui’s homeowners as well, by subsidizing lower taxes for residents. Right now Maui homeowners generate $33 million in real property taxes. Without the $142.4 million in taxes generated by vacation rentals, homeowners would have to more than quadruple their taxes to keep the same county budget. Plus, Maui’s vacation rentals also generate local jobs, supporting a network of small businesses like accountants, contractors, landscaping, cleaning, restaurants, shops, and interior design professionals, all of whom in turn spend money sustaining the economic circle.

    While vacation rentals are often criticized, and seldom praised, it’s worth considering the value vacation rentals bring to the table as a whole to fully understand the context of the situation.

    Subscribe to our newsletter for more updates like these!

    To see this article in the Maui News go to https://www.mauinews.com/opinion/columns/2021/06/vacation-rentals-contribute-the-most-to-affordable-housing-fund/

  • Friday, June 18, 2021 7:52 AM | Jen Russo (Administrator)


    Visitor Accommodations Moratorium & Condo Registrations going to Planning Commission

    On Friday June 18th the county council approved the transmittal of a proposed resolution entitled "REFERRING TO THE MAUI PLANNING COMMISSION A BILL FOR AN ORDINANCE ESTABLISHING CHAPTERS 19.98 AND 20.41, MAUI COUNTY CODE, DECLARING A MORATORIUM ON NEW TRANSIENT ACCOMMODATIONS ON MAUI." 

    The resolution from council member Keani Rawlins-Fernandez includes the establishment of a Temporary Investigative Group by the Budget, Finance, and Economic Development Committee to look at tourism management. Fernandez said at the meeting and further explained in an Op Ed piece in the Maui News that, “A main focus of this TIG will be a substantial reduction of vacation rentals, including the approximately 11,000 units on the short-term occupancy list and aggressive enforcement of illegal transient accommodations. This is an effort that is supported by the hotel industry and unions alike, and I look forward to working closely with them during the TIG process. Steering tourism back into the hotel and resort areas is of high priority.” 

    (https://www.mauinews.com/opinion/columns/2021/06/transient-accommodations-moratorium-prioritizes-management-of-tourism/)

    We know vacation rentals are a legitimate part of a diversified and healthy transient accommodations industry for Maui. This TIG is of concern, the members of this TIG should also be working with members of the vacation rental industry and not only the hotel unions when looking at tourism management of Maui.  We anticipate this item appearing on the planning commission agenda around September. 

    Another item on the planning commission agenda of July 13th is the creation of a registration system for the legal permitted short term rental condos.  Here is the Planning Department report on the proposed ordinance

    https://www.mauicounty.gov/DocumentCenter/View/126257/Draft-Bill-for-Ordinance-Relating-to-Chapter-1912-Apartment-District-Vacation-Rentals?bidId

    For more updates like these sign up for our newsletter!

  • Monday, June 07, 2021 10:02 AM | Jen Russo (Administrator)


    MVRA in the news

    MVRA was interviewed and contributed to the NPR story “Vacation Rentals Continue To See High Demand, But Regulations Create Uncertain Future” that broke on Tuesday June 1st. We had the opportunity to comment on the benefits that vacation rentals bring to the Maui Community, and some of the issues we have seen this year with regulation on Maui.

    You can read the article or listen to the interview here: https://www.hawaiipublicradio.org/local-news/2021-06-01/vacation-rentals-continue-to-see-high-demand-but-regulations-create-uncertain-future

  • Sunday, June 06, 2021 7:44 AM | Jen Russo (Administrator)

    Travel announcements


    Maui County’s post arrival covid testing ended Friday, June 4, 2021. From May 4-31 - 92,963 travelers did post arrival testing, that resulted in 29 positive antigen tests, that equaled 5 positive NAAT tests. 


    Did your guests arrive with the wrong COVID test?


    It can happen, so what do you do? Unfortunately vacation rentals are still mandated to not take guests if they MUST quarantine. Some folks have said they have gotten calls from airport screeners with guests that do not have tests from one of Hawaii’s trusted partners.


    The county has a posted approved hotels for quarantine list here: Hotels/Motels in Maui County Approved for Quarantine by State of Hawaii and County of Maui as of 5/7/2021 * Property Name Open?

    For a list of the approved COVID test Hawaii travel partners check here: https://hawaiicovid19.com/travel-partners/


    For more information visit hawaiicovid19.com/travel and recommend guests register with the State of Hawaii Safe Travels online system. Only test results from Trusted Testing and Travel Partners will be accepted. All incoming travelers are required to have their temperatures checked and complete a health questionnaire online before they can leave the airport.

    Governor Ige announced some changes to Hawaii travel at his press conference yesterday. As the percentage of Hawaii population with vaccinations increases Ige plans to continue to lift restrictions.


    On June 15, 2021 restrictions on interisland travel will be lifted. There will be no testing and no quarantine requirements for inter-county travel,” said Gov. Ige. Travelers that have been vaccinated in Hawai'i will be able to bypass quarantine without a pre-travel test when returning to the state. This will end requirement for pre-travel test/ quarantine for trans-Pacific travelers who can verify that they were fully vaccinated in Hawaii.


    When the fully vaccinated in Hawaii reaches 60% the state plans to allow those vaccinated in the US to avoid quarantine without a pre-travel test, for those traveling within domestic locations. At the 70% vaccinated benchmark the state plans to end the safe travels program. Hawai'i is currently at the 52% vaccinated rate.


    You can watch the press conference here: https://www.facebook.com/387637784744953/videos/902735660283035


  • Saturday, June 05, 2021 7:37 AM | Jen Russo (Administrator)


    County Property Tax Rates are Set

    The Maui County Council voted unanimously yesterday to approve the proposed rates and their budget for fiscal year 2022. 

    The short term rental class saw the implementation of tiers and rates set at $11.11 for tier one, $11.15 for tier two, $11.20 for tier 3. The largest amount of real property tax revenue in Maui County comes from short term rentals, this year they will generate $142.4 million, up from $113.8 million last year during the pandemic. Vacation rentals represent 37% of our real property tax revenue for the current fiscal year and pay for 17% of the county’s operating budget. As such vacation rentals are the largest source of funding for the Maui County Affordable Housing Fund raising $8.6 million in the current fiscal year, and have been the biggest source of funding for the last 3 years.

    On the whole visitor accommodation related properties raised 55% of the County’s real property tax revenue. The hotel class saw an increase in rates to $11.75, and Timeshare saw a raise in rates to $14.60. 

    Certified values increased for short term rentals in FY2022. Certified values decreased by 19% for Hotel classification and 7% for Timeshare classification.

    For more updates like this sign up for our newsletter!

  • Saturday, April 03, 2021 7:55 AM | Jen Russo (Administrator)

    Mayor Victorino has announced his FY2022 budget. The proposed budget totals $828.9 million, including $669.6 million for operations and $159.3 million in capital improvement projects. There is a decrease in projected operation costs by $13.2 million over FY 2021. 


    The Mayor has proposed a decrease in the real property tax rate for owner-occupied residences below $1.5 million of assessed value and a decrease in all tiers of short-term rental classifications. 


    Short term classification details on the proposed rates:


    STR Class

    Assessed Value Tiers

    FY21 Rate

    FY22 Proposed Rate

    Change

    <=$800,000 

    $11.08

    $10.70

    ($0.38)     -3.4%

    $800,001 - $1,500,000

    $11.08

    $10.85

    ($0.23)     -2.1%

    >$1,500,000

    $11.08

    $11.00

    ($0.08)     -0.7%



    The proposed Commercialized residential classification rate is $4.60, no change from FY21.


    Mayor Victorino is also proposing spending $1 million to implement climate action projects and programs for Maui County departments. 


    “We must take action on climate change,” he said. “To manage this effort, my office will coordinate climate action to ensure the County’s resiliency.”


    To promote cultural perpetuation, the mayor is proposing grant funding for the Maui Arts & Cultural Center, Maui Film Festival and support for a Cultural Resource Training enter to perpetuate traditional Hawaiian research and education.


    “Investing in arts, culture and recreational facilities yields a double return on investment by generating economic activity while contributing to our quality of life,” the mayor remarked.


    “I look forward to working with the Council during the upcoming budget process. We share the same desire to ensure the needs of our citizens are met, now and in the future. Our partnership will lead Maui County of recent dark days into a brighter tomorrow,” concluded Mayor Victorino.

    Throughout the month of April, the County Council’s Budget and Finance committee will review the Mayor’s proposed budget and in late April will make their own proposal for Real property tax rates. We will keep you informed when it would be appropriate to send in testimony concerning tax rates, later this month.

    https://www.mauicounty.gov/DocumentCenter/View/126246/FY-2022-Synopsis_Mayors-Proposed


  • Tuesday, March 30, 2021 2:59 PM | Jen Russo (Administrator)


    By Jason A. Economou, Government Affairs, Realtor Association of Maui (RAM)

            I’ve been getting a lot of questions lately regarding recent changes to the Maui County Code that impact real property taxes, so I thought it prudent to try and explain what these changes mean. In order to do that properly, I need to start by providing some context.

            On December 4, 2020, the Maui County Council passed a number of bills that made changes to the County’s real property tax system. Among these bills were Bill 129 (2020) and Bill 130 (2020), which have been the cause of many recent questions. Both of these bills passed the County Council unanimously, but both were opposed by RAM. Bill 130 took effect immediately upon approval, and will impact property owners during the 2021/2022 tax year. Bill 129, on the other hand, does not take effect until January 1, 2022, but it is already raising a lot of concerns for the 2022/2023 tax year. For the sake of clarity, I will address these bills one at a time.

            First, I want to address Bill 130, because Bill 130 is the more immediate issue. Bill 130 (which is also known as Ordinance No. 5160) makes changes to Section 3.48.305 of the Maui County Code, which deals with the classification of land and buildings for the purposes of real property taxes. More specifically, it amends the portion of the code that relates to declarations of use for properties that have been subdivided into condominium units. The most significant of the amendments made are to the definitions of the “Non-owner-occupied” tax class and the “Short-term rental” tax classification. For more clarity, I have put side by side comparisons of the previous version of definitions and the newly amended definitions below:

    Previous version of definition

    Newly revised definition

    Non-owner-occupied. Only those units occupied by the owner for personal use or by a lessee for a term of at least six consecutive months or more will be classified as “non-owner-occupied.”

    Non-owner-occupied. Units occupied by the owner for personal use where transient vacation rental use is prohibited by the comprehensive zoning ordinance or units occupied by a lessee for a term of at least six consecutive months or more.

    Short-term rental. Unless classified as “time share,” “hotel and resort,” or “commercialized residential,” lodging or dwelling units, as defined in the comprehensive zoning ordinance, occupied by transient tenants for periods of less than six consecutive months will be classified as “short-term rental,” including properties granted a short-term rental home permit, or conditional permit allowing transient vacation rental use.

    Short-term rental. Unless classified as “time share,” “hotel and resort,” or “commercialized residential,” lodging or dwelling units, as defined in the comprehensive zoning ordinance, occupied by transient tenants for periods of less than six consecutive months, including properties granted a short-term rental home permit, or conditional permit allowing transient vacation rental use and units occupied by the owner for personal use or are vacant where transient vacation rental use is allowed by the comprehensive zoning ordinance.


    If it isn’t clear from the side by side comparison, the basic gist of Bill 130 is that it will cause a number of condominium property owners who were in the “Non-owner-occupied” tax class to be moved into the “Short-term rental” tax classification for this tax year. This sudden shift in tax classification means that some property owners may get stuck paying upwards of 60% more in property taxes this year than they did last year. If you are asking yourself “what the heck is the County thinking,” you can get some sense by reading the memorandum from Finance Director Teruya that was attached to the original version of the bill. If you don’t have time for that, let me summarize: the County sees this as a fast way to add upwards of $9,000,000 in tax revenue without a major impact to people who vote here.

            If you or one of your clients is a property owner impacted by Bill 130, you have until April 9th, 2021, to appeal the assessment or classification on your property. Please note, however, that you still need to pay your property tax even while it is under appeal. For more information on the appeal process, or to find additional forms, please follow this link and navigate accordingly.

            Bill 129 is a bit more complicated to explain, because it does not go into effect until 2022, and it also has a mixed impact on property owners. The positive side of Bill 129 is that it creates a “long-term rental” tax classification, as well as a long-term rental tax exemption. This means that effective Jan. 1, 2022, real property occupied as a long-term rental, with a signed contract to lease for 12 consecutive months or longer to the same tenant, may qualify an owner for an exemption of up to $200,000 of assessed value. Real property rented on a long-term basis (12 consecutive months or longer) without a home exemption, will be eligible for the $200,000 long-term rental exemption and will be classified as Long-term Rental. Real property with a home exemption that also qualifies for the long-term rental exemption will be eligible for an additional $100,000 exemption and will be classified as Owner-occupied. Thelong-term-rental exemption claim form

    is available with other forms at: 

    https://www.mauicounty.gov/1953/RPA-Forms-andInstructions. The deadline to file for the long-term rental exemption will be 12/31/2021.

            Though RAM has been a proponent of creating a separate tax class and additional incentives for property owners who provide long-term rentals, we did oppose some of the more troublesome aspects of Bill 129. The most troublesome aspect of Bill 129 is that it removes the portion of the Maui County Code that relates to real property tax classifications for condominium units and actual use declarations[1]. Without the ability to declare their actual use, condominium units will end up being taxed based on “highest and best use” of the property, unless some other property tax exemption applies and puts them in a different class (e.g. homeowners exemption/owner-occupied class, or long-term rental exemption/long-term rental class). This means that an apartment zoned condominium that is allowed transient vacation rental use pursuant to zoning[2] may now be taxed in the Short-term rental classification by default, even if the bylaws prohibit TVR use or the owner has never conducted such use. That is a drastic change to the status quo, and not nearly enough has been done to prepare property owners for this change. 

            Both of these bills have already been signed into law, so you’ve missed your opportunity to formally oppose the legislation. Notwithstanding, you are still allowed to reach out to your elected officials and share your thoughts. Moreover, you can even suggest additional changes to the law that might improve our real property tax system. If you are so inclined, here is the contact information for your elected representatives:

    • Mayor Michael Victorino:Mayors.Office@co.maui.hi.us

    • Council Chair Alice Lee:Alice.Lee@mauicounty.us

    • Council Vice-Chair Keani Rawlins-Fernandez:Keani.Rawlins@mauicounty.us 

    • Presiding Officer Pro Tempore Tasha Kama:Tasha.Kama@mauicounty.us 

    • Councilmember Gabe Johnson:Gabe.Johnson@mauicounty.us 

    • Councilmember Kelly King: Kelly.King@mauicounty.us,

    • Councilmember Mike Molina: Mike.Molina@mauicounty.us,

    • Councilmember Tamara Paltin:Tamara.Paltin@mauicounty.us,

    • Councilmember Shane Sinenci:Shane.Sinenci@mauicounty.us,

    • Councilmember Yuki Lei Sugimora: Yukilei.Sugimura@mauicounty.us,

    PS: While you are at it, you can also tell them that you oppose Bill 10 (2021). This bill increases the requirements for 201H development projects in Maui County, and it will likely result in a reduction of affordable housing construction in Maui County. The current requirement is that 201H fast-tracked developments have to offer 50% of their units at affordable rates; Bill 10 increases the requirement to 75% of the units at affordable rates for Maui County. That will make it harder for developers to finance 201H projects in Maui County, and that means less developers will be looking to build affordable units in Maui County.

    [1] This also happens to be the portion of the code that was amended through Bill 130. That means that the changes made in Bill 130 will be removed when Bil 129 goes into effect on January 1, 2022. It also demonstrates how unnecessary Bill 130 actually is.

    [2] Like one of these properties: https://www.mauicounty.gov/DocumentCenter/View/112945/Short-Term-Occupancy-List-as-of-12242020?bidId=


  • Friday, March 12, 2021 9:47 AM | Jen Russo (Administrator)


    In fiscal year 2020-2021 about 14 cents of every dollar budgeted in Maui County came from vacation rentals. Legal Vacation Rentals in the form of permitted bed and breakfasts, short term rental homes and condos are the number one source of revenue for Maui County in Real Property Taxes, and have been for the last three years.

    Support Maui's Vacation Rental Industry, they support you

    Join Maui Vacation Rental Association. MVRA unifies the vacation rental ownership community of Maui.  We believe in fair regulations that balance the rights of responsible owners, operators and their neighbors.

    Engage your Maui community, be informed on local property rights and taxes, protect your investment, and be a part of your local alliance. For more information go to Mvra.net/Join


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