Maui Mayor Proposes Tax Incentives To Address Housing Shortage Following the Devastating Wildfire

West Maui Slowly Reopens To Residents And Tourism After Devastating Fire — (Photo : (Photo by Mario Tama/Getty Images)) In an aerial view, a recovery vehicle drives past burned structures and cars two months after a devastating wildfire on October 09, 2023 in Lahaina, Hawaii. The wind-whipped wildfire on August 8th killed at least 98 people while displacing thousands more and destroying over 2,000 buildings in the historic town, most of which were homes. A phased reopening of tourist resort areas in west Maui began October 8th on the two-month anniversary of the deadliest wildfire in modern U.S. history.

Maui County Mayor Richard Bissen on Tuesday submitted a bill that would offer tax incentives to owners of short-term rental properties who agree to convert their units into long-term rentals to help address the island's housing shortage.

In the bill, owners of short-term vacation rentals would be exempted from paying property taxes if they convert their units into long-term housing for displaced survivors of the devastating August wildfire.

"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," Bissen said.

Those who join the program can be exempted from property taxes between Feb. 20, 2024, through June 30, 2025. However, owners of short-term rentals assessed to value over $1 million who refuse to take part in the housing program will be required to pay more property taxes "to make up for the loss of tax revenue."

"This is one of many strategies we will use to address long-term housing needs. My team and I continue to examine all options to bring feasible interim and long-term housing solutions forward," Bissen added.

There are between 2,500 to 3,000 timeshare units, 12,000 to 14,000 non-owner-occupied homes, and 12,000 to 14,000 short-term rentals across Maui County, according to ABC News, citing data from the county.

The proposal will be discussed on Dec. 5 during the next County Council meeting. If approved, the bill will go into effect beginning January 2024.

The Devastating Maui Wildfire

Bissen's proposal comes months after a wildfire swept across parts of the island on Aug. 8, killing at least 97 people and displacing thousands in the process. Most of the properties destroyed in the wildfires were affordable housing units.

The proposal also came after some Maui residents camped out at a popular tourist beach as part of a "Fishing for Housing" protest in hopes of pressuring Bissen to use his emergency powers to shut down unpermitted vacation rentals and make them available to displaced survivors.