MAHALO to everyone who participated during the State Legislative session. It was a hard-fought battle and we greatly appreciate your efforts. We cannot do this without your ongoing support.

Below are critical updates through this past week. Become a member or encourage others to join to receive the latest news on matters that impact our industry.

STATE UPDATE

• MVRA helped to defeat over 20 state bills during this past session that were harmful to our industry with the support of other island alliances and the new statewide advocacy organization- Hawaii Mid and Short-Term Rental Alliance (HIMAST).

• SB2919, which grants counties full control over short-term rentals, unfortunately passed the legislature, and was recently signed into law by the Governor.

• This legislation takes effect January 1, 2025.

COUNTY UPDATE

With the passage of SB2919, the County of Maui has announced that they will introduce a bill to phase out STRs on the Minatoya List.

• A draft of the Bill is not yet available, but we will let you know when it has been issued.

• As described by Mayor Bissen, the measure would:
• Phase out all STRs on the Minatoya List located in West Maui effective July 1, 2025.
• Phase out all STRs on the Minatoya List located in all other parts of Maui effective January 1, 2026.

• The Bill is scheduled to be heard by the Maui Planning Commission on June 25, 2024 with Molokai and Lanai Planning Commission hearings to follow.

HOW YOU CAN HELP

Your support is needed more than ever! We need everyone from the STR industry to join our fight to kill this Bill.

• Recruit - Please reach out to family and friends on the island as well as your property managers, cleaners and vendors who work within the industry. We will need their voices to be heard!

• Testimony - Start drafting testimony – emphasize your personal story. In addition, be sure to highlight how phasing out STRs will hurt the local economy and community. MVRA will be distributing key messages very soon.

• Join MVRA - Encourage others to join MVRA to support this effort and stay informed!

• Become a Leader - If you are interested in becoming more involved, we are actively seeking new Board Members. Please send us a message if you are interested.

MVRA ACTION PLAN

• MVRA is actively engaged with STR platforms Airbnb and Expedia to coordinate activities and leverage resources.

• MVRA is also actively engaged with other industry organizations including HIMAST to mobilize advocates on Maui and throughout the state.

• MVRA is in discussions with expert attorneys to support our industry as we push back on proposed policies.

• MVRA is currently transitioning a new Executive Director. Throughout this process, the organization remains active and continues to lead advocacy efforts on Maui.

• MVRA continues to add members to strengthen its Board of Directors to advocate on behalf of the Maui STR community. We encourage you to reach out if you’re interested in joining the Board.

ACT NOW BEFORE IT'S TOO LATE

The mid and short-term rental industry is under attack in the state legislature. Two Bills - HB1838 and SB2919 - would give the Counties full authority to phase-out rentals in any zoning. This includes disallowing rentals for less than 180 days, negating the important HILSTRA lawsuit win. It also includes the Minatoya list which encompasses a large percentage of Short-Term rentals on Maui. The Statewide organization - HIMAST (Hawai’i Mid and Short-term Rental Alliance), along with the island alliances are focused on stopping these Bills. We need your help!

Both Bills will have another hearing. As we are only given 48 hours notice of Hearing dates, we are asking that you prepare now.

Here's What You Can Do to

Help Defeat These Bills:

• Register on the State Capitol Website to enable testimony submission. What this VIDEO to learn how.

• Prepare your testimony now. Tell your personal story of how your life in Hawai'i will be imapcted if they take away your ability to rent your unit (or be employed in the short-term rental industry). You can easily cut and paste or attach a document to your testimony submission once the Hearing is set.

• Call or email your district legislators. Look them up HERE. As a constituent, you are VERY important to them. The following legislators are key at the next Hearings: Senator McKelvey, Representative Cochran and Representative Amato.

• Ask your cleaners, contractors and other industry supporters to also submit testimony. Personal stories from residents are best. However, to make it easy here is a template that you can customizer for their use: STR Supporter Testimony

• Reach out to residents and important visiting contractors that you've accommodated for testimony. (Displaced Residents, military, traveling nurses, emergency workers) Share with them this template to submit their personal stories of staying in a short-term rental: STR Guest Testimony

Please take these five steps today to save our industry. Even getting one Cleaner/ Contractor and one former guest will triple your impact. Support for these Bills has outpaced opposition so far. We can change that!

Please prepare now so that we will be ready with more testimony for our legislators to consider.  

Together, we can do this! 

If you have any questions please feel free to email me

at membership@mauivacationrentalassociation.org

Mahalo

MVRA Board of Directors

We support the Malama Maui pin.

The pin, named after the Hawaiian phrase "Malama Maui," signifying "Caring for Maui," hopes to offer solace to residents while providing guidance for visitors. Its fundamental purpose is to establish a supportive environment for our residents by offering a visual cue to visitors, signifying the importance of refraining from inquiring about the experiences of Maui residents, thus respecting their privacy. Lisa Paulson, executive director for Maui Hotel and Lodging Association said “The Malama Maui Pin coordinates beautifully with all our messaging on how to visit Maui with respect and compassion. Many survivors are not ready to share their experiences with others.” 

This seemingly small gesture, embodied by the Malama Maui Pin, hopes to serve, and safeguard our people and provides a visual cue for visitors to understand how to engage or not engage with our community. 

To obtain Malama Maui Pins, visit MauiChamber.com or e-mail office@mauichamber.com.

MVRA Needs Your Attention

and Support!

Both the State Legislators and Local Council are convinced that our short-term rentals are the only solution to the fire victim housing issue. This may result in the amortization or phasing-out of legal rentals on Maui. 

JOIN THE FIGHT AGAINST

UNFAIR “TAKING” OF PROPERTY RIGHTS

Joining MVRA will ensure the organization can continue this work and fund a professional state lobbyist to combat harmful regulation. If we don’t all pitch in, we will continue to have our rights and income taken away at the whim of legislators and the hotel lobbyists that support them.

Earlier this year Civil Beat reported on the top Lobbyist expenditures and how much was spent by different entities. They remarked on Airbnb and Turo being in the top 30 along with Young Brothers and Hilton Vacations. Here is what we found when digging into the lobbyist and campaign contributions data deeper:

Source: https://ags.hawaii.gov/campaign/cc/view-searchable-data/

Hotel and resorts spent 16 times more than the vacation rental industry with $623K raised in campaign contributions during the same time frame.

Source https://hawaiiethics.my.site.com/public/s/

Hotels were the largest spenders on lobbyists with $1.6 million over the last 5 years, 5% of total lobbyist funds. Unions spent $903K representing 3% overall, while construction and vacation rental platforms accounted for about $722K and $750K, and 2% each respectively.

We are being outspent politically on every level and now feeling the results of that.

The legal vacation rental industry is a large and legitimate industry in Hawaii, raising billions in revenue, property taxes and visitor spending, but individual ownership makes it a fractured industry, hard for legislators and county and state administrations to understand. It is easier for them to deal with big corporations, top down one size fits all legislation, management with big payrolls and unions. 

Source: Hawaii Tourism Authority, DBEDT

However, the state and counties derive a lot of funding and jobs from the legal vacation rental trade, and visitors and mid term renters including nurses and doctors depend on and relish the diverse options for accommodation. Owners of vacation rentals are local families. This is one of the only ways we give our local residents ways to participate directly in the hospitality industry. Other owners of vacation rentals are our return visitors, living part time in the islands. They are some of Hawaiiʻs most engaged visitors, supporting small businesses, caring for the environment, taking care of residents that work in the industry, and paying premium tax rates for the privilege to do so.

We need more cohesion in the industry to share and educate the legislators and increase the volume of our collective voices. We are working hard to protect your interest in the short-term rental industry. Please Join or Donate today at MVRA.com.

TVR/STR Real Property Tax Trends

Speaking of real property tax increases, Here is what we know about the last 6 years in property tax trends and the Short Term Rental Classification.

The short term rentals generated 40% of real property tax revenue this fiscal year (FY23-24), or $213.7M. This amount represents 20% of the county operating budget. This is the largest single revenue generating category in the real property tax classifications. Next would be Non Owner Occupied property $127.6M, followed by Timeshare $54.7M and Hotel Resort with $51M. 

The county increased their budget this year by $102M, and 52% of that increase or $53M came from increased revenue in the TVR/STR category. The next highest increase was $7.5M in the Hotel/Resort classification (7 times less than the STR increase).

The short term rental category is the only category out of all twelve of the county land use classifications that has seen 6 consecutive years of increased tax revenue generation. It is also the only land use classification that has seen 6 consecutive years of increased assessment value in this period as well. The TVR/STR classification grew from 28% in FY2018-2019 to 40% of the total Real Property Tax revenue in 5 years.

Looking at visitor adjacent land use classifications specifically, the county has an increasing propensity to lean on the visitor industry to make up the lion's share of their budget. The classifications of Hotel/Resort, Timeshare, Non Owner Occupied and TVR/STR together comprise 84% of the Real Property Tax revenues in this fiscal year. That figure was 56% in FY2018-2019. 

To view this data stream click here. 

Source for all data sets https://www.realpropertyhonolulu.com/state-reports/2023/

Gov. Josh Green's Proposal

The Governor also announced a proposal on Wednesday to incentivize housing on Maui. Gov. Josh Green’s version includes long term rental pricing at $5K/mo for studio or 1 bedroom; and up to $11K/mo for a 4 bedroom; and plans to use federal, state government and private foundation money.

Green’s program also involves dedicating funding of $50K per unit to build 1000 accessory dwelling units on private property. Property owners would be able to choose from 5 pre approved models of ohanas and get any necessary zoning changes within 30 days. Green’s plan includes expediting existing housing projects as well.

Green has a plan B as well, but that focuses on a ban of short term rentals. “A second option would allow the government to impose an 18-month ban on short-term vacation rentals on Maui. Under that plan, some $324 million of federal, state and private funds would be used to pay property owners who would give 18-month leases to displaced residents instead of renting to tourists or others for a short term.” according to the article by Civil Beat.

The state legislature has formed working groups to work on recovery solutions for the wildfires. The Shelter working group led by Troy Hashimoto and Luke Evslin published their draft report that include 4 recommendations for expediting housing. The first is expediting housing projects with state financing options; the second is cutting regulatory burdens; third is to utilize short term rentals for long term housing; and fourth is ideas for housing the vulnerable. 

Recommendations 3 starts with incentivizing the short term rentals to convert with tax incentives as we are seeing the government do now.

But the darker side of recommendation 3 is for the state legislature to introduce a bill granting counties authority to phase out non-conforming STRs as a tool to create long term housing. While Green’s proposal is not going that far, it is likely that the state will bring forward the same measure from last year that aims to grant counties this control.

In the report it does say, “Currently, counties are prohibited from phasing out the zoning of non-conforming residential uses of single-family homes or duplexes. The counties have interpreted this to include a blanket prohibition on changing the zoning of STRs without allowing existing STRs to continue to operate through non-conforming use permits.”

Governor Green’s proposal isn’t available for review just yet. So far he has only announced it through the media. 

To Contact the Governor:

The Honorable Josh Green

Governor, State of Hawai‘i

Executive Chambers

State Capitol 

415 South Beretania St. 

Honolulu, Hawai‘i 96813

Phone: (808) 586-0034

Fax: (808) 586-0006

Email Governor Green

Instagram @govjoshgreen

To contact your state legislators visit: https://www.quorum.us/dashboard/external/kodetamkqmIeBqaRxXLB/

Mayor's STR RPT Tax Waiver Incentive

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:

https://maui.bluejeans.com/295235670

website: http://co.maui.hi.us/Archive.aspx?AMID=226

e-mail: countv.clerk@mauicountv.us

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/

Feel free to reach out to your County Council representatives via email or phone: 

• Alice.Lee@mauicounty.us, Council Chair, Phone: (808) 270-7760; 
• Yukilei.Sugimura@mauicounty.us, Vice-Chair, Phone: (808) 270-7939;
• Tasha.Kama@mauicounty.us , Presiding Officer Pro Tempore, Phone: (808) 270-5501;
• Thomas.Cook@mauicounty.us, Councilmember, Phone: (808) 270-7108;
• Gabe.Johnson@mauicounty.us, Councilmember, Phone: (808) 270-7768;
• Tamara.Paltin@mauicounty.us, Councilmember, Phone: (808) 270-5504;
• Keani.Rawlins@mauicounty.us, Councilmember, Phone: (808) 270-7678;
• Shane.Sinenci@mauicounty.us, Councilmember, Phone: (808) 270-7246;
• Nohe.Uu-Hodgins@mauicounty.us, Councilmember, Phone: (808) 270-5507;

Wildfire Disaster Recovery Group

We are forming a group of interested member owners, management teams and individuals interested in discussing topics related to the wildfire disaster and rebuilding. Please sign up below to be included in future emails and meetings.