The Maui County Council on Tuesday approved Mayor Richard Bissen’s proposal to offer a substantial tax break to homeowners who convert their short-term rentals into long-term housing for those displaced by the Aug. 8 wildfires.

The Council, with three members excused, voted 6-0 to approve Bill 131 on first reading with clarifying amendments and minor changes. The bill requires a second vote before it can be enacted.

Bissen, who spoke to the Council at the top of the meeting, said he faces the daunting prospect of finding 2,700 homes for families from a Maui inventory of 13,800 short-term rentals, 2,500 timeshare units and 16,000 nonowner-occupied units.

“Many of these sit empty, and we are encouraged that we can meet our goal,” he said.

The mayor acknowledged that short-term rental owners will lose money in the deal.

“But what they will be gaining is much more. And what the whole community gains,” Bissen said, adding that it’s part of a “shared sacrifice” needed for the good of the community.

Also part of Bissen’s proposal for “shared sacrifice” is a plan to increase property taxes for short-term vacation rentals, timeshare units and nonowner-­occupied properties valued at over $1 million that do not sign up for the tax break program.

That proposal, he said, was not on the table Tuesday because the tax rates already have been set for the year.

As for Bill 131, it was embraced by most of the dozens of testifiers who spoke at the Council’s special meeting, including those who spoke in the Wailuku Council chambers and those who gave their testimony online.

More than 1,000 pages of written testimony also was submitted on the bill.

Fire survivor Shannon I‘i was among those who appeared in the chambers, calling the bill a “step in the right direction,” but she added that it is past due.

“I’m requesting a sense of urgency in all matters pertaining to the Lahaina and Kula fires. Things that should have been proposed yesterday are a few months too late. But yet here we are,” I‘i said.

West Maui resident Gretchen Losano praised the proposal.

“This is an amazing deal for anybody. Can you imagine being against this? The tax exemptions for the whole year — just to persuade people to help their community,” Losano said.

“To the people who are against this, shame on you. Shame on you for having assets in a small community and not wanting to help. Shame on you, because it’s such a privilege and honor to be part of this community,” she said.

Matt Jachowski encouraged the Council to approve the bill. He started the website Maui Hale Match to specifically help displaced families connect with landlords in the wake of the fires.

Since launching the site, nearly 1,000 families have signed up looking for housing, but fewer than 100 landlords have signed up, with nearly all of them being locals with ohana units, spare rooms and preexisting long-term rentals.

“There have been almost no short-term rental or second-home owners who have offered their homes through the site,” Jachowski said.

Several vacation rental owners said they were being unfairly painted as the bad guys.

After being a teacher and owning a business that got shut down by the COVID-19 pandemic, Eve Hogan of Kula said she and her husband bought a property that was used for drug dealing and transformed it into a short- and long-term rental. She said they took in a family of four displaced by the fire.

“We are not heartless,” Hogan said.

One of the problems with the bill, she said, is that the deadline to sign up is Jan. 1.

“I have six months of agreements. My integrity to people who are coming here” is on the line, she said.

Realtor Clint Hanson urged the Council to target the large hotels so they can pay their fair share of the tax burden. He said many of the hotels pull in a massive amount of resources, yet they do not reinvest in the community the same way many condo owners do.

“The hotels need to also have the opportunities, as well as the penalties, associated with these increases and decreases in taxes,” Hanson said.

Council members who attended the five-hour-plus-long meeting didn’t offer many comments for or against, as they were rushing to maintain a quorum.

During his time to speak to the Council, Bissen took a moment to talk directly to the short-term rental owners, saying it was time for them to “step up” and “kokua” in making their units available to the families affected by the fire.

“Those who choose to participate will benefit from a 100% real property tax exemption and the assurance of a long-term renter,” he said. “With an average short-term booking rate of approximately 70% in Hawaii, and especially given the reduction of bookings in West Maui due to this disaster, this incentive will provide owners with a guaranteed income on a year-to-year basis, paired with savings from cleaning and booking fees that are often associated with vacation rentals.”

Bissen said he’s read his mail since he announced the proposal last week. He said short-term rental owners, among other things, are concerned about how to pay for damage to their properties if there are occupants who don’t have to put down a deposit.

Bissen said the county and its partners intend to set up a fund to ensure that damage can be taken care of.

Bissen also said rental owners are wondering how they compete with illegal short-term rental landlords.

“That’s something for another day,” he told Council members. “A robust discussion will have to take place about that.”

In related news, Council Chair Alice Lee announced Tuesday that the panel will consider a bill Dec. 15 to establish criteria for the recently approved ‘Ohana Assistance Pilot Program, which offers grants of up to $100,000 to build an accessory dwelling or second farm dwelling for residents’ long-term occupancy.

The current zoning code allows one accessory dwelling, or ohana, unit on all residential lots regardless of size and two accessory dwelling units on lots of at least 7,500 square feet.

“We need housing now more than ever, and the new ‘Ohana Assistance Program is an effort to make additional housing more attainable,” Lee said in a news release.