Gov. Josh Green received a standing ovation at the state Capitol from legislators and visitors Monday following his second State of the State speech, which focused on Maui’s recovery, making life more affordable for everyone, housing and the need to reduce homelessness in an address that was routinely punctuated with applause.

During his nearly hourlong speech, Green also received applause after telling legislators from the House floor that he will issue a moratorium on short-term vacation rentals in West Maui if he does not get 3,000 property owners to voluntarily convert vacation rentals to long-term housing by March 1 in order to house 3,000 families that survived the Aug. 8 wildfires who continue to live in Maui hotels.

As of Friday, 1,367 owners of Maui short-term rental units had agreed to take advantage of a county property tax moratorium and above-market rents, Green told reporters after his speech.

After the Maui County Council agreed to temporarily waive property taxes for owners who convert their units for 18 months, Green said the number of property owners willing to house Maui families grew to 15, then 150 and over 600 before reaching Friday’s number.

Green sees converting short-term rentals to long-term units as the quickest and simplest way to fill the need for 50,000 affordable housing units across the state — and Maui as a way to test new ways to do it.

Currently, 52% of all short-term rentals are owned by nonresidents, and 27% own 20 or more units, Green said.

For Maui, Green told reporters, “I hope we overshoot and have too many offers of housing” to meet the March 1 deadline.

“Then I will become a mellow governor again,” he said.

In his speech, Green said there are 27,000 short-term rental units on Maui alone.

“We have to take further action to return the thousands of short-term rentals to the local housing market,” he said.

For Hawaii’s long-term housing needs, Green said, “I feel that if even just 20% of the short-term rentals out there over two years sold into our market, you’re talking about tens of thousands of new homes for local people.”

If not, Green said his future approach to change short-term vacation rentals into long-term housing for Hawaii families will be “onerous,” especially for short-term property owners who live out of state.

He told legislators: “I am calling on my colleagues at the Legislature to help us by implementing new policies and reforms which will return housing units to the long-term rental market for our people. This will increase supply and bring down prices in a local market artificially and unfairly inflated by the global demand from visitors to our state.

“I will sign into law any bill the Legislature sends to me that will help move short-term rentals and vacant investment properties owned by nonresidents into our local housing market. This will increase supply and bring down prices for our families,” he said to more applause.

Green also plans to introduce “landmark” legislation to provide a “tax amnesty to any owner of a short-term rental who chooses to sell it to help us with our housing crisis.

“A sale of this kind — to an ‘owner-occupier’ local family or to someone who turns the home into a long-term rental for a local family — will be exempted from capital gains tax, conveyance tax and general excise tax. This ‘House Hawaii’s Ohana’ plan would start this fall and last 24 months.

“During this tax amnesty period, I’ll personally encourage short-term rental owners from around the world to sell their properties back to Hawaii families,” Green said to further applause.

The State of the State speech included Green’s approaches to serious issues that are driving away local residents to more affordable places, such as Las Vegas.

But the speech began on a light note when House Speaker Scott Saiki continued his back-and-forth banter with his former longtime House ally Sylvia Luke, whose family emigrated from South Korea when she was a child, when she did not speak English.

Saiki introduced now- Lt. Gov. Luke before Green’s speech by calling her Kim Yo Jong, the sister of Kim Jong Un, North Korea’s supreme leader, before correcting himself to laughter from the audience.

Saiki later told reporters, “There’s some resemblance, some similarities there.”

He was surrounded by House leaders who said they agree with Green’s goals, but there may be different tactics that will be debated during the legislative session, including the best way to charge tourists a special fee to both offset their impact on Hawaii’s fragile environment and what Green believes will help deter visitors as arrival numbers continue to creep up to a pre-COVID-19 record level of over 10 million tourists annually.

Like Green’s so-called “climate impact fee” for tourists, many of Green’s ideas on generating more affordable housing, reducing homelessness, addressing mental health and helping low-income families are similar to what’s in the House Democrats’ bill package, said House Majority Leader Nadine Nakamura (D, Hanalei-Princeville-Kapaa).

Green’s speech began on a somber note, reflecting on the Aug. 8 Maui wildfires, which killed at least 100 people and will take residents years to recover from.

“Today I am here to report that although we have faced great challenges and suffered even greater loss over the past year, we have come together as one ohana to recover and to heal,” Green said.

“I am here to report that the state of Hawaii is strong,” he said to applause.

“Words cannot adequately describe the devastation caused by the fires, and it scorched thousands of acres and destroyed nearly all of Lahaina,” Green said.

Legislators and visitors gave a standing ovation after Green said:

“Two of the brave Maui firefighters are with us today: Keahi Ho and Koa Bonnell. Please stand so we can recognize you and all of your fellow firefighters who put yourselves in harm’s way to save others. … These men and women knew what they were facing when they went into the fire. Many knew their own homes would be destroyed, and some didn’t know if their family was safe, but they went in anyway.”

Much of Green’s speech focused on financial relief for island residents, often at the expense of tourists and out-of-state property owners.

“Despite working multiple jobs, more are living paycheck to paycheck than before the pandemic,” Green said.

Some 44% of all Hawaii families are considered “asset-limited, income- constrained, employed” and are “barely getting by — and 63% of all Hawaiian families fall into this category,” he said. “This has to change.

“We must find additional ways to reduce the cost of housing, food and health care, and make Hawaii more affordable for all of our people,” Green said to more applause.

In 2023 the Legislature passed the first phase of his plan to provide $104 million in direct income tax relief to Hawaii’s so-called ALICE families.

This year Green wants to double Hawaii’s earned income tax credit and food tax credit, worth more than $87 million annually, “so that working families with keiki can afford to live in Hawaii and our next generation can have a future here.”

State Sen. Kurt Fevella (R, Ewa Beach-Ocean Pointe- Iroquois Point) — one of the Senate’s two Republicans — then walked out after Green said to applause that he wants to index the state tax code to provide all taxpayers relief from inflation, which Green called “a long-overdue change which will help people in every tax bracket.”

On Monday, Green proposed a $25 fee on visitors “when they arrive and check into a hotel or short-term rental. This modest fee — far less than the resort fees or other taxes visitors have paid for years — will generate more than $68 million every year from visitors.”

Green also remains open to any other ideas from the Legislature to generate fees from tourism to address climate change, including raising or altering the transit accommodations, or hotel, tax, aimed at tourists.

“This responsibility to protect Hawaii’s unique natural environment should extend to visitors to our islands,” Green said.