Rent control might be needed as Maui landlords continue to demand more money for limited housing to accommodate survivors of the Aug. 8 wildfires, according to officials with the Council for Native Hawaiian Advancement who say victims might need to consider moving off-island for a year or more.

Some 1,100 households — or 2,768 individual evacuees — were still living in 11 Maui hotels as of Friday.

The number of survivors still housed in hotels fell from the original 3,000 families — or 7,796 individuals — who were initially housed in 40 hotels.

To get survivors into longer-term housing, CNHA has helped pay to cover the difference in rent between what the Federal Emergency Management Agency will pay and about $2,000 more that landlords typically want.

“It’s not sustainable,” CNHA CEO Kuhio Lewis told the Honolulu Star-Advertiser. “We’re only putting a Band-Aid. Hundreds of millions of dollars are better spent building than paying these ridiculous rates for a limited time.”

Most families want to remain in West Maui to be closer to jobs and schools, which might be difficult given the limited supply of affordable housing.

Serious discussions need to happen about moving families to other islands, where rents are still high but closer to what survivors can pay, Lewis said.

“Families can afford $1,500 but rents (on Maui) are as high as $6,000, $7,000,” Lewis said.

So far, CNHA has helped relocate six Maui families to Hawaii island and four more to Oahu but more need to consider moving, Lewis said.

There are fewer listings for vacation rentals on sites like Craigslist since the devastating fires because landlords can make more through a temporary county property tax moratorium combined with higher rental rates by renting to fire survivors, Lewis said.

“It’s a mess,” he said. “There just aren’t enough housing options on Maui. People have to consider moving to Oahu or another island.”

Rents skyrocket

Matt Jachowski, CNHA’s director of data, technology and innovation, has been crunching housing data to compare before and after the fires.

The disaster only exacerbated Maui’s shortage of affordable housing by destroying or leaving unlivable some 3,900 units — including several that contained multiple families.

“We lost a whole town,” Jachowski said. “You have no chance of living in West Maui without FEMA. You’re talking about multi-generational homes where rent was lower so you lost all of the low-income housing.”

Converting vacation rentals into longer leases of a year or more has been the focus of Gov. Josh Green, Maui Mayor Richard Bissen and the County Council to get survivors out of hotels but, Lewis said, “We’re just paying too much for short-term rentals.”

“Families really need to be told what their options are,” he said. “Their options need to include temporarily moving off-island because there’s just not enough inventory that anyone can afford.”

Before the fires, survivors told CNHA they were paying a median price of $1,200 a month for a one-bedroom unit and can only afford $1,200.

At the same time, landlords are now asking $5,000 a month for a one-bedroom unit and FEMA will provide up to $4,476; people in two-bedroom units were paying about $1,500 a month while owners now want $6,000 a month, with FEMA providing $5,476; and families in three-bedroom units paid a median rent of $1,500 but landlords now want $7,000 a month.

Through private and nonprofit donations, CNHA helps cover “gap” funding between what landlords want and what FEMA will cover.

To encourage owners of Maui’s estimated 31,000 vacation rentals — some of them illegal — Maui County in December exempted them from having to pay county property taxes as long as they rent to survivors for a year or more.

Owners of illegal vacation rentals could face an initial fine of $1,000 along with daily fines of up to $1,000 a day, according to Maui County.

So far, owners of 1,339 vacation units — or fewer than half of the 3,000 units needed — have rented to fire survivors, saving owners an average of more than $8,700 in property taxes.

Overall, Maui County projects that it will lose over $1.1 billion in property tax revenue by exempting short-term vacation rental owners from having to pay property taxes.

New legislation

On Tuesday at the Legislature, the full House voted to keep alive the latest version of Senate Bill 2919, which would give Maui and all Hawaii counties the power to phase out so-called “transient vacation rental units.”

The vote followed sometimes spirited — and contradictory — debate and was opposed by five of the six House Republicans.

Rep. Elijah Pierick, (R, Royal Kunia-Waipahu-Honouliuli), voted against SB 2919 and told House colleagues that Hawaii’s short-term rental industry pumps $6 billion into the economy and pays salaries for 48,000 jobs.

Vacation rentals, Pierick said, are “mostly owned by local residents.”

But Rep. Luke Evslin, (D, Wailua-Lihue), who chairs the House Housing Committee, voted in support and said transient accommodations tax data shows that less than 20% of vacation rentals are owned by local residents.

“The primary beneficiaries of vacation rentals in Hawaii are mainland investors,” Evslin said. “That needs to end.”

During previous testimony over SB 2919, Rep. Daniel Holt, (D, Sand Island-Iwilei-Chinatown), showed that 27% of vacation rental owners own 20 or more units, he said Tuesday during the House floor session.

“I don’t think that is what we would like in our state,” he said.

Rep. Sean Quinlan, (D, Waialua-Haleiwa-Punaluu), chairs the House Tourism Committee and expressed “strong support” for SB 2919 and said, “I will never understand why we spend so much time in this building worrying about people that have at least two homes. Isn’t our job as legislators to worry about people who have no homes?”

Since the fires, some fire survivors living on month-to-month leases — or with no leases at all — have been evicted so landlords can take advantage of the property tax moratorium combined with FEMA payments, Lewis said.

In February, according to the state Department of Business, Economic Development and Tourism, there were more than 19% more rental units in Lahaina and Kaanapali than February 2023 — or 83,976 compared to 70,381.

During the same period, occupancy fell nearly 12%, according to DBEDT, along with a drop in daily rates from $568 in February 2023 to $547 last February.

Pivot to prefab units

While Green, Bissen and FEMA continue to look for longer-term housing for evacuees still living in hotels, Lewis said CNHA has pivoted to building longer-term, two-bedroom, 700-square-foot housing units in the form of new prefabricated homes that it plans to ship in from the mainland.

CNHA plans to unveil the first 16 of 34 units later this month in Central Maui on county land in Kahului that already has water, sewage and power.

The Maui Lani project would appeal to families or individuals willing to move out of West Maui, Lewis said.

Then CNHA plans to open another 16 two-bedroom, prefab units in Lahaina in the summer.

Rents would be anywhere from $2,000 to $2,400 per month to house 50 families that survived the fires, or over 100 people.

Green had threatened bans on Maui short-term rentals and then specifically a ban on short-term rentals in West Maui beginning April 1 if he did not get enough owners to rent to Maui fire survivors.

Even though fewer than half of the desired 3,000 vacation property owners converted, Green said a ban won’t be necessary.

But Lewis said vacation rental conversions won’t solve Maui’s long-term shortage of affordable properties.

With an estimated 30% of Maui’s housing inventory tied up by vacation rentals and second homes, Lewis said Maui “has become an investor’s paradise and we need to change that. (Before the fires exacerbated Maui’s housing crisis) none of us knew it was that bad. It’s a complete mess.”