Maui’s vacation rental ban has ignited fierce debate, with locals and visitors weighing in on the island’s housing crisis, tourism dependency, and government missteps. While some believe the ban could alleviate housing shortages, others see it as a misguided policy that risks damaging the economy without providing any meaningful solutions for residents.
Get Breaking Hawaii Travel News
My experiences are on big island, but I think this suggestion is also appropriate for Maui. The rental car companies take a big chunk of change from tourists. The state could grab “much” of that money and help the locals at the same time.
That is “socialize the road”. Charge visitors a daily fee to visit for
any stay under a month…. that fee would go entirely to increasing public transportation. Presumably you could charge some fair fraction of a rental car cost, and use that fee to pay for more public transportation.
The locals would get free rides, if young enough, old enough or means tested and the tourist money could build out a bus/van fleet, that would take pressure off of parking and the roads.
I know reducing the use of cars is un-American.. but making the roads more bikeable and walkable, and using solar power on e-busses could make Hawaii for relaxed for all.
Butterflies and rainbows. There is a zillion dollars that Hawaii makes on taxes, tourism, income and property taxes. You might want to ask: where does that money go and who is wasting it?
Sounds like you’re asking “where does the get go?”
Maui County needs to focus on permitting affordable housing for local residents. Going after the STR locations will not solve the cost of housing in Maui. It will have an unfavorable impact on the businesses and jobs that are focused on tourism.
As the article and many of the comments have noted, the STRs are not going to be affordable for local residents. I suspect that Maui will become a seasonal snow-bird location. And, the owners of the STRs and the businesses that support these STRs that are to be converted will incur financial losses.
My family has vacationed in Hawaii since the mid 1990s. Our primary location has been Maui. I am too old to change and I plan to continue to visit Maui and the other islands in Hawaii in the future but my children and their families have decided to go to other locations based on what appears to be a growing sentiment against tourism in Maui.
Instead of keeping tourists out of the most beautiful place on earth, make tourists pay more for it. Raise sales tax for tourists to lower sales tax for full time residents.Raise the occupancy and property tax on vacation rentals so property taxes can be low for homes of full time residents below a certain income level. Make developers pay for more infrastructure and for every acre of land developed, purchase and donate 3 acres of land in areas zoned for affordable local housing. Increase taxes on flights and rental cars to go towards acquiring and developing land for affordable local housing. Require utility companies to charge less for full time residents and more for hotels and vacation rentals. Your paradise is you most valuable resource-use it improve the quality of life for the people who live and work there.
We have been to Maui 4 times. We stayed in the Kanipalua area. I it was best vacation we have ever had. Hopefully with all of the changes the government doesn’t kill the area to visitors. There is absolutely not one negative I can think of about this area.
I lived on Maui for 5 years. My home was in Kahana and our business was in Napili. The devastation of Lahana made me heartsick for the businesses but especially for the local people. Maui is a very special place. The very Last thing would be to turn it into a Florida-like snowbird escape. Let the people most affected by the fire make the final decision as to Lahaina’s future. They deserve No Less!!! Restricting vacation rentals will kill Maui’s tourism which will devastate local businesses almost as much as the fire did. It’s totally short sided. If the governments involved want to help, they must subsidize affordable housing on the island. Maui may never be the same, but it Can be made better for the people of Maui…keep the politicans and rich land developers as far away as possible. This is an opportunity to enrich Maui…not turn it into a plastic retirement community for the wealthy.
Why not tie STR ownership to affordable housing with some sort of assessment based on value. Yes, STR owners will scream about being taxed – but the money to support affordable housing has to come from something that doesn’t kill the economy that the locals survive on. So an investor gets hammered for the privilege of owning STR ,,,, seems pretty fair to me.
Most Airbnb’s are run by people just looking for ways to make ends meet. I’m a 66 year old woman, and being a host is the first time in my life that I’ve been paid as well as a man, and it’s also the first time in my life that I’m able to travel. Airbnb’s are severely taxed already. I am paying the same tax rate that a hotel charges guests, and yet it’s coming out of my pocket, whereas the hotel passes the charge on to their guest. More, I’m not a hotel. The government is responsible for building affordable housing, not small mom and pop businesses. This issue that affordable housing is linked to STVRs is just propaganda put out by the hotels. And since they’ve got loads of money, the myth is working.
The typical rent at present is 2800 a month, for this example, and the owner knows that they will have to pay 40% just because the government stepped in. That is before regular taxes. So they increase the rent to 5200 a month to make up for the government tax. Now, less chance of you renting the property by that type of government intervention. Government doesn’t cure or heal, they only Spend on really stupid things and Tax those that they know have something to lose if they don’t pay!
We visit Hawaii, mostly Maui, almost every year. I’ve done the math on buying STR and non-STR condos in the tourist areas. A rentable condo near the beach sells for roughly 50% to 70% more than a non-rentable condo in the same area. This price difference is entirely due to the rental income. If you take away the STR rights on a $1 million condo, it would likely sell for around $600,000 to $700,000, which is still not affordable for most working Maui families. But it would be affordable for a lot of retirees from the US western states who are the most likely to buy.
I own a stvr capable condo just across the road from a beach on big island, kailua-kona. Condos with an stvr permit and only a little more
expensive than those that don’t allow short term rentals. The only condos that are at a premium in my building are the few with best views. The problem with moving full time into a condo in a “resort zone” is that you get a different tourist on the floor above every other week. Typically they let their kids run around thumping above your head, you only have one parking spot and limited closet space.
It’s also off putting to have people coming and going all the time, and to have no real neighbors. So i wouldn’t recommend buying in a resort that allows stvr if you intend to live their full time.
I think Maui government needs to get real about how much they have undercharged local property tax payers by levying huge taxes against short term rentals to pay for a significant amount of the budget. An honest ( and unlikely) solution would be to use the tax revenues from STR’s to fund the building of quality rental apartments for low and moderate income earners. This would require the government to become smaller which is why I said it was unlikely as many locals also benefit from these government jobs which are funded by tourism. STR taxes are a major source of this tourist funding and the loss of the STR’s also means that fewer moderate income tourists will come and only tourists who can afford the extremely high hotel prices will come to Maui and this will cut out a huge potential number of tourists to the islands.
Look at the State Government for most, or all, of the funds. Matching funding even. The State takes in plenty, forcing them to build Affordable Housing and such is the best way.
in 1970 when I went to Maui, there was one stoplight on the island in Wailuku. It shut off at 4:30 PM every day because there was no more traffic to direct. We camped in a field where Kapalua is now. There were no resorts other than Kaanapali. All the locals had housing, most worked in sugar and pineapple industries. As those closed the workers and later their children became employed by the new tourist resorts. The government and big business overbuilt a tourist industry requiring the need of thousands of new workers. Before the locals in the 70’s and 80’s had housing and it was affordable. Let the big corporations who created the problem and need workers, and affordable housing, solve the problem they created.
The problems of Maui are unique in some ways however they really mirror the affordability issues that present issues for the entire country. Combinations of a large cohort of boomers replete with tons of cash, decades of low interest rate policy, left wing land use restrictions that have slowed down building, search for yield vs a dangerous stock market and water issues all have resulted in the situation Maui finds itself. The piece correctly identifies the issue that will result from banning short-term rentals. If they do enter the market from a STR ban they’ll be purchased quickly by people moving there or second homeowners. Locals simply cannot afford beachfront living. Low paid locals don’t stand a chance. The only real possibility is enacting land use restrictions that are frankly un-American and are racially unjust. No easy solutions and none that will have a lasting fair impact long term.
Maui will never become a retiree destination to the scale of Florida for several reaso6ns. Chief among them: too far from kids & grand-kids and cost of living, not to mention medical care
sub-par to mainland standards.
All the arguments stacked together in favor of VRBO/AirBnBs pale in comparison to the sad reality of local families forced to leave their beloved Hawai’i due to non-existent affordable work-force housing.
This is clearly a fluff piece with vested interest in favor of [mostly] non-resident home and condo owners here in Maui continuing to enrich themselves from renting their properties by the week rather than reverting to leasing by the year.
Many municipalities on the mainland have banned short-term rentals because they’ve realized it was bad for the housing eco-system.
Let’s call it what it is, shall we? A failed experiment.
The greater good of any community should always supercede the coffers of investors.
I vacation in Florida where my sister has a “snow bird” mobile home. Her community (Venice) has enacted a limit on STR. That being said, I don’t think there’s much of a comparison. Many FL snowbirds have mobile homes or RVs. The majority aren’t comparable to the uber-rich who can afford a second home in Hawaii.
It makes sense to me that Hawaii should view tourism as their natural resources and treat it like Alaska treats oil. That is they should maximize the revenue and tourist taxes and pass some of that revenue along to the residents in the form of a dividend check. Designate residential areas as no STRs for residents to live and then encourage the building of as many STRs you can in areas you want the tourists to go and spend money. The way Hawaii is doing this ban on STRs is short sited and will backfire spectacularly. This idea ignores free market principles that our economy is based on.
Was there before years ago, thought we would go back. Then looked at all the building restrictions. Thought, No.
The old Maui/Lahani is not there. The wooden buildings, walking around, Fleetwoods is all gone.
We are so glad we got to enjoy the downtown before it vanished.
I bought an acre+ lot on the big island, and a foreclosure condo across from the beach so i would have a place to live while i developed the land. After 6 years, my business went bad, so when
I stay in hawaii, i can’t afford the local restaurants and spend almost no money except at big box stores.
I’m going to sell all, not because of anything to do with tourism. The properties valuations and taxes have doubled, and I need to reduce my costs to retire. Where i live on the mainland, the cold times during the year are shrinking fast so I will live on the mainland, and can simply vacation for the two or three really cold months in the year.
My daughter and her family live Maui. My wife and I were lucky enough to live on Oahu for a few years with a job transfer and before I retired. We wanted to be closer so we could bond with the grandkids. We never felt and did’nt want to retire there. We live in the upper midwest so our winters are long. It is very wonderful to have family on Maui. Now to the issue at hand. Affordable housing for locals. I am 100% for that and think the state and federal government should be making it happen with financial incentives to builders and potential Local buyers. why can the federal gov. send billions abroad before addressing local needs? The other part of this article about snowbirds and somehow controlling those who already own condos and such, seems misguided to me. I have used airbnb,vrbo for years and have always tried to be aware and contribute to local business. County, state, federal government come together with the proper economic incentives to fix this housing for locals problem.
Oh my goodness Maui my father’s ancestors owned part of the Aina before the over throw of our Queen Lilukaulani and my ppl are still grieving over the fire in Lahaina when does the land grab stop for my ppl we still have missing keikeis 500 of them to be exact and now you talk story of Maui might be the new Florida you all think da kanakas maoli going to want this I live on the mainland and even still being kanaka maoli haven’t the kingdom of Hawai’i and her ppl gone through enough my heart still grieves for my ppl the kapunas unkos da keikeis let us be
Maui will not be the next Florida. Property and income taxes are way too high in Maui. Non-rented, owner occupied, property tax rates are strospheric, as are income taxes. People moved to Florida to escape the high tax regimes in NY, Connecticut and elsewhere. Hawaii, while beautiful, is slowly strangling the golden economic goose. Solution: lower non-rented homes and non-rented condos property tax rates. These owners are the perfect tourists! They employ Mauians year round, use their properties a few months, maybe 6 at most, put far less pressure on Island resources like schools, roads and water, but are now taxed at 3x the rate of a few years ago. A wave of selling is coming. Values will drop and all related revenues to the Island will drop with them. So short sighted.
It’s worth noting that the housing crisis started in the early 2000’s. VRBO became mainstream around that time as well, and has steadily increased since, especially around 2008/2009- which was when people were having to foreclose on their houses due to the home loan schemes. This left the market, especially in Hawaii, easy to buy up extra properties at low prices for those who had capital to do so. There needs to be balance. Hawaii did just fine before people were renting out the majority of residential housing on the island to mainlanders. The government and people who own multiple homes have become greedy (sorry). You can’t say you are supporting local by providing them housekeeping and landscaping jobs when those locals can’t afford their own home while they clean yours so you can make a profit.
If you haven’t watched “The Big Short” yet, you should. It’s all about the housing loan scheme on the 2000’s. Aloha!
Another great balanced article from you guys showing the pros and cons of what could happen. But I think you hit the nail on the head when you said “Prioritizing local family’s over retirees and second home buyers”
It appears the government has done things to target tourist, and non residents who have purchased homes in Hawaii. Like we are the reason for the housing problem. Seems like it would be easier to build affordable homes for local family’s than converting million dollar properties into available units for sale.
I agree with you. Building affordable housing is the only solution to the housing crisis.
Just to be precise..my wife and I spend three winter months a year in Maui.
Part time in rental condo and part time in rented single family house. We rent a right priced convertible car and eat around 70 meals at some the better restaurants.
We used the Lahaina Aquatic Center pool when open.
Here’s the feedback from some 35 consecutive yrs visitors..the pool water quality is terrific while the restrooms are generally near filthy and without hot water.
The Maui County government appears broken and irresponsible.
The Kicker is that including airfare we spend roughly
$1,000 per day for three months.
We’re creatures of habit and frankly the provided services be it a lack of handicapped parking or public facility maintenance is embarrassingly bad and that before the considerable cost.
As mentioned by several commenters, the direct result of banning STRs will be fewer tourists / less revenue to local businesses / lower tax revenue to the county. The result will not be lower housing costs for locals. When the plan was first announced by the mayor many people said it was a good idea because other cities were doing the same thing and they were certain it would solve the housing cost crisis. But reports from NYC, Barcelona, Edinburgh, etc. show clearly that bans have not led to lower housing costs. It is absolutely correct that locals need a solution to housing costs, but an STR ban will not achieve that objective. It will hammer the economy, punish local businesses, and bankrupt the county … but it won’t lower housing costs.
If not for STRs on steroids. These units would be long term rentals units for the local working people of Maui. Rent control should also be considered, so if STRs are limited/reduced the owners can’t make LT rentals unaffordable.
Most of the STR’s that are on, “The List,” will not solve problems for housing for locals. If a small condo owner has to sell, as they can’t afford it due to not being able to rent it part of the time. Someone will purchase it and either keep it for their family to utilize or try and rent it out for a long term lease. Many of the condo’s aren’t suitable for a local family. Too small, not enough closet or storage space, etc. Banning STR’s will do nothing except to hurt the local economy. Maui government needs to look in the mirror & ask what have I done to create affordable housing for locals? The answer is, ” Nothing.”
I own a timeshare on Maui and have been there many times–more than 10 times in the last 15 years. I have no opinion on the STR issue, however, it is apparent that Maui (and probably Hawaii in general) needs to spend a significant amount of money on modernizing infrastructure. Burying power lines, for example, so they don’t spark and start fires. Finding new sources of fresh water. Adding more renewable energy sources, especially solar. Expanding roads into West Maui in particular. If I were the government, I’d also press for new developments to be “green-certified,” so they do not waste resources but add value to the overall environment. Generate as much of their own electricity as possible. I’d also pass a law that abandoned buildings need to be razed, which eliminates blight and beautifies the community and provides land for better, modern, eco-sustainable development.
I was born on the east coast of the mainland but have lived all over the country. I commute between two places, Airbnbing one when staying at the other. I discovered Hawaii in 2016 and have been coming for 4 month stays ever since. My dream is to drop one of my homes on the mainland so I can commute between Hawaii and the other place. I’m 66. I vet my guests well, so I’ve never had a problem with them disturbing my neighbors. I pay $50 hourly to my housekeepers, gardeners and handymen. My guests purchase locally. Banning STVRs would financially hurt the people in my employ. The housekeepers alone would have to go back to working minimum wage at a hotel. There is a housing crisis across the United States. Given that STVRs make up Less Than 1% of all housing in America, they are not the cause of the crisis. This myth is propagated by the hotel lobby. How about we go back to honoring mom and pop businesses?
The “people” you employ will never be able to own a home of their own. They have no benefits or retirement plans. They live paycheck to paycheck. They can never achieve the American dream.
They are the modern equivalent of peasants, doomed to toil for you.
Time to force all investor and corporate homes to be sold.
To your response: The “people” you employ will never be able to own a home of their own.
Reply: Except that they do! Everything you stated is the exact opposite of truth. The people I employ own their own homes. They are getting paid significantly more than minimum wage, which is why they can. It’s the minimum wage workers who cannot afford a home. And BTW: I am not an investor. I’m just a lowly woman who likes living in two places. STVR is the FIRST time in my life that I have been paid as well as a man, so there’s that too.
Your facts of less than 1% STVR are not correct for Hawaii.
Estimates of Hawaii STVR range from 7 to 20%.
That does not include the many foreign and investor owned houses that are long term rentals.
“Never” disturbing neighbors and only hiring those who own homes doesn’t apply to the vast majority of STVR situations.
A house cleaner working 6 hours at $50 an hour every weekend or two is certainly not buying any home in Hawaii.
It all depends on where you get your facts, Rob. The hotel lobby propaganda or sites that track housing. My husband works to make affordable housing available, so I’m going with his numbers. The people in my employ do not work only on weekends. They work 40 hour weeks, or more if they choose. If we all paid people a living wage, people could afford a home. I’m doing my part, and I’d like to be able to continue.
Oh the irony.
Your hubby is in the affordable housing gig while you rationalize that your STVR is good for Hawaiians.
Please read the concise and intelligent post above by SonjaD. Her summary of the plight of housekeepers and landscapers who clean STVR properties is spot on.
Florida welcomes snowbirds Maui doesn’t want tourist or snowbirds and they make it very clear. You would have to like the vetbal abuse that come with going to Maui to make it a destination
Enough already. You’ve got to stop flogging a dead horse. We’ve heard and understand what Maui wants. Let’s do a 1 or 2 year trial. Make Maui off limits for visitors and ban off-island buying of real estate. After the trial period, let’s see what Maui wants then.
Affordable housing for locals seems to be the best option to aliviate the housing crisis on Maui and to keep STRs available for tourists. The question is will the state and local governments of Hawaii cooperate?
“Affordable housing” is a buzz word. Because affordable is in the eye of the beholder and is based on the actual cost of living of the area it’s in. For example, CA has a lot of “affordable housing” and it also has “low income housing”. Affordable housing in San Fran is around $3,500 a month. Affordable housing in Sacramento area is around $2,200 a month. In Hawaii “affordable housing” would be higher than what most people can actually afford and would be all high rises, block buildings with little to no amenities because it’s super expensive to build. What people really want to say is low income housing- this will ensure locals clean everyone’s profitable air b n b’s, while they “get” to live 6 people to a 2 bedroom apartment. They don’t get the American dream but you know who does? 😉
We own a condo in Poipu, Kauai. For over 20+ years it was a STR.
Recently we terminated the STR and have become Kauai residents, spending 183 days/year there.
We know others who have done the same.
Could the Maui housing situation occur on Kauai?
Interesting comparisons of ownership of HI real estate: I note the changes over the years in timeshare “ownership” and am thankful that I acquired our 3 timeshares (one on Kaua’i and two on Maui) when they were secured with warranty deeds, not the current “point schemes”. Jim E
Another problem that may arise: We get cards and phone calls at least weekly from companies (often out of the country) who want to buy my house (it’s not for sale). They buy “as is” and offer top dollar. They are not buying these houses to renovate and/or sell, but to rent out. When they have control of enough of the market in an area, they start pushing up prices in the area, eventually the price increases spill over into apartments. Because of this the value of my house, which remained fairly stable for over 30 years, has doubled in just 3-4 years.
I’ll help, since Maui’s politicians here operate on feelings & not facts;
1] Land Value Taxation (LVT) as it encourages landowners to develop or sell underutilized land rather than holding it for speculative gains
2] Incentivize building on Community Land Trusts (CLT’s) to keep land in perpetuity to build on, as homeowners own the home only, not the land
3] Buy-Back Programs for Existing Short-Term Rentals NOT bans. Turn into affordable housing & owner occupied tax rates
4] Short-Term Rental (STR) Credits, introduce a credit system for short-term rentals, where owners must buy credits to operate. A limited number of credits could be allocated based on community needs, w/ a % reserved for local residents.
5] “Empty Home” Tax: Impose a tax on properties that remain unoccupied for a significant portion of the year, targeting seasonal & second-home owners.
Bonus: Resident-Only Housing Zones; implement zoning laws that designate certain areas for local, full-time residents only.
Follow the money.. STR create jobs for the locals and they pay their workers well $30+ per hour and the owners pay big taxes 18%. The ban on STR will put folks out of work. The guest who stay at the STR spend their money 💰 in the local businesses. Why would the Country want to lose the tax money and tourists spending money and put the workers out of a job. Use the tax money to build housing for the locals. 18% is a lot of 💰 . Where does that money go?
This is a very difficult issue.. one that is not sorted out easily.. Even if STRs are completely eliminated.. if future tourism growth is stunted, if hotel development is slowed or stopped, you have a new dilemma.. Tourism will be down, businesses cease to operate.. fewer jobs..
Then.. will properties maintain their value? Current owners will not be happy knocking one or two hundred thousand off the value of their retirement next egg.. (biggest asset in many cases).. OR if mainlanders buy up the property for a second residence but only use it sparingly.. what a loss for the local residents..
It would be prudent for the state.. to find a way to make affordable housing available without ransacking their tourism industry.. what is to replace that revenue?.. can residents afford to make up for the lost taxes and revenue? Will they be able to afford it?
The governor, mayors and state, best think long and hard before going forward without a very good plan!!
Charging Turists and preventing renting on the beaches of Maui it’s not gonna help any local people people because they can’t afford those properties anyway and most of them are timeshares and the Timeshare people come there and the tourist come there and they spend money with the local economy, which helps Maui if you take that away you are hurting the local economy. The government of Maui doesn’t know what they’re doing. They have quick solutions to problems that they don’t understand and there’s repercussions that they just don’t get.
The tax fee on a rental property goes to the government and that’s definitely not helping local people and the fire was definitely the fault of the stupid people who are running the Maui government and They should step down
The fact is the STRs currently identified for non-rental, such as Kapalua Golf Villas or even Eldorado, will never drop in price to the point of being affordable to locals. If prices drop due to rental bans, people like me will buy condos for personal use at a higher price point than locals. As the article suggests, this is a worse scenario than the present situation. I will let friends and family use my condo but it won’t have the traffic a rental would. What is needed is new purpose-built apartments and condos, rather than converting these high-end resort condos.
Again…I don’t hear anything about housing for local people.
If the objective is to shift ownership away from the rentier class (and to another class) there exists a simple solution (that has existed since the dawn of governance). The property taxation regime can be skewed (without limit) to tax away the incentives of the rentiers and, better yet, to incentivize and compel (via direct transference onto) any other class (perhaps even a class that associates with being disenfranchised either in equity or in the emotional experience that resembles it and for which the regulator feels obligated to).
Your solution is far from simple. Only some STRs are being attacked, so trying to carve in a tax on those but not others would be difficult. Not to mention, you are essentially proposzzing that we limit the market for these multi-million dollar units such as xx they will be worth only a $300,000 – $500,000 to be affordable to locals. Besides being unfair and destroying the condo market, this is arguably a taking by the government that would require compensation.
Isn’t it odd that the Mayor and County Council continue to approve luxury condo and home development projects plus hotel expansions yet disapprove affordable housing projects? Actions speak louder than words. So, if the county does not “act” like there is a housing problem, what’s the truth?
One need only look across our country and recent history to see what happens when we ban citizens from owning property or to ban STR’s. During the recent pandemic, mountain towns saw a huge increase in people moving to these desirable places to live due to remote working options. Now these same mountain towns are also looking for “local housing” and trying to ban STR’s. Rather than deal with the housing issues, they are trying to blame owners of investment property (capitalism..) and ban sales to certain groups. Even in the above article it mentions some points about only selling to a select portion of the community. When you limit sales to certain groups it raises concerns. If you inserted a persons color, religion, race, gender, etc would that be acceptable? I don’t believe so.. Let capitalism work and don’t blame owners and build the needed infrastructure. Hawaii is a tourist-based economy, let’s embrace it and take advantage of it, not chase visitors away. Thanks.
The problem squarely falls on the Hawaiian government. The government has sold it’s people out for decades. Why the residents and natives refuse to see this and or do anything about it is mind boggling to me. They keep voting the same people and the same political party in over and over again. I read an article recently that stated in the last election only 32% of REGISTERED voters even bothered to fill out a ballot. On one hand I am extremely sympathetic as the natives are being systematically pushed out but on the other hand I have a difficult time taking people seriously when you don’t even do the most basic and fundamental option to potentially turn things around. Yes elections can be manipulated but 68% of registered voters not even casting a vote is all I needed to read. Want to start fixing Hawaii, start voting out the incumbents and the sellouts that are getting fat while you are getting perpetually squeezed…