Maui just received a historic $1.6 billion federal grant to aid recovery following the devastating Lahaina wildfire, which destroyed over 2,200 structures and displaced thousands. But the question now confronting residents, visitors, and policymakers alike is this: Will this unprecedented funding accelerate the already contentious plan to phase out thousands of short-term vacation rentals? Or will it have other consequences?
The new grant—part of the federal Community Development Block Grant Disaster Recovery program—was signed late last week by Maui Mayor Richard Bissen and HUD Secretary Scott Turner. Officials say the money is earmarked primarily for long-term housing and rebuilding infrastructure. But for many, especially those following the vacation rental crisis on Maui, this moment signals a potential turning point in that standoff.
Historic federal grant: what it means for Maui.
According to Maui County, this is the largest allocation ever made to a single municipality anywhere under this program. The funds are expected to support a range of recovery priorities, including affordable housing, water systems, and road rebuilding. While no grant money is directly tied to Maui visitor accommodations or tourism, its arrival removes a major excuse often cited by local officials: the lack of funding to house displaced residents.
For months, Beat of Hawaii readers have debated the justification and timing of the proposed short-term rental ban, especially in apartment-zoned areas. Many argued that Maui’s housing crisis, while real, was being used to push through an agenda that had more to do with favoring hotels than solving affordability. Now, with $1.6 billion on the table, some see even more urgency—and potentially more confusion.
The vacation rental debate heats up.
This debate isn’t new. Our last article had almost 200 comments from STR owners, longtime Maui visitors, residents, and frustrated would-be travelers. Some believe the grant will give the County the power—and political cover—to accelerate the removal of thousands of short-term rentals in apartment districts. Others see it as a distraction.
One reader wrote, “Even if prices drop by 20%, who is affording a $1.1 million condo with $1,200 HOA fees?” Another warned, “They’ll sit empty. I can afford to let mine sit until Maui realizes it needs the tourists back.” Many short-term rental (STR) owners have doubled down on the idea that their units will not convert to long-term rentals, calling that premise unrealistic and economically misguided.
Others believe this is exactly what Maui needs to regain control. “Tourism has been running this place for too long,” said one resident. You can’t expect people to clean condos and work three jobs just to live in a car.”
Will the funding solve Maui’s housing crisis?
The reality is more complex. While the federal funds will help build or subsidize housing, it’s unclear how much of that development will happen in high-demand areas like Kihei or West Maui, where many short-term rentals are concentrated. Several readers pointed out that much of the land in those regions is not currently zoned or serviced for affordable development, and permitting remains extremely slow and politicized.
Some wonder if the new funds could eventually allow the county to buy back units for permanent housing. That’s an uncertain scenario that until now seemed politically or financially impossible.
Others question whether any real shift is possible without addressing water access, infrastructure costs, and land control by legacy corporations. “It’s not about STRs or tourists,” one commenter wrote. “It’s about who really controls development on Maui—and what they’re willing to do with it.”
What’s next for Maui?
So far, the Maui County Council has not scheduled a vote on the vacation rental phase-out. At this time, testimony continues, and officials have remained quiet on how—if at all—they believe the new funding will influence the bill’s timeline or enforcement strategy.
Still, this moment feels different. Significant money is now in place, and political pressure is rising. For the thousands of residents, STR owners, and repeat visitors watching closely, the next few months may finally bring clarity—or escalate the conflict further.
Maui’s housing, tourism, and rental crises have now converged. Whether this $1.6 billion grant resolves any of them remains to be seen.
Want to share your perspective? Comments are open and welcome.
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Just have the county buy one complex, use eminent domain to purchase it at a fair price. Do whatever voodoo they need to do, then put the units on the market with a no rental restriction. Let’s see how it goes. If they sell and it’s even slightly profitable, they can use that profit to do it again. If not, they STR people are right and the locals just can’t afford to live in that location… Why is it always all or nothing?
Shutting down vacation rentals is totally nuts & won’t solve a thing.
Why can’t (1) the “leaders” on Maui, where I lived for many years, ever think creatively, “outside the box” !! Immediately acquire some former sugar-plantation land (via Eminent Domain, if necessary)…central Maui has thousands of acres of vacant former plantation land, with water rights. (2) the Feds ship in hundreds of nice “FEMA trailers” (I lived in a “double-wide” for years: they can be very nice), & (3) let the Maui-fire-displaced-residents live in those: for a year or two until they can rebuild … or live there forever, if they so choose. When or if they decide to move out: convert that to senior housing, which is also a critical need on Maui. Hawaii Government, and Maui County Government, in particular are both very stuck on “permits/permits/permits” taking years & going nowhere. They literally prioritize their “permit” rules & regulations over people.
The problem is that no STR owner wants to deal with the potential drama that’s comes with LTR. I honestly believe this push isn’t to help poor people afford housing it’s instead to help the hotels maintain occupancy that has shifted to Airbnb.
This might sound kinda crazy but what if the state offered the hotels tax breaks or some other incentives to give locals kamaaina prices that would essentially allow them to live in hotels?
Or better yet why doesn’t the state build more apartment buildings? Cuz forcing local families to rent their ohanas out long term instead of on Airbnb probably isn’t going to work.
As far as those who own property and live out of state I don’t really mind them having to bite the bullet on this tho. At the very least we should have exceptions for people who live in Hawaii who use Airbnb to help pay their bills.
Kapu aloha a me malama pono.
For the opponents of the proposed STR ban, what is your plan to solve the housing affordability crisis on Maui?
For the proponents, what guarantees exist that the ban will result in affordable long-term housing? Shouldn’t the existing vacation rental owners be compensated for the inevitable devaluation of their property?
By the way, what percentage of these vacation rental owners are actual residents of Maui?
I oppose the ban but recognize the difficulty Maui is facing. The underlying problem is staring the local government in the face; it has been almost two years since the Lahaina fire and only 26 structures have been rebuilt. The permitting and government overreach is absolutely stifling! The government needs to get out of the way! There could be low income housing built with this grant money, assuming it is not grifted away for a laughable number of units. Also, the government could enact tax benefits or incentives to builders/owners to build higher density housing (ohanas) to further accommodate the people. Stop voting for these dunces!
How many of these residents are going to live in studio, one or two bedroom condos? The price for these properties even if they are downgraded are still out for reach for Kamaaina…these properties are in prime real estate locations which command higher prices
It’ll be sad watching all the money be laundered away to ngos and various “non-profits” over the next few years while little to nothing happens for the people.
This money should be used to create housing that is suitable for residents, not tiny one bedroom condos. By creating long term housing in areas where schools, grocery stores, gas stations and additional infrastructure can be planned and built, the housing crisis can be solved and still maintain economic stability in Maui.
To survive we all need air, water, food, and a place to sleep. Just one example–
In California, the Irvine Company owns 65,000 apartments at $3,000 rent they collect $200,000,000 a Month!
Modern day slavery!
This will end very badly.
My daughter lives in Irvine, CA, they pay $3000 (total, for all I know + utilities I guess) for a 2BR apartment, but say it is cheaper than buying – and live almost close enough to work to walk.
How does Hawaii get that large of a grant???? It’s unbelievable. But I bet the locals will still bitch and complain. It’s sad because so many other places in this country are proud to be American. If they had a little class they would say thanks but no thanks. We will keep flying our flags that say. I’m not American I’m Hawaiin.
Dale, I agree with you. This amount of money is outrageous. Maui did not keep up its infrastructure and those houses were tinder boxes and polluted the ground and ocean due to the chemicals in the construction of those houses. Maui did not keep the trees trimmed near the power lines. I have been to the island several times since the fires, and they still have not trimmed trees on and or near other power lines! A lot of this money should go towards pollution clean up and tidying up their island such as trimming trees. Did all the residents of the Appalachian Mountains from Hurricane Helene get anything? They were devasted. And their states had no negligence.
While HST has frequently been known as “Hawaii Slow Time” when it comes to getting anything down, the county government will now change that to “Hawaii Spend Time” and unless there is lots of non political oversight, chunks of that money will be spent on things that it was never intended to be for. None of that federal government grant should be used to pay for the landsharks from the upcoming lawsuits as Maui County gets their a__ sued off by current property owners that are “on the list”.
With 1.6 billion available to build, will this just be a windfall for certain general contractors or will it actually produce affordable housing? What is affordable? Does it mean home ownership or is rental? Would the buildings these contractors put up still be far out of the reach of your target renter? Probably. At one point the big resorts would also build apartments for people who work there, correct? They dont anymore because those could be used for short term rental. It seems that the government has stepped up, which is good, but wouldn’t it be logical for the large employers to also step up and participate somehow in creating affordable housing? I think Disney does this, colleges do this, the military does too. It seems the needs would involve apartment buildings from studio to 3 bedroom units. And the builder would have to compromise on their profit margin too, but they won’t want to, anymore than the large employers would want to.
Who are they kidding. Locals can’t afford to buy these. They are vacation properties meant for that use.
Exactly! With HOA fees easily topping $1k/month and sometimes over $2k/month, the typical local cannot afford the carry a mortgage as well as the additional HOA fees. The average individual gross income for a Maui resident is approximately $43k/year, or $3,583 per month. No one is going to pay almost a third of your gross income (not take-home pay) to pay an HOA fee! It is unreal that the proposed STR ban is even being debated.
Our community AOAO/land lease fees are normally
$3,600 a month but under special assessment so now they’re $7,840 a month, property taxes over 25k and throw $600 a month for electricity and insurance, you start talking about real money.
$1.6B = 3200 $500K homes. Plus water, power, sewer, roads, and internet. Not to mention police and fire. Not to mention about 800 acres of buildable land.
But those are easy issues compared to closing the affordability gap between median income affordability (about $300K) and median home price (about $500-550K) that translates to $1200-1500 a month.
So here’s a suggestion: Use STVR tax revenue to underwrite mortgages for qualified Hawaiian residents.
That’s a win-win: STVRs continue to fill their market niche, about 10,000 local jobs are saved, and housing affordability is addressed. Conversely. Banning STVRS denies visitors a preferred odging option, reduces tax revenues with no apparent replacement, and makes a big dent in local employment while failing to address any housing issues.
n the course of these discussions, I rarely encounter mention of the numerous vacant mansions that lie unoccupied amidst our ongoing housing crisis. I propose that such scenarios should be addressed through legal measures to ensure that all homes are inhabited rather than left to languish without residents. It is essential that our housing resources are utilized effectively, fostering a sense of community and addressing the pressing need for viable affordable living spaces
Tax on un-occupied properties works in some cases but for really rich the just have a peon live in one or two rooms when they are gone. peon goes elsewhere when they come. This big in Vancouver Canada and has been for many years. makes insurance valid as well.
you’re suggesting a taking of peoples homes… that is just wrong, regardless of whether its a 2nd home or not, its not yours.. Next you’ll say hey if someone has 2 cars, the government should make them give one away.. please this is still the USA people own 2nd homes and it’s not your decision to decide what anyone should do with their property.. ever been to Vegas? Florida? think people all live there year around should just give their property away? glad those states have better governance
Maui is proud to be a part of the USA when mainland taxpayers pay 1.6 Billion dollars.
With 160,000 residents that is a $10,000 windfall per person.
Stop whining about the cost of tourist rescues and make Hawaiians pay the same fees and reservations to use the public beaches and parks as mainland visitors.
The politicians know not to do this because they need an us vs them mentality. Plus, if Hawaiians had to pay the same fees and visitors they would vote the politicians out.
Well, if you take around 30% off the top for the politicians, you have around a billion dollars left. Once you build out the necessary infrastructure, you can probably build a couple of thousand homes… only enough to replace those lost in the fires. Not nearly enough for what is needed.
Spending $1.6 billion in six years is insane. I know first hand, because in my 30-year engineering career I had a $20 million project to spend in 1-1/2 years. It took three of us engineers leading a small team to get the money approved, the project building and internals designed, construct it all with permits and inspections, and deliver on time and on budget.
Scale my experience up to $1.6 billon of spending and what you get is a mega project equivalent to *80 million* of the same size project I worked on.
I wish good luck to the people assigned from the Hawaii government, and the contractors, laborers, and engineers who will be given this challenge. You’ll need all the luck you can get.
I hear you. I likewise have been tasked with spending large amounts of money in a short time. My personal best was spending $20M CapEx on an IT project in 2 months.
This grant is made more challenging by the sheer quantity of permits involved. And permits require plans. Plans require architects and engineers. And the whole project needs leadership.
Unfortunately I bought a 1 bedroom condo in an older building in West Maui that has allowed STRs for more than 50 years. The unit was purchased to be used exclusively as a STR not a vacation home. I know the haters will laugh at our plight, but we bought at the peak financing a large part of the purchase. The AOAO is over $ 1,300 a month. Thanks to the Mayor and filthy politics our investment is worth hundreds of thousands less. There is no sales market and no way out. This is nothing but a hostile take over of thousands of properties. Shameful. I look forward to the lawsuit. But the damage is already done and was intentional. Maui Strong, yea. Maui strong arm maybe. Theft is still illegal in My America.
Hawaii’s one party government will devour this 1.6 B. Probably need to go to Vegas once a week to discuss what to do with the money.
This money will be squandered. Prove me wrong Maui.
Ron we all feel your pain or family’s condo has dropped at least 20% in value if not more. All because the mayor is looking for a scapegoat to blame for the lack of affordable housing. I’m so disgusted I’ve started taking my vacation $$$ elsewhere.
Which is why I would never buy a condo for an STVR in Hawaii. I can deal with insurance and property taxes, but adding the HOA fees on top I could not (mine is a 4 BR house and I try to work with people’s budgets – I am not on Maui, would have been happy to rent mine to displaced people on Maui in Hilo for about $150/night, but nobody took that). I’m not going to go long term because here in HI renting for more than 30 days will require mandatory mediation when people stop paying.
Will the release, timing and usage of these funds be publicly available information?
1.6 Billion. Yikes. Hopefully the rebuilding of Lahaina Harbor will be first project on the list.
So glad we made the decision several years ago to never return to Hawaii. Too much drama.
The funds could be used to accelerate the rebuilding of all those units lost in the fire by granting loans, in some case a grant to help families who can’t afford to rebuild because insurance was lacking either partially or uninsured.
You could use to build subsidized house on land owned by the county and sate.
Or will it just disappear like all the other funds Maui County receives in taxes and fees.
I keep hearing that the Maui Government is a black hole in financing? I guess I’m confused? Don’t you have a college with an economics department that some interested grad student can dig thru the county’s books and publish their results? This shouldn’t be hard to do?
Here’s the money . Someone needs to track every penny that comes in and make sure it goes to the proper place building back historic structures along with building in the back housing of the housing probably will not be like it was to begin with. Everything will have to be brought up to Current code.
I don’t think anyone complain if the infrastructure was properly put back in. Though the burned out, cars dump refrigerators, and all the trash that has been left on the island from the non-tourist does need to be cleaned up. This is not where this money should be coming from..
There also needs to be a reckoning if someone was a renter then they’ll have a property they can rent again if someone was a homeowner Their house may be rebuilt, but now they’re gonna have to carry insurance.
Hawaii needs an island version of Elon Musk to handle this.
Maui County signed for $1.6 billion in HUD disaster recovery grant on June 21st. It’s like giving crack to crack addicts – Hawaii’s corruption track record plus this massive windfall equals inevitable waste and fraud.
Recent example: Office of Hawaiian Affairs 2022 audit found “fraud, waste & abuse” with federal grants. Now they get $1.6 billion with 6 years to spend it.
The money Could fix real problems – our flood-prone coastal highway, water access (ironic since we’re the 2nd wettest spot on earth but have no water for rebuilding), & fire victim housing. But with Hawaii’s corruption & weak federal oversight, expect connected contractors and inflated costs. Oahu rail system comes to mind.
We need citizen watchdogs Now before spending plans finalize: attend County Council meetings, file public records requests, document everything, engage media, build community coalitions.
Bottom line: Real needs exist but I’m afraid our delivery system is broken & corrupt.
re: “They’ll sit empty. I can afford to let mine sit until Maui realizes it needs the tourists back.” If Bill 46 passes, you’ll be taxed an additional 3% of your assessed value per year, in addition to your annual property taxes for keeping it empty. So an additional $33,000 a year in property taxes on a $1.1 million dollar property.
It’s my understanding that Bill 46 is specific to the City & County of Honolulu on Oahu.
That said, I’m sure it if passes, Maui County will be chomping at the bit to institute the same type of legislation.
With $1.6B, they should have no excuse for not building affordable/workforce housing, roads, etc that can be required by building VPR documents to stay that way. This will also if done right does not have to affect the tourism market, the STR’s and thousands of jobs and businesses it supports. They should now kill the ridiculous STR proposal.
In what way will a 1.6 billion dollar infusion accelerate an STR ban? I would think it would do the opposite, and STRs would now be off the hook, since 1.6 billion dollars will significantly relieve the housing crisis.
Why would the infusion “increase urgency” and give the government the power and “political cover” to remove STRs?
Not being rhetorical – genuinely curious.
It’s been almost 2 years. No affordable housing has been built for those who list their homes. It’s an international embarrassment. I predict in another 2 years no affordable houses will still be built. And the $1.8 billion will go into a Black Hole (AKA Honolulu state government) and the money will disappear. The same way all large blocks of money disappear. This is not about STRs. It’s about career govt officials who are totally incompetent, inept and corrupt. The displaced people of Maui deserve so much more. This whole debacle is not Pono.
Yes, luckily Hawaii now has an administration in DC that is responsive to Maui’s needs. I noticed one particular name that is responsible for that Federal Grant has been omitted in the article. Give credit where credit is due.
Thank you.
I won’t assume to know who you are referring to, but the funding for this was passed by Congress in late December 2024 during the lame duck session that kept the government running. Brian Schatz was hugely responsible for pushing it through. The current administration, to their credit, didn’t try to cancel the award or claw it back as we have seen with some other programs.
Great article as always, one correction is HUD secretary Marcia Fudge is referenced but she hasn’t been at HUD for over a year. Scott Turner is the current hud secretary and has proposed eliminating emergency relief so I’m glad Maui could secure these funds before big changes take hold at HUD.
Who trusts the Maui government to best allocate these enormous taxpayer provided to use these to best advantage? Graft and corruption with favored contractors , kickbacks and the usual. Who will monitor how these free funds are effectively used over the next 5 years? Not the press, not even the beat of Hawaii, which seems more concerned with boring airline issues. The answer is no one cares enough.
All they really need to do is to accelerate building permits. Stop this stupid but politically popular adverse possession of condos that are not practical or affordable? What we need are some good class action lawyers.
I’ve discovered that the Beat of Hawaii doesn’t read our comments, doesn’t do a darn thing to investigate these serious issues, and has never proposed a viable way to organize, monitor or combat this tragedy. So who influences you?
I would not count on that federal money too much. You are a blue state, and you should know what that means!
Hopefully, this won’t be another chance for the island politicians to shine in what they do best – waste other people’s money.
Hire the best, most component, business savvy professionals to do this job. It’s a once in a lifetime chance to do it right.