As emotions soar higher than a jetliner, the ongoing controversy over Maui vacation rentals achieved a fever pitch yesterday at the Maui County Planning Commission meeting. The superheated session featured over eight hours of passionate testimony from residents, each voicing their personal picture of the island’s deep divide over Mayor Richard Bissen’s proposal to phase out more than 7,000 vacation rentals, representing about half of the entire island inventory.
This comes concurrent with May 2024 data from the state that shows, among other things, that the demand for Maui vacation rentals has dropped by 40.3% since 2019, and that the May 2024 occupancy rate was just 49.5%. The average nightly rate, including 18% tax in May was $425.
Maui vacation rental resort controversy as statewide housing crisis intensifies.
The Maui County Planning Commission meeting marked a significant moment in the ongoing debate over short-term Maui vacation rentals. With day-long testimony, the community demonstrated its own deep divide over Mayor Richard Bissen’s proposal to eliminate half of its vacation rentals in an attempt to address the island’s severe housing crisis.
The plan includes resort units initially developed for vacation use, including luxury condos and apartment hotels, largely in West Maui and South Maui.
Proponents of the plan argue that reclaiming these units for long-term rentals is essential for residents struggling with housing availability and affordability. This theme reverberates throughout Hawaii at a new heightened level. The devastating Maui wildfires have only exacerbated this crisis, displacing thousands and highlighting the urgent need for more residential units.
Opponents fear severe economic fallout. That includes job losses in property management, cleaning services, and many other sectors dependent on the vacation rental market. Many local businesses and workers rely heavily on the income generated from these rentals. In addition, there is widespread concern that the absence of Maui vacation rentals will drive visitors away from the island and towards other vacation destinations. Maui vacation rentals are already suffering from record-low occupancy, with concerns that the trend will only worsen.
New unproven economic projections from UHERO.
According to the University of Hawaii Economic Research Organization (UHERO), converting these vacation rentals into long-term housing has the potential to increase Maui’s housing stock by 13%. If that were to happen, which is entirely unclear, it could be a crucial step in easing housing prices and improving affordability. However, significant economic risks are involved, including reduced property tax and other revenue streams and potential impact on the Maui tourism sector. Even UHERO said, “It is not clear what the market price of these units would be under a policy that bans TVR as a use.”
UHERO believes that shifting these units into long-term rentals would, however, put downward pressure on rents and improve supply to residents. It does point out, however, that “An unfortunate outcome for housing supply would be if existing or new owners simply retain their properties for occasional personal use despite not being able to operate a vacation rental.” Many of you have pointed out in comments that it is highly unlikely that many or most of these units would ever become affordable housing.
UHERO’s analysis of the Minatoya List of impacted properties.
The “Minatoya List,” a collection of properties legally granted exemptions to operate as short-term rentals, is at the heart of this current debate. When the list was established in 2001, these units were legally permitted to continue operating as vacation rentals based on criteria set by a legal memo authored by Richard Minatoya. Mayor Bissen’s proposal targets these properties and aims to transition them “back” to the long-term housing market.
The individual units in the affected properties on the list are primarily small to mid-sized condominiums, with 72% of them being under 1,000 square feet. The majority are located in West Maui, Kihei, and Wailea. If these properties were shifted to long-term rentals, the theory is that it could significantly lower housing prices, given the expected influx of units into the real estate and rental markets.
UHERO’s data indicates that an increase in the Maui housing supply could significantly reduce condominium prices. This would, in theory, make homeownership more accessible for residents. However, this shift might also have multiple unintended consequences.
Other solutions for Maui?
Some suggest that increasing the property tax rate for Maui vacation rentals might yield a better result than an outright ban on these 7,000 units. That approach could provide owners with a greater incentive to sell or convert their units to long-term rentals while simultaneously maintaining some level of tax revenue for the county. Such a policy might also face fewer legal challenges than a ban, while providing a more balanced solution.
The next word on Maui vacation rentals is due on July 9.
The Planning Commission has deferred further action until the next meeting on the Mayor’s plan July 9. That is to allow for more testimony adding to the community engagement. This pause will hopefully also allow for evaluating the broader economic impacts of the plan and finding a balanced approach to address Maui’s housing crisis without compromising its economic stability, including tourism, which is the all-important financial driver.
Beat of Hawaii is committed to providing in-depth, firsthand reporting on this critical issue. Our team will be on the ground on Maui, bringing you the updates. Stay tuned as we continue to explore the complex dynamics of this debate and its implications for Maui’s future.
We welcome your input!
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I love the Islands but no longer return to my childhood home since it’s become a Disneyland version of itself, a place for visitors where the locals can’t afford to live bcuz their government allowed residential units to convert to short-term rentals. Government has to restore a balance so that tourism is a healthier part of local life before the locals leave for Vegas.
We’ve been visiting Hawaii for 50 years. Obviously it’s our happy place. We’ve visited each island, but normally return to Maui. Early on the only option was hotels, we made it work. But the STR is certainly more affordable & allowed more & longer trips. As we aged this was certainly an advantage. Not all STR’s are owned by big corporations (many the hotels themselves) many are “normal” people. We’re not rich but over the years we contemplated buying, basically funding our trips. I hate to think what the financial implications would have been. Forced to rent long term would mean selling, and who wants to pay top $$ for a condo they can now only get about a week’s normal revenue for the whole month, & no place for me to stay. So glad we didn’t buy. I understand this isn’t unique to Hawaii, every vacation destination is facing challenges, but most locations don’t rely solely on tourism. With rates double our last trip not sure we’ll be back. So sad. Good luck
I am gobsmacked.
Here is an amazing reaction from our very own council member, Tamara Paltin.
facebook.com/share/p/8s6g1gDLmA7EwJS2/?mibextid=WC7FNe
A 4-1 opposition to the bill must have gotten the council’s attention!
Yet Tom Cook, who represents more than half the Minatoya List owners in South Maui, was too timid to state an opinion at his Town Hall. Maybe he will watch this and have an epiphany.
Us/Them. That’s what I’m reading in these comments.
Maui and the Hawaiian Islands are simply a mirror image of what’s happening on the mainland. On the mainland mostly older, mostly white individuals see the end of a majority white population, and they are drawn to the promises of a sociopath. Native and long-term residents see the same invasion of the monied class and, much like the southern border immigrants, are leaving because they have no choice.
If you want to place the mainland-centric blame on politicians, look no further than the decisions that are imminent in November.
For me, I am one that looks at Hawaii as perhaps one of the last places in the U.S. where one can escape the coming insanity. Let Hawaii make its own decisions, not simply paint the picture of native Hawaiians wanting to take over.
Braah! If your post isn’t a textbook example of “us/them” I wouldn’t know what is… !
Best Regard
Just pointing out the reality that nobody wants to talk about. Folks gotta have a place to live even if it isn’t what they want to call home.
I do agree that it’s all how you look at the world and one’s place in it.
What does this even mean? Are you saying the world owes you housing? Sure, if you’re 18 and under or disabled, or over 65. Otherwise, you’re probably bunking at a shelter.
I believe this is what it means. An entire town and part of its outlying area was cleared by a fire. Through no fault of their own, many of these dwellings and their inhabitants were very old, no insurance because it was free and clear. The previous land is now a bed of toxic waste. The infrastructure is non-existent.
Just put yourself in those shoes. Now imagine that these people are your Tutu, your aging mom and dad, or your child living each day not knowing where or when home will be again.
There are many thoughtful responses by people suggesting solutions. I wish I were that smart to know all the answers, but I certainly know more than a glib response like, …”the world owes you housing?”.
That’s what the first post was about. The world has become: “It ain’t affecting me so what do I care?”
I understand eliminating zoning that allows STR’s in the middle of neighborhoods built to be single family residences. That makes sense and should be done, if only because they disrupt the neighborhood. Same thing with apartment blocks that have imbedded STR’s. Would help a bit, and actually makes sense to return residential to residential.
But as others have noted, many to most of the buildings being talked about for rezoning would be older purpose-build beachfront or near beachfront buildings of substantial size. Simply never intended or designed for a family to live in.
They come with parking structures designed for the average smallish rental car at one per bedroom. This does not really even still work when you project just a couple with a single child and two cars moving in long-term. When you get into a large or extended family situation packing in, then it all falls apart. Image your last condo parking garage with too many cars and trucks trying to park.
The longer this idiocy continues, the worse the situation will become for Maui’s displaced residents. Forget about the MInatoya List. Forget about banning any existing short-term rentals. Instead, ban any new short-term or vacation home construction and expedite realistic workforce housing. This new fast-tracked housing should only be made available to existing local families and those displaced or forced to move off the island due to the wildfires. Absolutely no sales to speculators or off-island residents. I freely admit that I’m not sure how this can be achieved legally, but it’s time our politicians started working for All their constituents, not just those with the largest campaign contributions.
Dear Beat of Hawaii,
Do you or your readers have a link to watch back the testimony from this June 25th meeting?
(Must be user-error on my part in not finding a link to watch this public meeting.)
Thank you!
And as all this BS goes on all of the people that are usually planning their trip to Maui are now looking elsewhere and probably wont look back. Maui was just starting to come back after the scam lockdowns.
Tourism is a business think of it as all others piss off or leave your customers with doubt they find someone else to do business with and don’t look back. The people of Maui should be looking at the chosen ones that they put into Gov and Mayors house look what they have done lined their pockets. Remember 1 thing those politicians are lying to you they can give a Damn about you not just these corrupt ones in Hawaii all politicians they are in it for themselves. Sad I hope the people wake up. Are you awake yet. This damage will take years to fix.
Sadly, at election time, there is a dearth of quality candidates. But you are right: Hawaiians (and particularly those of us who live on Maui) better start paying attention to who we elect. We have to find better leaders that are smart and honest.
Something else to be considered by the Maui Council. If they pass this proposal and succeed in forcing a steep drop in value for these STRs, that also may translate into a steep drop in value for other residential properties as well due to the sheer amount of units added to the supply. This probably won’t make those property owners very happy as they are delighted to have such high real estate values to increase their wealth and use as a piggy bank as needed.
On Oahu one of the biggest NIMBY reasons cited in fighting pretty much anything is: “It will decrease the property values in the area”. The Maui Council had better consider this possibility or end up on the wrong side of All the Maui County residential property owners…
Best Regards
Of the two paths — a) forcing STVRs to convert to LTRs resulting in loss of tax revenue, tourist dollars, and jobs, or b) building the affordable low and middle income homes Maui families need — which results in Maui gaining wealth and stability over the next ten years?
It was interesting to divide the testimony at the hearing. Proponents focused on emotion- the need to provide housing, while the opponents cited the facts about:
1. The unsuitability of small apartment condos to permanent housing- HOA fees, high taxes, condition, etc.
2. The lost tax revenue, negatively affecting schools, roads, and other services.
3. The massive loss of jobs from decreased tourist revenue (with a multiplier effect upon all businesses in Maui) and lost services/jobs normally provided to these rentals.
4. The solution is to eliminate the red tape and incessant delay that drive up the cost/availability of affordable housing. Maui needs development of affordable housing, not fewer STRs.
Bissen and Green are pandering to emotion by advocating a policy that will make things dire for ALL on Maui- while not solving the housing crisis. There is an old adage. When in a hole, stop digging. More taxes, eliminating STRs, is digging Maui into an even deeper crisis.
We all agree housing prices everywhere are off the hook. The shortage on island is bad. That should not mean we take property use that has been used for STR away from owners. Us say large foreign companies own these properties. That is not true our area which is mostly STR. Most of us only own 1 property where we are here part time. We fully understand full time residents need housing. Most want to stay in the Lahaina area where they have lived for years not in south maui, upcountry etc. Stop the Red tape build affordable house in Lahaina/Maui. Not take our STR’s that have been allowed for years. The income you make from us is a lot. I know I pay it monthly. Use that money to build. Our properties are not set up for families with children, pets etc long term. You can only have one car. Our buildings are old. The assessments right now our so high we need to rent to help pay them. 98% of those needing housing can’t pay that. Others will lose their jobs if you do this making more suffer
KHON 2 posted a You Tube video today reporting on the the early June carjacking and chase of a tourist couple on Maui. A Maui local has been arrested and charged with this and multiple other attacks.
Horrible for Maui tourism and sad the police did not issue warnings to tourists as this was a known serial criminal.
Reminds me the police department in the movie Jaws- more worried about tourism than public safety.
Based on what you hear from the state and local levels – chasing away the biggest money maker will solve all the problems. I understand that there are bad vacationers and when they are caught, they should pay for what they have done. But, there are more good people who visit the islands than bad.
I also understand the problem in Maui, with the fire. It will be a challenge to solve it without some money….
I live in a state where the state,county,city can plan a road, building,or anything passed by the planning department and get away with offering the homeowner tax appraisal value and not a cent more for their land and home. You don’t get market value not even close. Sorry but maybe your STR maybe right in the path of a new freeway overpass or state parking lot or building etc. Where is the new hotel access road coming in from off the new expressway? What is the state gonna do with STR’s that refuse to convert to LTR’s. Sorry and Good luck.
We are staying far away from this rolling disaster. Instead of $300k for a “study,” pay for Lahaina Strong members to attend remedial math.
I’m sorry to say that my family and friends that normally take our November vacation of 20 days and the total of 73 people have decided that with the Governor of Hawaii raising the hotel, rental car, and resort fees, not forgetting the charges being placed on beaches and other National and local park fees, and the taxes being raised on our 6 slips where we presently have our sailboats at, a small group of us will be coming to Hawaii to bring our Sailboats back to the mainland and sadly we will no longer be vacationing at or around the Hawaiian islands.
Our new vacation spot are at Guam and the U.S. Virgin Islands, we loved the last ten years but in good faith of our family and friends we will no longer recommend others to visit most of our friends are current military, and first responders with a very large friends base.
Very, very sorry to see you go. Unfortunately, visitors turned off by our political turmoil (and high taxes) plays right into the hands of those who want to limit Maui tourism to high-priced resorts and hotels. But your comments help us to make our case that we are on a dark path.
I live in a very small residential condo community in central Kihei, makai of S Kihei Rd. I am surrounded by STR’s on the Minatoya list.
Having had my property appraised a few months ago, and seeing the sales of Kihei condos, I see little ability for most to be able to rent these units if they are forced to transition to LTR’s. My HOA fee alone has increased $250 in just 2 years (50%) largely due insurance (no pool) and landscaping (1 time a week) cost increases.
Even if there was a 25% drop in the value of these ocean front properties, they would still be $750k – $1 Million+ units. The economics to cover the effective rent for a mortgage, property taxes and HOA simply isn’t there for most living and working on Maui, which are largely hospitality industry jobs.
Maui’s tourism industry has been decimated by the horrible messaging from the convention bureau, governor & mayor. I don’t know how they intended to replace all these lost tax dollars…
Chad, you are exactly right. Simple math understands that these numbers simply do not line up. This is a way for politicians trying to look good without a shred of knowledge of how the world works.
The reality is that the islands are now a tourist destination and without that, the islands will die a slow and painful death. Hawaii simply has almost no exports to support itself without tourism. Sugar cane, pineapple’s and other exports have long left the islands as a valid source of income. If politicians are smart, they’ll understand not to bite the hand that feeds them.
Sorry Chad but sounds like Maui is just gearing up to only welcome and take care of residents with millions of dollars and where money is never a problem. A millionaires paradise island type of thing. Here in Oregon you can purchase a brand new built home west of Portland for around 435,000. You can live off the interest off the balance of 1 million and retire early. Not every situation is a dead end.
Look up “Sustainable Developement Goals” (SDG).
How do the governor and the mayors implement this plan in Hawaii?
1. Make visiting expensive – this will lead to less tourism.
2. Less tourism will lead to more poverty, infrastructure collapse, people leaving Hawaii.
3. No permits to rebuild any Lahaina homes after almost a year? Coincidence? Or convenient?
4. Noone can build affordable housing? Really?
5. Tourists who stay in STR’s are BAD, but tourists who stay in timeshares & hotels are good?
Green is proud of his “less people, more open space” plan to shape the future.
Lahaina Strong and the dark money Superpacs behind them won’t be swayed by logic. The bill was never about providing affordable housing. It was intended to throw Maui’s economy into disarray before the election.
At its root, the current housing crisis throughout Hawaii – but most notably on Maui – is a supply-demand dilemma in two sectors of the economy – (real estate and labor) – that perhaps nobody imagined or could have predicted.
So, here we are contemplating the government seizure privately owned real estate apparently in the “public interest”. While such seizures have been done before, justification for such carries a high burden and will likely open the barn doors for an avalanche of lawsuits that could string out for years.as Judge Judy would say, “Good Luck -folks” Jim E
By not building affordable homes year after year, by not developing the infrastructure needed for those homes, politicians played right into the hands of master minds, who are now using people’s desperation and frustration to get themselves elected. These single-issue voters have been promised ocean-front condos if they get on the bandwagon.
I live in Maui from Oct to Mar. If the ban goes ahead i wont sell and the unit will sit vacant for 6 months and Maui will loose a lot of income it might otherwise have had. Banning STR is idiotic. You can’t pay a mortgage if you have no job people.
So, the mayor says, “I have to look out for my people best interest and provide the basics of living…roof over their head” Well it seems that his people are just a small group that have been pushing this agenda from before the fire. Instead of blaming the people that purchased those properties, blame our government. They allowed this from day one…why not look at all the b/b’s they allowed in residential neighborhoods. Now I can see them stopping B/B’s as they are in residential communities and are homes not tiny condos. But to kill the STR’s thinking that will solve the problem, they are dreaming. Instead of using money to bail out the owners of Kaahumanu Center, use that along with selling the Hawaiian telecom building and the David Trask building and provide the infrastructure we need. County politicians have wasted our money on stupid things….Hey Mayor, I’m one of “your people” too. You are NOT looking out for all of us! You are not even thinking logically!
I listened to a large amount of the testimony. I was amazed at how the Lahaina Strong folks kept emphasizing that the ban was for the benefit of the community. I guess they haven’t noticed that a huge amount of the community depends on the revenue generated by STRs, as expressed by many locals opposed to the ban. I was also struck by the nearly overt racism some expressed in their presentations. According to an article in Maui Now, testimony was running 4-1, opposed. I hope the committee (and the county pols) noticed.
You suggest raising the property taxes on shore term rentals? Are you aware that STR owners are now paying more per assessed value than the large corporate hotels? To give you an idea of what these properties pay: A $1MM STR property is now paying property taxes over $15,000/yr. An owner-occupied residence at about the same value is taxed about $1M/yr. In addition, STR properties pay an additional 18% tax per occupant (excise and transient accommodation tax). There is something wrong with this picture and increasing taxes is not the answer. These costs are ultimately passed on to the tourists and it won’t be long before they stop coming to Maui due to the high costs and unwelcoming atmosphere by many locals.
I agree, except, perhaps you have a typo… 1M a year, should probably have been 1K a year. Lowest owner occupied prop tax anywhere!
Sorry for any misunderstanding but in my business M stands for 3 zeros….for example, Mcf is 1,000 cubic feet. So please take my M to represent 000. Aloha!
Oh sorry! I had no idea. I still think most people would understand 1k. Guess I’m no that smart.
Your figures are a bit off; here’s the rate of taxation for residential property directly from the Maui County website: owner occupied properties valued up to 1 million pay $1900 per year. 1 million to 3 million pay $2000 per year, and over 3 million pay $2750 per year. Non-owner occupied properties valued at up to 1 million pay $5850 per year, 1 million to 4.5 million pay $8000 per year, and over 4.5 million pay $12,500 per year (imo, the non-owner occupied tax rayes are low. Here in California we have a statewide uniform rate of 1%, very low compared to the rest of the country, meaning a home valued at 1 million pays $10,000 in property taxes per year). Long-term rentals pay a rate somewhere in between these. Even accounting for the ridiculous 18% TAT, there seems to be room to raise rates on properties used as STRs in order to keep the rates low for full-time residents. But I do agree that banning 7000 units from STR use would be a financial and economic disaster for Maui.
You conveniently left out the STR rate. For a 1.5 million dollar condo, the tax rate is 13.5% for 2025. That’s $20, 250 a year, instead of $2,250
For an owner-occupant. Almost 10X as much.
How much exactly do you want the STR owners to pay?
No, my figures are not wrong….sorry. I live here and have both a house and a STR, so I am quite aware of my tax bills. The amount of property tax on my rental is approximately 15 x more than the house (both similarly appraised). Are you aware that there’s also an owner-occupant’s $ exemption applied to the owner-occupied property appraisal that STR’s don’t qualify for? Basically, the STR’s are being punished tax-wise by the County and we’re paying the costs for others.
Thank you for staying on this issue. There is not right answer that makes everyone happy. I hope there is neutrality in the decision and no pay to play voting. I think more people lose than gain. Work is gone and HOA dues are still high as it insurance. It’s not going to even out like they Wish or Hope for but reality will come in at some point. The people who think shutting down STR’s is the magic fix are not wanting to see most can’t afford the ongoing cost of a condo in an old resort. And if they agreed even partially with the facts, then they have no war to fight so they simply pound the table and say its the best idea since free housing. 300K for a survey is such a waste of money when its so obvious that no work means no way to pay rent and tourists won’t come if they have to pay 500 a night with no kitchen to offset the cost of food and eating out then entire time. Just crzay thinking.
The mayor introduced the bill to crash both the housing market and the tourism industry. As a judge, he knows they will lose in court (although it would probably take five years and enormous sums of taxpayer money). It is hard to believe the mayor would do something so destructive, but he has.
BOH, in regards to having another meeting on July 9th, you said:
“ This pause is also for evaluating the broader economic impacts of the plan and finding a balanced approach to address Maui’s housing crisis without compromising its economic stability, including tourism, which is the all-important financial driver.”
Really? The pause is so they can “find a balanced approach”? I just thought there was so much testimony that they needed another meeting.
Are they considering a change in direction?
After listening to the entire session yesterday, I do not believe the July 9 date has anything to do with the economic report. They simply ran out of time to hear all the speakers. There is no guarantee that they will even have the report complete.
If I owned just one property that I was using for a vacation rental, no way would I be selling it, I’d keep it for personal use. So much of their research is flawed because they don’t know what people will do if they are forced into closing down their vacation rentals. If I owned multiple rentals, I would be tempted to hold onto them as long as I could until the dam breaks and they can be used again. I don’t see any part for these units to ever become residential housing. There will be fewer jobs if you elimate 1/2 the short term rentals. Even if you drive the prices on these units down, they still won’t be affordable to residents in a failing economy and will be grabbed up at a good price by out of staters or the Chinese. Good luck with this, Hawaii. 🙁
Mayor Bissen continues to acquiece to a small, but vocal group. He’s making irrational emotional decisions for a few, trying to solve a problem for many. Regardless of his personal opinion, he needs to be looking our for the entire County. Additionally, his background might be law, but apparently lacks a CPA. Because at this juncture, it’s about math. Reality – how many families are moving into 1 and 2 bedroom condo’s? Lastly, if the County wanted to fix this then they need to partner with developers with tax incentives, land and a plan. The County lacks all of that. Someone call Paradise, California.
We won’t rent out our unit for long term rentals. Few can afford the $6500 per month rental fee as that is what it would take to meet our mortgage, maintenance fees, and property taxes. With a little left over for any Capital improvements. We will use it for ourselves and our friends. We can afford to. Let the chips fall where they may.
The government has no business regulating private personal homes in any way other than property taxes which should go to support infrastructure fire medical and schools. The res is just stealing from the private sector to fund out of control liberal spending
Aloha guys. So instead of just building affordable low income housing, the mayor wants stvr owners to sell or increase their tax base. Talk about unfair pressure for them when they have been responsible for adding many dollars to the state budget which should be used for building more housing. What a crock of mismanaged guidance and backwards thinking going on over there. Yes, revenues are down because of all the negatives of visiting there. It is their own fault, not the owners. But they want to stick it to them anyway. No wonder no one wants to go visit there. I surely don’t. Have a great summer.
Where do I begin? This is just laughable. At least UHERO seemed to indicate (what we all know to be reality) that prices are not going to drop just because the Minotoya list of properties convert to long-term housing. Rents are going to be high, a lot of those units aren’t even designed for long-term living. I don’t see housing prices dropping significantly.
Sounds to me like the Mayor, as well as the Governor, have not yet awakened from the trance they are in, and its business as usual!