Plan Eliminating Half Of Maui Vacation Rentals Was Years In Making

Plan Eliminating Maui Vacation Rentals Was Years In Making

A prior bill and related economic study put into perspective just what is at stake with Maui vacation rentals.

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72 thoughts on “Plan Eliminating Maui Vacation Rentals Was Years In Making”

  1. Having a banker write the “white paper” is all everyone needs to know about the motive behind reducing short-term rentals. The truth is, the only solution to the housing shortage in Maui is for the State to underwrite the construction of low-cost housing, because current property values preclude renting homes cheaply. This bill was never about providing housing to working-class folks; it was about serving up the big hotels with an opporunity to gouge visitors without competition.

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  2. As a retired Canadian vacationer, it has always been difficult dealing with the added cost of the Canadian to US dollar exchange, but now with Maui’s new restrictive policies eliminating half of the short term rentals and escalating taxes….then with a heavy heart I will never have the opportunity to see its sandy shores again.

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    1. Hang in there, Oryst, The STRs aren’t going anywhere. And don’t be shy about asking for a discount. We know how the exchange rate works against you. 🙂

  3. STRs will never become affordable housing. The common costs for these units are simply too high. HOA costs, maintenance expenses and taxes alone result in costs on the order thousands per month. If the owner has a mortgage (and most do), they’ll need to recover those costs as well. The result will be studio condos that will cost $4,000+ to rent monthly. Certainly not what I would classify as affordable and they aren’t set up as permanent housing as the displaced people of Maui will tell you.

    The government is in bed with the Resort corporations and that’s what is driving this decision. STRs hold resort rates down and that’s the reason this is happening. Just take a look at who was put in charge of the Tourism authority.

    The Governor and the Mayors know that this won’t provide any significant level of housing relief, but they are beholden, so they tow the line.

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    1. I am a 1/52nd deeded timeshare owner in a 2 bedroom unit . My maintenance fees run about $1400. That translates to a HOA of about $5,600 a month. Who can afford that on top of rent or mortgage? Not a low/middle income worker that is for sure!

  4. Hawaii voters need to decide whether the significant loss of visitors, jobs, and income is worth the reduction in short term housing. As one looking from the outside in it does not make sense to me. Most landlords don’t want the hassle of long term rentals and the difficulty of evicting those who default on the rent. Moreover, Hawaii does not have an industry to replace the economic loss by redicing STR. It’s the old expression of biting one’s nose to spite its face, and it will have severe negativ economic impact on the state!

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  5. It gives me hope to see light coming to this topic. The mayor’s projections for minimal economic impact never made sense. The new study is being done “in house” correct? I hope they are qualified and honest.

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    1. I hope I’m wrong, but my suspicion is that the new study will find the answers they are looking for so that they can move forward. Hard to believe this move wouldn’t backfire spectacularly.

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      1. It may be difficult to rig the new study since there is already one published. I completely agree with statements regarding the current politicians’ allegiance. Those that back the new affordable housing will win including county officials and state legislators. Us STR owners might even accept bumping up the current 3% Maui TAT a few % if the county would dedicate the entire TAT to affordable housing or subsidies to workers in the tourism business.

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  6. If eliminating STR’s were long in the making then the tragic fire incident really had nothing to do with it. Was converting STR’s into long term housing a plan in the making years ago also. Hawaii’s problems and issues are getting really hard to comprehend and understand when cans of worms get opened up. Aloha, Mahalo, Hawaii residents. I feel your sadness.

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    1. I don’t think our problems are hard to understand. Decades of incompetent, inept, corrupt governance cause lots of problems

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      1. Unfortunately, progressive policies rule the day in Hawaii and they have been proven to be ineffective at doing what they’re intended to do. I get that the alternative is not known and some think “the devil you know is better then the devil you don’t know”, but you have to, and pardon my George Orwell quote, “the party told you to reject the evidence of your eyes and ears”, at least consider that what has been happening is not good and a substantial change is needed.

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  7. I love Maui but I have seen in the last few years the awful conditions for the working people. High costs of housing and the low wages. I have no clue how to fix this, but I do believe the citizens of Maui Council can improve the entire situation as many mainland people have found vacation in Hawaii has become too expensive.

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  8. Liked the article. According to Honolulu Civil Beat accounts as well as Brewbaker’s LinkedIn page, he’s been talking about Hawaii’s economic issues for 35 years. That’s impressive. I took micro and macro economics on my way to a BS in physics (ultimately resulting in an MS) and knew in 2 minutes of my first review of the Hawaii economy what everyone should have seen coming. You live by the sword (tourism), you die by the sword.
    Hawaii is never, and I’m confident in saying so, but would love to be proved wrong, ever, going to be more than a tourism based economy. It can’t afford the housing or infrastructure which works for workers, locals and the land. Won’t happen.

    Hotels are already raising prices past what normal cost increases or inflation would project. Removing short term rentals will destroy what Hawaii’s economy enjoys.

    Good luck. You’ll need it given the democrats who control are working to turn Hawaii’s economy into a socialist economy.

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    1. Pretty much everyone has lost patience with the Fishing for Housing Lahaina S7trong crowd who, dissatisfied with $1,000 a night hotel rooms and 3 meals a day, camped on the beach to demand “dignified housing.” After 6 months, even fire survivors told them to get a job and stop waiting for a house to fall from the sky. But this is who our mayor chose to pander to: people who want everything given to them. Forever.

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    2. Reducing short term rentals will simply result in reduced state income which will result in higher costs for the locals. It’s not complicated.

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  9. Thank you so much for this article. We knew that there is already a negative impact which will worsen should this ban take place. Now the question should be about who will be doing the research? Will they or their family and friends benefit in any way should this pass? How can we trust the research when only recently corruption with our politicians and contractors was just revealed? There should be an unbiased company doing this research. Can you shed any light on this?

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  10. The Emperor has no cloths. The answer is simple. Get busy building affordable housing. Spend the $300k on that. And when you vote, remember that the bill that almost all state legislators voted for to turn over STR rental control to the counties broke the camels’ back.

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    1. and there was plenty of testimony at the state level, warning them that some of our politicians at the county level are not capable of higher order thinking skills

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  11. It’s even more confounding that this proposal was years in the making; but, no economic impact study was planned until now. Better late than never?

    Perhaps the study gives political cover for the huge lost revenue figures should the bill proceed as proposed.

    We decided to use our Hawaiian Air miles for a family trip to Maui next month. Our preferred condo complex appears to be on the list to be removed…and not removed? The condo complex is listed as zoned for both apartment & hotel.

    How would that work? By itself, this seems like a legal challenge for this property, or is a typo?

    This property has little storage and limited parking. It’s hard to envision a family living in the complex we visit.

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    1. Thank you for visiting, Olga,

      How ironic that an off-island visitor has more grasp of the illogic of this proposal than an elected mayor…

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  12. Families will not come to Maui and stay in Hotels they simply can not afford it. No cooking facilities, no laundry facilities
    Who wants to put their kids in a high rise hotel?
    Not to mention the dollars lost to the county when people stay away, actually it is allready happening now

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    1. I think middle class families will not come here. Wealthy familes will continue to pay whatever price. I’m sure that’s what Maui government is counting on. If tourist drop in half, but prices for hotels double what they are now. No real tax revenue is lost. Less tourist also means less resource (water, electricity, etc) being used. They have already said they want a better class of tourist coming here. What they mean is rich.

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    2. You’re correct.
      Don’t forget the economic principle of Supply and Demand. If the number of short-term rentals is reduced (a reduction of supply) the rental owners who still have a unit to put out to rent, will meet the demand with higher rent.
      The demand for more hotel rooms will then increase. As the availability of hotel rooms decreases as the demand for them increases, the hotels will charge more for the rapidly diminishing number of available rooms. This would drive up the demand for affordable short-term rentals but unfortunately someone passed an ordinance forbidding the increase number of short term rentals.
      Don’t despair that the hotels are increasing their prices, that will keep visitors from coming. That seems to be what is really intended by the proposal.

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  13. Government isn’t really interested in creating more affordable housing. It could change the liveaboard rules for boat owners and free up hundreds of apartments very fast. It could enlarge the marina in Keehi lagoon in a short time. Boats from $20,000 to $100,000 are much more affordable than million dollar houses or even the chicken coop villages they make for the homeless. On shore bathrooms and showers and sewage stations protect water quality. Mooring fees pay for everything. It’s done all over the world and makes sense, don’t expect our leaders to do it. There’s no money for them, like they get working for the hotel lobby

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  14. Summary of Key Financial Impacts:
    State Tax Revenue Decline: $137.3 million in GET & TAT receipts.

    Economic Output Reduction: $2.74 billion decrease in Maui County’s output.

    Job Losses: 14,126 jobs in Maui County, with a total of 16,681 jobs lost statewide.

    Tourism Receipts: $1.67 billion annual decrease in tourism receipts.

    Property Values: Potential downward pressure on property values and rents.

    Local Business Revenue: Significant impact on accommodation, retail, food services, and other tourism-related industries.

    Make any sense to implement this? Nope.

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    1. Better idea… instead of governmental overreach… Maui owns a lot of land and state and fed subsidized housing can be built. Win win. Leave our short term rentals alone.

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      1. This is a perfect solution. Keep the tourism economy alive (incl. STRs). Redirect the water to where it should be flowing (prior to pineapple). Designate tracts of lands in West Maui to build a new town with pre-cut homes for displaced workers using state and federal funds. Go forward not backwards.

        1. Lots of good ideas bubbling up now. Many could be implemented with Public-Private Partnerships if we only had politicians (The Public part) that were working for the voters and the long-term good of the islands instead of themselves. There are billions of Private funding dollars just waiting. So why aren’t they being deployed? Business’ don’t get into big long-term deals with people they don’t trust.

          It’s very easy to decide who to vote for. Elect challengers with business experience and avoid incumbents in every elected office.

    2. But for some diabolic reason, the entire county gets dragged into Bissen’s House of Horrors. The Council does not truly need to wait six months for a study. There was one silver lining of the terrible fire. Affordable housing is starting to crop up all over the island. Projects that have been talked about for years are seeing movement and life. People just want to get back to reliable hours at work, jobs, stability. The pono thing for Bissen to do (now that he has the beach cleared) is to withdraw his bill. Do it, Man.

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    3. None of this report surprises me. The Maui government is scapegoating STR owners when the real issue is not approving enough workforce housing.

      Here what I’d do:
      1. Fast track everything to rebuild Lahania.
      2. Figure out the best place for two workforce housing areas and fast track development. One in West Maui and one near Kihei.
      3. Tell the world to visit Maui and encourage the biggest part of the economy.

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  15. The more I learn about the Mayor’s proposed STR ban, the more the ‘fishing for housing’ initiative by Maui Strong looks like a contrived event. Never let a catastrophe go to waste.

    I wonder about the names of the people who orchestrated the event and the proposed STR prohibition.

    The fire victims were victimized not only once, but they will be victimized twice if the Mayor’s proposed STR ban is adopted.

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    1. “Our Hawaii PAC” used the fire to fundraise for political purposes. The money is going to their candidates, not fire victims. But it was all done on backdrops of Lahaina burning, so that contributors were misled. The same PAC bought Lahaina Strong t shirts and fundraising gear.

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    2. So true. Many of the properties lost were uninsured, underinsured & or had illegal rentals; such as the 13 bedroom, 3 bath homes we are all aware of. Homes with non permitted add ons & undeclared rental income skating paying taxes. We can only guess that the names of these folks comprises Maui & Lahaina Strong. So many refusing to be housed elsewhere & complaining about their hotel life. Many still not working although there are currently many job positions open. This is unfair to the responsible, hard working residents & businesses as well as our much needed visitors. The state should go after the illegal activity first before attacking our economy. Then again they would have to start cleaning house at the top.

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    3. D
      I’ve started questioning the Lahaina strong and Maui strong working relationships with the mayor. Seems very cozy and huge sums of donated money.

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  16. Now I am left wondering why $300,000 would be spent on a new study when such a recent legitimate study of the impact is available? So frustrating to witness this, when it is so clear to so many that the “powers that be” are trying to go in the wrong direction again.

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  17. BOH,

    It would be nice if you could increase the allowable size of posts. Say 1,000 vs the current 750 characters.

    Mahalo,
    Rod

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          1. Maybe that’s why Brother Carl had me stand in the corner with a dunce cap in my junior year of high school!

            He didn’t think I was that funny.

            One day, right after Parents/Teachers night, in front of the entire class, he said to me, with his lips vibrating: “Walsh, how could such a bastard as you have such a nice mother.” No reply; all I could think was, “Thanks, Mom, I’ll finally pass German.” And, I wondered if that was approved language for a Catholic brother.

  18. “With these earlier analyses now becoming more visible amidst renewed scrutiny of vacation rental policies on Maui, stakeholders and policymakers are faced with reconsidering the appropriateness of such drastic measures and how they could significantly reshape the economic landscape of Maui for years to come.”

    I commend your phrasing here, BOH. You affirmed that it isn’t that the policymakers didn’t Know about these earlier analyses, it is that the analyses are now becoming More Visible, so they feel compelled to regroup. That’s why the study was ordered, and that’s why a recent Maui Planning hearing scheduled for June 10 was cancelled.

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    1. Exactly right, Pat!
      Over 200 people submitted or were about to submit testimony to the Planning Commission’s June 10 meeting to object to a single sentence in the South Maui Draft Community Plan: “phase out short term rentals to create more long term rentals.” Those five volunteer Commissioners (should be 9) may be realizing for the first time what deep water they are wading in. This time, many of us won’t stand idly by while the mayor and certain council members attempt to sabotage the island’s future and economic well being.

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      1. What does Lahaina Strong want? One word: More. Or if you prefer, 2 words: Not Enough. Eventually even those in power whos hearts bleed the most will have to say no or no more. The question is where will that line be drawn?

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        1. A movement becomes a business and degenerates into a scam. History repeats itself. And most people don’t understand it. But it’s repeatable and predictable.

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