Maui took yet another clear step toward phasing out thousands of vacation rentals this week, and the vote was not close. The Planning Commission rejected a proposal that would have allowed roughly 4,500 apartment-zoned vacation rentals to continue operating under new hotel-style zoning, with only one commissioner voting against recommending denial.
For visitors who have stayed in the same Kihei or Kaanapali condo for years, this wasn’t just another zoning item on an agenda. It was another sign that many of those units are still heading toward a shutoff date and that the effort to carve out a large exception just got shut down again.
What the commission killed this time.
Bill 9 set this entire fight in motion when it phased out roughly 7,000 apartment-zoned short-term rentals across Maui over the next several years, with West Maui beginning in 2029 and South Maui following by 2031. These are long-standing condo complexes that have operated legally for decades, paying taxes, marketing openly, and serving vacation rental visitors.
The proposal before the commission would have created two new hotel zoning districts covering a large share of those complexes, effectively giving away thousands of units to keep them rented to visitors.
Property owners and supporters argued that these buildings were designed and sold for use by Maui visitors. They talked about cleaners, handymen, and many other residents who depend on these units for their livelihoods. They pointed to county tax dollars tied directly to visitor stays and warned that pulling thousands of units out of circulation would reach well beyond individual owners and local service providers.
The commission’s vote did not resolve any of that conflict, while it did move Maui further down the path that the council chose when it first adopted Bill 9.
Opponents pushed back hard. They said the council already made its decision when it passed Bill 9 and that creating new hotel categories now would undo that choice.
These opponents view Bill 9 as a necessary correction after years of being unable to find a place to live, describing friends and family who are still struggling to secure stable housing since the fire. They urged commissioners not to weaken a policy they believe could free up units for long-term residents.
Several speakers tied their testimony directly to the Lahaina fire, which killed 102 people and left thousands displaced. They argued that housing must come first, even if that means fewer units available to Maui visitors. The commission sided against the zoning change, making it more difficult for the Maui County Council to reverse its course or create a broad carve-out once again.
The Maui vacation rental phase-out timeline is still in place.
Without the new zoning districts, the original Bill 9 timeline stands, and owners, managers, and repeat visitors will now have to deal with that reality rather than hope for the large exemption.
The affected units sit in some of Maui’s most recognizable visitor areas, including Kaanapali and Kihei, where these condo resorts have long offered an alternative to hotels with full kitchens, multiple bedrooms, and extra space for families traveling together. Many returning visitors return to the same units year after year and say that without vacation rentals, they would not vacation on Maui.
Now that inventory will shrink as apartment-zoned condos gradually leave the short-term market. That is, unless the law is changed or struck down in court. What changes is the mix and the range of choices available to visitors who prefer condo-style stays.
Fewer units in certain locations and especially in the lower price ranges likely mean more pressure on what’s left, especially during peak travel periods and in areas that have relied heavily on these apartment-zoned vacation rentals.
Maui lawsuits are already in motion.
Legal challenges to Bill 9 have been filed, with property owners arguing that the phase-out plan violates their rights and amounts to an unlawful taking. Those cases will not move quickly and will not be cheap. Defending the law will cost the county, and if the county loses or is forced into settlements, taxpayers will also feel that impact.
At the same time that apartment-zoned units leave the short-term market, traditional hotels will face less competition from condos. That reality has not been front and center in the public debate, but it is nonetheless part of the shift underway as Maui attempts to reshape its entire visitor market.
Where this leaves visitors and residents.
The Planning Commission’s recommendation does not end the issue, as the Maui County Council can still act, and the courts remain the most likely source for ultimately shaping the final outcome.
What changed this week is that the largest and most visible effort to preserve thousands of apartment-zoned rentals was voted down, reinforcing the direction already set by Maui’s Bill 9.
For visitors who prefer condo stays over hotel rooms, thousands of units that have long served tourists are still on schedule to exit the market over the next several years, barring a significant policy change or court intervention.
For residents who have pushed for more housing inventory, this vote signals the island is continuing on the path it chose when it adopted Bill 9. But whether any of the units being reclaimed by this week’s change will ever become available to resident families is totally unclear.
Do you see this as long-overdue housing reform, or as Maui dismantling something that worked?
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Can Hawaii possibly be more mismanaged (corruption) than it currently is? The answer is of course it can…
We come to Maui when we can. Usually stay at a timeshare or rental at Papakea. So just as a test I decided to see what a Costco package would cost. R/T on Alaska Air economy for 2 + regular car + 1 week at Kapalua Bay = $18,136. I am not making this up. Wondering how this is going to play out. Doesn’t look good for anyone residents or tourists. I appreciate Beat of Hawaii’s reporting
This is a tragic bait and switch driven ultimately by the hotel industry who are wired to Green, Bissel and dark money Pacs (Lahiana Strong). Those condos sit on high value, beach front property. With no STR monies, hope is that owners will be forced to sell – then the big hedge funds – Blackstone, Goldman et al move in. These condos have very small footprint 600 to 900 square feet, studio or one bedroom. No suitable for families, particularly multigenerational. However, the current mayor’s race would suggest that its not just the owners who are organizing, but also the many whose independent business and/or livlihoods which would be affected.
Larry Ellison already owns nearly all of Lanai.
Soon, guys like Ellison, Zuckerberg, Gates, and Blackstone-style holding companies will acquire most of Maui.
Hawaii’s future appears to be a playground for the super-rich and their servants.
It was nice while it lasted…
As a mainlander, I can’t wait to take advantage of property in Maui again. Bought a foreclosure way back when and sold it a few years ago. Now Maui County is cheapening property and I’ll buy a cheap condo, once this nonsense goes to court, I’ll sell it for a 6 figure profit… thanks Maui County.
What I don’t understand is some HOA fees for these units are thousands of dollars a month. How is a resident working at a hotel going to be able to afford this? As is, tourist are paying this cost.
Very stupid bill and law. Just build more new homes instead of hurting the economy.
So the owners of these condos should be paid the market rate by The State of Hawaii, (appraised as a rental property), then the state could resell these units to residents at a price they could afford, kind of like how Hawaiian homelands program works. (It’s a dysfunctional program, but better than no program.)
The State should fund this using the hotel transient accommodations tax. Eminent domain should be less costly and quicker than all of the law suites and years of fighting this current decision making will produce, which in the mean time will provide no additional housing to the people who need it.
I can’t tell you how upsetting this is to condo owners who bought short-term rentals in good faith and now face this ridiculous decision that ultimately takes their “property rights” away. So much for “Aloha.” They have certainly made so many travelers feel unwelcome. I think they will regret it in the long run.
(Forgive my ranting, but this seems so wrong.)
Oh How I agree Kathy. We had our condo 19 years, all paid for and enjoyed it several months each year. After the fire we pondered three months over what we could see happening and speculated what was to come. We listed it 2/26/24 and sold it the next day. My wife cried, however we are so grateful we got out when we did. The cost of ownership is through the roof and the bottom isn’t in sight.
So, the short version is that they decided to drive the bus off the cliff. Planning on a farewell to Maui trip this year. After that, I’m moving on (after 2 decades of annual trips). It’s been real. My heart aches for what has happened to Hawaii. But at some point, you need to adapt and move on. There are lots of places on the planet with palm trees and blue water. The elites can now take over this particular paradise in full. Have at it, folks. I’ll be diving in Belize.
This is so disturbing. Once people get used to a vacation stay with a kitchen, separate bedroom, and likely laundry facilities, I don’t think there’s any going back to a hotel room with just a mini-fridge. Especially for 2-3x the cost per night. We are among the tourists who simply are not going to spend $600-800/night for a hotel room. It’s hard to imagine what will happen to tourism Maui. Will more hotels be built and with the excess of rooms, rates go down? I doubt it. Further, I don’t see locals moving into these condos – either due to lack of space for a family or due to the high cost I suspect owners will charge. Where is the brain power in Maui County that can come up with real solutions?
It actually isn’t hard to imagine what will happen to tourism on Maui because the issue has been studied extensively by real economists. Maui will lose nearly a billion dollars in annual tourism revenue, 5,000-10,000 jobs will disappear, and tens of millions of annual tax revenue will evaporate. It will be an unmitigated disaster.
For all visitors, tourists. Who or What can you trust in Hawaii anymore? IMO the state wants you to think the hotels are a safe bet while str, condo, apartment rentals are an unsafe, unsure, non existant option. IMO you are placing your money in Hawaii’s peribial paradise slot machine where Hawaii wins and the tourist loses even though gambling is illegal in Hawaii. People have stated pay more for paradise but is paradise a place where you get ripped off and taken advantage of in state mandated fee’s?
My untutored but a little informed guess is that if/when this gets to federal courts, the owners will lose in Hawaii, it will get appealed to the ‘mainland’ (cancelled word maybe), and the valuations of the takings will be far higher. Reversals ensue. Heaven’s knows how much ‘paper value’ has been lost by the owners. I assume many owners could be corporations or non-residents….but….jeepers, Hawaii is a State, I think. And only a small number of Hawaiians want to change that. Hawaiians can buy and invest in other states, last I heard.
Maui is going to destroy the economy that supports the residents of the County, especially since agriculture was run off by tourism. When the tourism dollars slow, how will County residents afford these new properties if they even do appear on the market? How will County residents afford the new properties necessary tax increases to keep the infrastructure running, since visitor numbers will decline? I understand some of the sentiments but question the resulting outcomes of such policies.
One possibility of course is that the values will sink a great deal as thousands are put on the market. If non residents buy them at the low prices (possible…isn’t it?), more ‘laws’ will be needed to stop that. The rents could sink a lot due to supply/demand issues. This is not pandora’s box, since we know what is in it, and the butterfly or whatever will not be so nice as ‘hope.’
Maui will be taking a huge step backwards if these short term rentals are removed. If there were no demand why do so many of them exist? Maui will lose many tourist dollars, along with tax revenues and hundreds of repeat visitors who refuse to stay in a resort setting.
I’m sad to say that I’m sick of all of this. Sick of what’s happening to Maui and the other islands. The condos that we’ve loved and have visited for decades in Kahana is on that list of “too bad, so sad, you ain’t staying here anymore”. I get why and it’s my prerogative to dislike it, disagree with it and condemn it.
We live in a beautiful state and have been spending our $$$$ in our state. We will continue to do so. We’ve been unsubscribing from all of our Hawaii related social media and email contacts.
What I once considered to be a place of self centering, enrichment in the culture and what it meant to us is no longer. Self serving? Some will say that it is. That’s fine. The world is jacked up and jacked up includes Hawaii.
1) anyone at the county know math?
2) who’s paying for the lawsuit, because it better not be my tax dollars!
3) who’s moving their family into a 1 bedroom condo for $5k a month
4) anyone paying attention here – those STR’s and taxes Subsidize owner occupied so we’re not all paying 1%+ like the mainland
5) Facts Over Feelings
Get it together Maui, you’re literally not solving anything but creating a void in revenue. You want to do something? Create business incentives here. Not rocket science.
1) if somebody at the county knows math, they aren’t speaking up.
2) your tax dollars will pay to defend the lawsuit and when the county loses and a billion dollar plus judgment is entered against at the county for 5th amendment takings, the county will be 109% screwed since it doesn’t have a billion dollars+ to spare.
3) nobody is. This won’t create any long term housing. None. It’s not about housing. It’s about eliminating the competition that the hotel industry doesn’t want.
4) yes the taxes on vacation rentals is the county’s largest source of tax revenue and the county cannot afford to lose half of the vacation revraks which pay property tax rates literally 6 Times higher than owner occupied.
5) you’re correct, the proponents of this push are a bunch of corrupt idiots.
2) who’s paying for the lawsuit, because it better not be my tax dollars!
We are, just like we paid for the injection wells fight that the county was Never going to win, but they took it to the Supreme Court anyway. That was Never going to end in anything but affirmation of the fines on the county, plus the legal costs. Did anyone learn anything from that? Anything? No. I mean, I re-learned we are governed by a bunch of idiots and buffoons, but they did not learn a dang thing.
Is there an online list of those properties somewhere
Google Maui Minatoya list
When the owners of these condos purchased them I assume the zoning was already zoned “apartments”. If so then the owners were taking a risk upon themselves in their ownership. I hope the closing attorneys on these closings were very clear in drawing attention to this risk. Otherwise there is another avenue for lawsuits.
For those of us who want to get in one or two last trips to Maui before the Minatoya affected condos go away, expect to find units getting shabbier and more poorly maintained. Why would owners upgrade equipment or replace worn furnishings if their condo is going to be taken in a few years?
Also, besides hotel rates climbing as competition goes away, expect rates at the remaining short term rentals to climb as well.