Maui had taken the front seat in leading the charge to eliminate vacation rentals following legislation approved yesterday. It will be signed into law by the Hawaii governor today.
With significant legal challenges also on the horizon, the path forward is not certain. What is clear is that Hawaii wants to move towards a future where tourism interests will take a back seat to the needs of residents.
Maui is already moving at breakneck speed to change Hawaii’s vacation rental market. Following yesterday’s passage of Senate Bill 2919, which grants local counties the power to regulate or even eliminate short-term rentals, Maui Mayor Richard Bissen has announced brazen plans to significantly reduce the number of vacation rentals on the Valley Isle.
In a decisive move just following the bill’s approval by the legislature, Mayor Bissen proposed local legislation aimed at eliminating more than 7,000 vacation rental units by January 1, 2026. This strategy first targets units in West Maui, which is the area most heavily affected by the housing crisis made worse by last year’s devastating wildfires.
The current plan targets about 7k Maui vacation rentals.
Mayor Bissen, who spoke alongside leaders of the grassroots organization Lahaina Strong, emphasized the urgent need for long-term housing solutions for Maui residents, particularly those displaced by the wildfires. “We cannot wait as more families uproot and move away,” said Bissen during a press conference. He signaled a strong commitment to prioritizing resident housing over tourism.
The official list of short-term rentals to be removed includes well-known vacation rental resorts, as you can see in the references below.
This latest Maui initiative is not without significant challenges.
The proposed changes are expected to have big economic impacts, including potential job losses in multiple areas related to vacation rental support, as well as decreased visitor spending.
There will also be a significant reduction in property tax revenue from these vacation rentals, which currently are a major financial support for all of Maui. Bissen acknowledged these challenges while maintaining that the priority must be to “house our local residents, especially now.”
The bill will next move to the planning commission for Maui, Molokai, and Lanai islands. It will need approval by the county’s Housing and Land Use Committee as well as by the full county council, all of which are expected. There will also be public hearings which you can undoubtedly expect to stir contentious debate due to the strong divisions on Maui about this.
Governor Josh Green voiced his support but will take a back seat.
While Green supported and will sign for the legislative changes, saying that reducing the vacation rentals could alleviate some of Hawaii’s housing issues, he has turned this back to the counties, which will be on the front line for the myriad of pushback that this plan will result in. Nonetheless, Green’s commitment is to sign the bill into law and thus empower the islands to tackle Hawaii’s housing crisis.
As Maui takes these significant steps, this issue has now moved into the national spotlight. This, together with similar steps in other tourism-dependent markets, could set precedents for successfully balancing economic interests with residential housing needs.
Which Maui vacation rentals are set to be eliminated.
If approved, the proposal is to eliminate the vacation rentals listed in the Maui County document referred to as Minatoya list of TVR’s. That is referred to in the related Maui County press release. Of those on the list, there are more than 2,000 in West Maui that will cease to be vacation rentals by July 1, 2025. The remaining approximately 5,000 will terminate being vacation rentals effective January 1, 2026. Some of the vacation rental resorts listed represent as many as 400 units, while others are smaller. You can see them in the attached list.
Does this pending change impact your Maui travel plans?
Lead photo: FB
We have a 3-bedroom vacation rental condo in Kihei. Our current cost is about $4,400 per month, that includes mortgage, taxes, HOA, and electric. This does not include repairs, a/c maintenance and unexpected expenses. If we were forced to rent this long term, we would have to charge $5,000 just to break even. The alternative is selling, along with 7,000 others in the same boat. Our mortgage rate is at 2.7% which is amazing. The new owners, if someone wants to buy this and rent long term or wants to live in it, with the current rates, would have to pay much more than us.
Good bye food trucks, sunset cruises, luaus, and so on, as i am sure tourists are not going to stay at the grand wailea for $1,200 a night!
Make it make sense!!
we just bought a vacation rental condo in Kihei in January 2022. I do not believe that you fully understand the economic impact this will have on the local maui residents who rely on tourists to pay their bills. As a business person for decades who own long term rental properties in New York and New Jersey, I know that you are deliberately killing the golden goose and biting at the hands that are feeding the maui residents. you can not replace the money currently being generated via short term rental taxes. Lahaina strong organization are forcing more maui locals to go homeless and for what?
Hawaii Legal Short-Term Rental Alliance v. City and County of Honolulu et al, Civil No. 1:2022cv00247