HONOLULU (AP) — In a significant move aimed at addressing a critical housing shortage, lawmakers on Maui passed new legislation on Thursday to reduce the number of vacation rentals on the island. This decision comes in the wake of a devastating wildfire that destroyed much of Lahaina two years ago. The new bill represents a growing trend among popular tourist destinations to combat the encroachment of vacation rentals into residential areas, which has been causing strain on local communities.
The legislation, approved by the Maui County Council's housing committee with a 6-3 vote, aims to close a loophole that currently allows owners of condominiums in apartment zones to rent out their units for short periods, specifically for less than 180 days. Instead, the new rule will mandate longer rental durations, beginning in West Maui, including Lahaina, in 2028, while the rest of the county will have until 2030 to comply. The committee's decision is a strong indicator of expected support from the full council, which is comprised of all nine council members who recently voted on the bill. Maui’s mayor, Richard Bissen, who proposed the legislation, is anticipated to sign it into law.
Mayor Bissen emphasized that Bill 9 represents a crucial initial step in the effort to prioritize housing for local residents. "It’s a commitment to create a future where our keiki can live, grow, and thrive in the place they call home," he stated. Currently, short-term vacation rentals account for 21% of Maui’s housing stock, which poses challenges in a county with a population of approximately 165,000 people.
According to an analysis by economists from the University of Hawaii, the new measure could potentially add 6,127 units to Maui's long-term housing supply, thereby increasing it by 13%. However, some opponents of the bill raised concerns about whether local residents would be able to afford these condos, as many units are located in aging buildings with high associated costs, including mortgages, insurance, and maintenance fees.
Alicia Humiston, president of the Rentals by Owner Awareness Association, argued that the legislation could negatively impact essential service providers, including housekeepers and maintenance workers. "It’s not what’s best for the community," she said, highlighting the potential consequences for small businesses that rely on the vacation rental market.
The mayor’s proposal followed significant activism from wildfire survivors and advocates who demanded changes after their experiences during the crisis. A University of Hawaii study indicated that the conversion of vacation rentals to long-term housing could equate to a decade’s worth of new housing development. The study also forecasted a potential drop in condo prices of 20-40%, a decrease in visitor accommodations by 25%, and a 15% decline in visitor spending, with a projected contraction of the gross domestic product by 4% for the county.
Addressing these economic implications, Mayor Bissen argued that the analysis fails to capture the broader consequences of high housing costs on local families and the community's cultural fabric. He stressed that while tourism is integral to Maui’s economy, it should not come at the cost of "hollowing out our neighborhoods." He noted that although visitor spending may fall, a significant portion of this income is already leaving the island since around 94% of vacation rental owners in apartment zones do not reside in Maui.
The mayor’s office indicated that despite the anticipated decline in tax revenue, estimated at $61 million annually, the county budget could absorb this impact. Bissen framed the legislation as part of a larger strategy focused not only on converting vacation rentals but also on building new housing, investing in infrastructure, and clamping down on illegally operated rentals.
