Maui County has enough information available to move forward with a phaseout of short-term rentals in residentially zoned areas between Kihei and Kapalua — including pre-disaster Lahaina, and it must do so.
The need is clear, and urgent. The Maui County Council must bring short-term rental conversion — Bill 9 — to a vote and start the clock ticking on the transition to residential before the end of this fiscal year.
As proposed in 2024 by Maui Mayor Richard Bissen, the short-term rental (STR) phaseout could result in an estimated 6,127 conversions to long-term rentals or owner-occupied condos — that means housing for locals. The phaseout is hotly opposed by STR owners, who profit far more from transient tourists than they would from a monthly resident renter. However, an astonishing 85% of these owners are based outside of Hawaii, with many owning multiple units. These owners do not pay income tax in Hawaii and do not vote in local elections. Maui County must prioritize the needs of its constituents: residents and voters.
Phasing out STRs provides benefits of great value to residents, but it will have a cost. STRs generate profits for their owners, and jobs for those who clean and maintain them, while short-term visitors spend money on Maui that supports jobs and adds to county tax revenues. Last week, the University of Hawaii Economic Research Organization (UHERO) reported that estimated drop in spending through 2029 could be as much as $900 million in tourist money, with $60 million chopped from property tax revenues.
These figures, however, are based on tourist occupancy and buying patterns. They don’t account for the compounding costs to Maui’s residents that the current model — running the island as a vacation playground — imposes.
Making 6,127 condos available for residential use would increase housing stock on Maui by 13% — a gain that would take Maui at least 10 years to create otherwise. It would also benefit residents by reducing the cost to buy a condo — not only in the converted zones but across Maui, by relieving the extreme shortage of housing on the island.
UHERO estimates the sale price for condos on Maui could fall by 20% to 40% by the end of 2029. That’s significant. Under that scenario, an STR condo now valued at $750,000 would sell for residential use at $600,000, making ownership much more viable for residents. This estimated effect would be higher for property sales than on rental rates — but would also take pressure off the rental market, relieving some of the strain in that way.
The transition is also required because there is urgent need. Thousands of Maui residents were made homeless by the August 2023 Lahaina wildfire, and thousands remain displaced from Lahaina, but want to return. Gov. Josh Green and the state Legislature recognized this in passing Senate Bill 2919 last year, directly sanctioning the counties’ phaseouts of STRs in apartment zones.
On Maui, Bissen proposed this short-term rental phaseout last May, and it passed unanimously through the Maui, Molokai and Lanai planning commissions last summer. However, the Maui County Council has allowed Bill 9 to languish for months, seeking a consultant report that fell through, then dithering over next steps. With the release of UHERO’s report, the time has come to act.
As it stands, portions of residentially zoned Maui are currently residential deserts. As the saying goes, “there’s no there there” for locals, who make up the heart and soul of a place; instead, the developments have the character of a resort-zoned area such as Ko Olina on Oahu, with property, food and services priced up to match the resources of the vacationers who fly in and fly out.
As the transient vacationers come and go, so does much of the money they spend. Again, fully 85% of the 6,127 STRs in question are owned by nonresidents with out-of-state addresses, and that’s where the per-night lodging payments end up.
Maui has the hotel capacity to host visitors who might otherwise stay in STRs, Bissen holds — and added transient stays in Maui’s hotel zones would boost revenues and employment there, where it belongs.
“This phaseout is not anti-tourism — it is pro-resident,” Bissen told the Star-Advertiser. “It aligns with our community plans, our zoning laws, and the clear, consistent message we’ve heard from the people of Maui: Our residents must come first.”
Alternatives have been offered, such as building or otherwise creating an additional 6,000-plus homes elsewhere, or staggering the transition. But Maui’s people don’t have 10 years to wait for homes to be constructed; they need homes now.
Delay or opposition to a residential transition works against the best interests of these county residents — people who live and work on Maui, people with generational ties to the island, people who want to raise a family and see future generations live and thrive here. Council members must recognize this, and value the benefits provided by offering stable housing for residents more highly than misplaced tourism beds.
