HONOLULU– Alicia Humiston bought her condo in Lahaina after visiting Maui and falling in love with its rainforests, lava fields, and whales that congregate offshore. She travels there about three times a year and rents her unit for short periods when she’s not in Hawaii.
“Maui was my dream place,” she said in a phone interview from her home in Coeur d’Alene, Idaho.
But now Maui’s mayor wants to make it impossible for Humiston and thousands of other condo owners to rent their properties to tourists. Instead, he wants them to be rented long-term to Maui residents to address a chronic housing shortage that reached a new crisis point after last August’s deadly fire burned the homes of 12,000 residents.
The mayor’s proposal faces several legislative and bureaucratic hurdles, starting Tuesday with a meeting of the Maui Planning Commission. However, it inflamed an already heated debate about the future of one of the world’s best-known tourist destinations: Will Maui continue to serve the tourists, who drive the local economy? Or will it restrict tourism to respond to persistent complaints that visitors are overwhelming the island’s beaches and roads and making housing unaffordable?
About a third of Maui visitors use vacation rentals. They tend to cost less than hotels and are easy to book on sites like Airbnb and VRBO. Many have kitchens, so families can prepare their own food.
They also became a source of conflictespecially after last year conflagration in Lahaina – the deadliest wildfire in the US in more than a century. The fire devastated the historic city, killing at least 101 people and leaving only rubble and ash in the blocks. Thousands of displaced local residents were temporarily housed in hotels normally reserved for tourists, and most survivors still do not have stable housing.
Even before the fire, the University of Hawaii researchers say So many homeowners were renting to tourists — and so little new housing was being built — that Maui County has suffered a net loss of housing since 2019.
An analysis of property tax records shows that 85% of Maui County’s condominiums are owned by out-of-state residents, said Justin Tyndall, assistant professor at the University of Hawaii Economic Research Organization. Their transition would increase Maui’s residential housing stock by 13 percent, which Tyndall said would almost certainly lead to lower purchase prices and rents.
Maui Mayor Richard Bissen believes that under his proposal, these lower rents would keep local residents on Maui because absentee landlords would be forced to sell their units or convert them to long-term rentals.
There are 7,000 condominium units in apartment zones, including 2,200 in West Maui near the Lahaina burn zone, and represent about half of Maui’s legally operated short-term rentals. If enacted, the change would take effect in West Maui by July 1, 2025, and January 1, 2026 elsewhere.
“We understand that there will be a give and take. So the question is: what is more important?” Bissen said at a press conference last month. “My priority is housing our local residents – especially now.”
Humiston, president of the Hawaii Rental By Owner Awareness Association, which opposes the bill, will not sell his oceanfront one-bedroom condominium he bought two decades ago if the bill becomes law. She also doesn’t plan to rent it long-term.
“It would require my ability to use my property. And I bought it for my use,” she said. “I love it there.”
Some warn that reducing the supply of lodging for visitors will ruin the tourism industry on which Maui’s economy depends, although supporters of the mayor’s bill say many vacation rentals will remain and hotels will have empty rooms in which guests visitors will be able to stay.
Hawaiian economist Paul Brewbaker calculates that changing the rules for the affected units, which represent a third of Maui’s visitor accommodations, would result in 33% fewer tourists and cost Maui 14,000 jobs. He called it a “slow-motion train wreck” that would lead to an “economic crash and fire.”
Maui County Chair Alice Lee said that while housing for residents is a real concern, the council must also consider legal challenges from property owners and the potential impact on tax revenues.
The county collects $500 million in property taxes annually and more than 40 percent comes from short-term rentals, which are taxed at a higher rate than owner-occupied homes, she said.
“We are being sued by over 600 people in relation to the fire. We have many pending cases. Do we really want to put ourselves in a position to invite thousands more?” Lee said. “I really don’t think so, because my main concern right now, right now, is paying the bills and keeping the lights on.”
The county budgeted $300,000 to study the bill’s impact on tax revenue and on businesses such as landscaping and cleaning services.
Jeremy Stice, a real estate agent born and raised on Maui, and his wife spent 12 years building a company that now manages more than 40 vacation rental properties, most for other owners. About half of them would be affected by the measure, said Stice, who is also president of the Maui Vacation Rental Association.
Stice isn’t sure local residents would buy — or be able to afford — short-term rental units even if they became available for permanent housing.
For example, a studio in Papakea, one of the condominiums targeted, would sell for about $600,000, he said. A 30-year fixed mortgage at current interest rates, plus homeowners association fees, would total about $5,000 a month for a small space, he said.
If locals don’t buy them and tourists don’t rent them, it’s possible the units will sit virtually empty as second homes for wealthy absentee landlords — an even worse outcome.
To avoid this, the county should increase taxes on second homes, create incentives to promote long-term rentals and prioritize new housing construction, said Matt Jachowski, a Maui housing data consultant.
“The only way out of this housing crisis is to do everything – do everything in our power to add more housing for residents,” he said.
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