WAILUKU, Maui (KHON2) — It was a full house at Maui County Council’s Housing and Land Use Committee hearing today as members heard testimony on a controversial bill to phase out thousands of vacation rentals.
Bill 9 seeks to phase out about 6,000 short-term rentals in apartment zoned districts, also referred to as the Minatoya List properties, and turn them into long-term housing for residents.
On Monday, 176 people signed up to testify, and the council only heard 52 testifiers.
Most of the properties are in South Maui, West Maui and Maalaea.
Mayor Richard Bissen introduced the bill a year ago after the Lahaina fire brought the housing crisis to the forefront.
On Monday, he called the housing crisis the worst the county has ever seen.
“As mayor, my responsibility is always to put our residents first,” Bissen said. “Housing isn’t a speculative asset, it is a basic human need and when the balance tips so far that our residents become outsiders in their own neighborhoods, we have an obligation to act.”
He said the county could not keep doing what it has been doing and expect a different result. “This housing crisis requires bold decisive action,” he added.
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“Can we truly say we are thriving if our own people are being priced out of our own community?” Bissen continued.
The Mayor’s executive assistant said that in West and South Maui, just four out of 10 new homes built are for residents.
The county said 2,275 West Maui rentals are part of the 6,000 units on the Minatoya List and that it would take 30 years to build that many new homes in West Maui.
“The reason we’re looking at condos is because the situation with our single-family homes is so out of control for our residents,” said Matt Jackowski. Mayor Bissen’s executive assistant.
He said Maui saw all time highs for prices in 2024 and that included adjusted inflation.
“A home in west Maui costs $1.9 million, that is 20 times more than what a family in West Maui earns in a single year, that is completely unaffordable to them and south Maui isn’t much better,” he added.
He also noted two buildings in West Maui, one that was built before the Minatoya list, and one built the following year after it made short-term rentals illegal, that look almost identical.
He said the one with short-term rentals uses about 570 gallons of water per day, and the one with long-term rentals uses about 128 gallons per day.
“TVRs use 60 to 120% more water than resident condos in a course of a year,” he added. He also said the lack of water in West Maui is also what is blocking new housing from being developed in the area.
“If we converted 6,000 units we wouldn’t just get 6,000 resident homes, we would get more water for new resident homes,” Jackowski said.
He said the TVR phaseout is the only solution that accelerates resident housing by decades.
“Even with current reduced values of condos, locals aren’t rushing out to buy them,” said Steve Hogan, who owns three rentals that are on the Minatoya list. “With the HOA fees, utilities, increased insurance cost, special assessments, these condos are more expensive than the average resident can afford.”
The county said 94% of the 6,000 short term rental owners don’t live in Hawaii and said much of the lost lodging money was never going to stay on Maui, because the owners don’t live on Maui.
The county said the administration is ready to propose tax adjustments to offset the cost of lost revenue. The county also said workers at STR’s can work at the other 8,000 legal short-term rentals on the island or work at the hotels that offer competitive pay and benefits, and that an economy that prioritizes resident housing will be more sustainable in the long-run.
They also argued that the high costs are a symptom of inflated vacation rental prices and cannot build fast enough to meet the scale of demand the county is facing.
Testimony will continue next week, June 18, at 9 a.m.