Permitted short-term rentals provide tax revenues and jobs

Viewpoint

A question in The Maui News’ “Ask the Mayor” column of Aug. 21 concerned why Maui County continues to grant permits for short-term rental uses when the island continues to have a resident-housing shortage. While the mayor’s answer dealt with

ongoing efforts to build new housing, and that really is the only way to help address Maui’s housing shortage, it did not address the issue of permitting short-term rentals.

My answer would be that it is much better to have legally permitted short-term rentals than unpermitted short-term rentals. And the fact is that most of the properties permitted for short-term rentals would never be offered as “affordable” rental housing.

Maui has had short-term rentals since the 1970s and they have long been a significant part of our economy and visitor industry. The $78 million in real property taxes paid by Maui’s 12,000 legal short-term rental condos and permitted homes amounts to quadruple the amount paid by all the hotels added together and amounts to nearly triple the amount paid by all 26,000 Maui homeowners combined. The visitors who stay in these legal vacation rentals contribute the largest amount of visitor spending on the island.

In recent years, the internet has changed the way all short-term rentals are advertised. Today, thousands of condo unit owners, bed-and-breakfast owners and short-term rental-home owners advertise their short-term rentals individually on sites like VRBO, Airbnb and TripAdvisor. And many will advertise the same rental unit on multiple sites. So the increase in the number of listings found online does not necessarily mean that more units are being rented, just that they are now being advertised more widely.

Short-term rental uses taking place in single-family homes in Maui generally require a permit to legally allow such uses outside the hotel district. And Maui offers two types of permits: B&B permits that allow property owners the ability to rent rooms, or dwellings, on the lot where they live full time, and short-term rental home permits that allow owners to rent entire dwellings under the management of a licensed professional property manager.

The County Council placed strict qualification criteria and caps for the maximum number of permits allowed in each community plan district that ensure less than 2 percent of Maui’s single-family housing may be permitted for this use. These permitting rules and caps were developed following many hours of public input and comments before the council.

A worldwide demand exists for short-term rentals in single-family homes. Twenty-eight years of history has shown that lacking legally permitted short-term rental accommodations, the use will still take place, except it will be in unpermitted, and sometimes unsafe, dwellings. It is important to recognize that the short-term rental permit itself is not driving this use, but rather provides a means to ensure that this use is taking place in properties that have been vetted and is being conducted with rules in place to minimize any potential impacts to the island or to neighbors and that the property and revenues from the rentals are being taxed appropriately.

While unpermitted short-term rentals continue to be a problem that the county has failed to effectively address, the fact is that legally permitted short-term rental uses are taking place in less than 1 percent of Maui’s single-family homes and is not a primary cause of our housing shortage. And the permitting process helps ensure that these uses are taking place in areas and homes where the use is appropriate. But without a permitting process for short-term rentals, this use would not go away. Instead, it would continue in only unpermitted properties and that would fail to serve the people of Maui and its visitors.

* Thomas Croly lives in Kihei and is a permitted bed-and-breakfast owner and board member of the Maui Vacation Rental Association. He participated on behalf of the MVRA in the creation of the B&B and short-term rental home ordinances.

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