In a recent Maui News story about the ongoing vacation rental debate, a testifier was quoted as complaining that Maui Realtors are taking an active part in the effort to create fair and balanced vacation rental rules because “a property with a TVR is worth more.”
The statement seemed to imply it’s a bad thing if our homes have higher values because we have added improvements to them. But while Maui Realtors are certainly not opposed to homes having good value, that is not why the 1,600-member Realtors Association of Maui has made a serious attempt to constructively influence this public debate.
The Realtors Association of Maui is involved in this discussion because the sudden swing in county policy on this matter last year appeared to be arbitrary and without regard to the damage it would do to homeowners or our overall economy. RAM is also involved because Realtors believe in private property rights. Our membership identified this situation as a significant property rights issue. When we approached our state and national associations for their support, they also agreed that the right to use your property in a reasonable manner without undo governmental interference is something worth fighting for.
Our approach to this effort has been professional. We obtained the services of Honolulu economist Dr. Thomas Loudat to quantify the economic footprint of this business. Maui County estimates that last year there were as many as 1,000 properties offering vacation rental services. Taken as an aggregate, that amounts to the equivalent of two full-scale hotels. Dr. Loudat determined that this cottage industry creates as much as $319 million in annual economic activity and as many as 3,478 jobs. We have also learned since the county initiated its enforcement activity that this industry accommodates a segment of our visitors who, for a variety of reasons, won’t stay in resorts. We either accommodate them in vacation rentals or lose them. We apparently have lost many of these visitors already.
Now that our tourism industry has taken a series of body blows, the decision to dismiss this relatively small but significant portion of our tourism market had turned out to be particularly poorly advised and poorly timed. The merchants in our north shore small towns — Paia, Makawao, Haiku — are on their heels, and according to industry experts we have just begun to feel the impacts of the downturn. Molokai now only has 21 hotel rooms. The 50 some vacation rentals that had served to fill the gap on the Friendly Isle in the past have been ordered closed.
When the decision was made to shut down this industry, what was apparently ignored is the fact that an economy has grown up around these businesses, whether they were properly zoned or not. You could not close down the vacation rentals without damaging the businesses that are associated with them. RAM made that point before the damage was done. We will continue to make that same point now.
RAM also this year conducted a professional public opinion survey to find out how Maui County residents see this industry. The response was 60 percent favorable, 20 percent not favorable, and 20 percent with no opinion. Remarkably, a similar survey, conducted by the same SMS Research firm in 2002 and paid for by Maui County, came up with the same results.
Asked in our survey if they thought the vacation rental industry should banned, only 5 percent agreed. Asked if it should be regulated, 88 percent agreed.
RAM agrees that there have been cases of abuse and overreaching by some landlords, but these situations have been a tiny fraction of the total and can be resolved with proper and fair regulation and enforcement.
The real question is: Why is this an issue at all? On the Big Island vacation rentals are routinely permitted. You don’t hear any complaints coming from there at all. Kauai has passed compromise legislation. And on Oahu, the City Council is moving toward a solution to their issue.
In a Hawaii Public Radio story last week, four of the five members of the Honolulu City Council’s Zoning Committee were quoted as recognizing that the city needs to find a way to accommodate and regulate the industry. The council members said an arbitrary ban will just force them underground. City Council Members Rod Tam, Nestor Garcia, Todd Apo and Donovan DelaCruz all said it was time to find a solution and to realize that “we all have to live with each other.”
The Realtors Association of Maui is promoting the same goal for Maui County.
• Dave DeLeon is the government affairs director for the Realtors Association of Maui.
