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Economist questions hotel moratorium

Bills aim to stem overtourism, place pause on hotel building permits

A Hawaii economist on Monday questioned the timing and the reasoning behind a Maui County Council bill that would temporarily halt building permits for visitor accommodations in the tourism hotbeds of West and South Maui.

The bill would pause the development of visitor accommodations, including hotels, resorts, timeshares and transient vacation rentals, until community plans are updated for West and South Maui, or for two years, whichever is sooner. It would also give the county time to “implement critical plan action items” relating to the visitor industry’s impact on the county’s environment.

Proposed by Council Member Kelly King, who holds the South Maui residency seat, the measure says that the purpose of the moratorium is to lower carbon-emissions levels, mitigate climate change impacts and limit the rate of global warming. The bill, which is awaiting first reading by the full council, would not apply to projects that have already received certain approvals and entitlements for expansion.

While many residents and organizations have come forward in support of the bill, citing overtourism and the impacts to the local community, hotel and tourism officials have expressed concerns over the hit to jobs and the economic fallout from the pandemic.

Paul Brewbaker, principal and economist at TZ Economics on Oahu, wondered why the council would impose a moratorium on visitor accommodations now that tourism is recovering and COVID-19 vaccinations are rolling out.

To shut down opportunities for investment when property owners “are inclined to engage at this particular moment when we are just getting things back on a roll, seems out of sync to me, to have that happen at this particular moment, that’s just the timing question,” Brewbaker said during the Maui County Council’s Infrastructure and Transportation Committee meeting Monday morning.

Brewbaker said that in the last 30 years, hotel units have grown from around 19,000 to 22,000 for Maui island and that hotel rooms for Molokai have actually decreased since the Sheraton left the Friendly Isle.

“Today, all of the growth in the lodging inventory are coming from vacation rental units,” he said.

Brewbaker added that the council wouldn’t have to impose a moratorium in order to launch a study on the impacts of tourism.

“That investigation can occur while an industry is actively operating,” Brewbaker said. “Does someone have to shut down for two years for research to be undertaken?”

Council Member Mike Molina pointed out that the county had a hotel moratorium back in the 1990s when a proliferation of hotels began to concern the community. After the moratorium was lifted, the industry did “bounce back,” Molina said.

“It’s a very different moment in time,” Brewbaker said, pointing out that from around 1980 to the 1990s, Maui saw a jump in lodging units from an estimated 9,700 to about 19,290 — more than double in a decade. The moratorium came at the peak of a cycle, unlike what the county has seen in the last 30 years, with much slower hotel unit growth, Brewbaker added.

The 1990s were also a time of economic stagnation in Hawaii and a financial crisis in Asia, and then-Gov. Ben Cayetano had appealed to an Economic Revitalization Task Force to restart economic activity, Brewbaker said.

While some residents felt that having no visitors during the pandemic was a benefit, it was also a hit to the economy, with nearly one in four people in Hawaii’s workforce unemployed, Brewbaker said. Maui had some of the highest rates of unemployment, according to state labor data.

Council members, however, pointed out that the issues went beyond tourism. Council Member Tamara Paltin, who holds the West Maui residency seat, said that quality of life, more cars on the road and a lack of affordable housing should also be factored in. Traffic has long been an issue, often leaving locals with no spots on the beach.

“It’s the visitors that come and purchase housing that locals cannot afford,” she said.

With no action scheduled on Monday, the matter was deferred. The committee is discussing the subject but not voting on it; the Climate Action, Resilience and Environment Committee on May 25 voted to recommended passage of the bill to the full council.

Council Vice Chairwoman Keani Rawlins-Fernandez also recently proposed a bill that would extend the moratorium islandwide. The measure, introduced at the Climate Action, Resilience and Environment Committee last week, would maintain the number of current tourist accommodation units until the council passes legislation implementing recommendations presented by a council-established Tourism Management Temporary Investigative Group, or in two years, whichever is sooner. The matter was deferred at Wednesday’s committee meeting.

Rawlins-Fernandez will propose a new version of the bill that should be on the full council’s agenda on June 18. It is scheduled to be referred to the Maui Planing Commission as it would only impact Maui island.

From there, the panel would have until Sept. 7 to take it up and schedule a public hearing. The bill would then head back to council for first and second reading.

* Melissa Tanji can be reached at mtanji@mauinews.com.

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