An economic analysis of Maui County Mayor Richard Bissen’s proposal to convert more than 6,000 transient vacation rental units in apartment districts to long-term residential rentals projects the move could lead to a 15% decline in visitor spending and 1,900 lost jobs on the Valley Isle.

Based at the University of Hawai’i, the UHERO research group forecasts the result of the conversion could be worse with a decrease of 3,800 jobs.

“The scale of the policy proposal is unprecedented,” the report said.

The research group said transient vacation rentals, or TVRs, usually comprise 0.9% to 3.0% of the housing stock for cities like Boston, Barcelona and Los Angeles. According to the report, TVRs account for 21% of all housing units in Maui County.

In a statement, Bissen said the proposal is not meant to be anti-tourism but is pro-resident.

“We welcome visitors — but not at the cost of displacing those who call Maui home,” Bissen said. “The cultural and social costs of inaction are too high. Protecting our people and preserving our quality of life is not just good policy — it’s a moral responsibility.”

Bissen acknowledged that the transition would bring challenges, but the mayor contends delaying action will only make those challenges more severe.

Furthermore, Bissen said the plan to curtail TVRs aligns with community plans, local zoning laws and “the clear, consistent message we’ve heard from the people of Maui: Our residents must come first.”

“With a clearer picture of the economic implications, we look forward to continued, informed discussion on Bill 9,” Bissen said while urging Maui County Council to schedule the bill for consideration in the Housing and Land Use Committee as soon as possible.

“Maui’s future depends on the choices we make today,” the mayor said. “I believe this is the right decision — at the right time — for the right reasons.”

According to UHERO, there are policy alternatives that would have less of an impact on the visitor market, including imposing tax increases on TVRs, such as a tiered approach where properties in higher-demand areas face steeper increases. The proceeds from the taxes could be put toward an affordable housing fund.

The group also mentions an “auction approach” that would cap the number of TVRs and auction the licenses to the highest bidders.

In response to the UHERO report, Bissen said that while economic models can be helpful, they cannot be used alone to shape the future of the community.

“It’s about restoring housing to residents, honoring the intent of our residential zones and reducing our over dependence on tourism,” Bissen said of the proposal.

“(Economic models) do not reflect the lived experiences of our residents — the families crowded into multigenerational homes because younger generations can’t afford their own, the workers commuting long distances or leaving Maui entirely, and the growing strain on our infrastructure and sense of place,” he added.

Bissen said the proposal is just one piece of a broader strategy to address the housing crisis.

He said his administration is also exploring affordable housing programs, policy reforms, tax incentives, deed restrictions, expedited permitting infrastructure investment and new housing development.

“No single solution will solve this crisis, but together these efforts build a strong, long-term path forward,” he said.

According to Maui County spokesperson Laksmi Abraham, TVRs have distorted the long-term housing market by removing residential units from local use.

“Many apartment-zoned buildings now function as defector hotels, displacing local families and contributing to record high rents,” Abraham said.

University of Hawaii economics professor Peter Fuleky, a spokesperson for UHERO, said the report tried to look at all aspects and estimate the impact given the available information.

“It’s up to the policy-makers to make decisions,” Fuleky said. “This report was to provide information to policy makers who make decisions.”

The group’s review of Bissen’s proposal looks at his idea to improve housing affordability by phasing out TVRs in apartment districts, including the removal of long-standing exceptions for pre-1989 properties known as the “Minatoya list.”

The group said some TVR owners may decide not to rent their units to residents and leave them vacant for their own part-time use.

“Without additional policies, some units may remain vacant or be resold as second homes rather than entering the local housing market,” the study said.

The study also suggests raising taxes on properties that remain vacant for most of the year, particularly those held as vacation homes or for speculation.

The group said cities such as Vancouver and Paris have similar taxing policies on vacant homes, and Honolulu is considering similar legislation.

The study suggests the conversion could be eased by a gradual, phased implementation in smaller increments or geographic areas, instead of two large phases.