A demonstrator holds a sign in support of Bill 9, which would phase out short-term rentals in apartment districts. Maui News photo/Gary Kubota

Maui County Mayor Richard Bissen has proposed phasing out thousands of short-term vacation rentals in apartment districts to provide more affordable housing for residents, but some real estate-related businesses say Bill 9 won’t accomplish that goal.

A hearing before Maui County Council’s Housing and Land Use Committee on Monday drew a standing-room crowd as more than 160 people signed up to present testimony on the bill that would ban short term rentals in Maui’s apartment districts and remove long-standing exceptions for pre-1989 properties known as the “Minatoya list.”

Bissen said that if passed, the measure would provide for three years of amortization, in which time an affected owner could apply for rezoning to hotel.

Groups like Maui Strong and the International Longshore and Warehouse Union have come out in support of the bill, while the Realtors Association of Maui has expressed opposition.

Lynette Pendergast, president of the Realtors Association, said the organization supports increasing the stock of affordable housing but doesn’t back this proposal.

“We just don’t think Bill 9 is the way to get it,” Pendergast said.

The association represents 2,000 members, and Pendergast said a survey conducted by the association found only 8% of vacation rental owners would be willing to convert their properties into long-term rentals if Bill 9 is enacted.

However, Pendergast said the bill could have serious consequences for the owners, many of whom are looking for ways to cover their rising costs, including maintenance fees ranging from $1,200 to $2,000 a month.

Jennifer Taylor, secretary with the Palms of Wailea, said four of the six condominiums in Wailea are in an apartment district and would be subject to Bill 9’s conversion to long-term rentals.

Taylor said the condominiums were built with the understanding they were to be short-term rentals, including the Grand Champions, Wailea Ekahi Wailea Elua and her Palms condominium.

“It’s in a resort zone,” she said. “I think they need to exempt those in resort areas.”

Taylor said that if the four condominiums were converted to apartments, the number of resort units would drop from 1,033 to 251.

The 2023 Maui wildfires destroyed 5,400 households and displaced 12,000 people, according to the mayor’s office, and Bill 9 is part of the administration’s efforts to respond to the housing shortage, which has worsened following the wildfires.

Stephen West, a representative of the International Longshore and Warehouse Union, said the union supports phasing out short-term rentals in apartment districts because Maui was in a housing crisis before the fire and it’s now become a state of emergency.

“Business as usual cannot continue. We need to have places for our residents to live,” West said in a prepared statement representing more than 5,000 ILWU members on Maui.

“This is our top priority,” West continued. “We are losing entire families due to this housing crisis.”

Bissen also said short-term rentals have contributed significantly to the imbalance in Maui’s housing market by inflating housing costs, overloading the infrastructure and leading to the outmigration of residents.

Bissen acknowledged economic reports showing there would be a decline in visitors by shifting short-term rentals into long-term housing, but the mayor said some of the costs of the housing crisis cannot be measured by economic forecasts.

“They cannot quantify the heartbreak of yet another local family forced to leave their homeland,” Bissen said. “They cannot calculate the loss when kupuna (elders) are separated from moopuna (grandchildren) or when cultural knowledge disappears because the next generation simply cannot afford to stay. They do not measure the cost of a teacher, nurse or firefighter who leaves for good because they couldn’t find housing near where they serve. And they cannot predict what it means for our keiki (children) to grow up without living in the only place they’ve ever called home.”

According to Matt Jachowski, executive assistant to the mayor, transient vacation rentals usually represent 1% to 3% of the housing supply in many cities, but they represent about 21% of Maui County’s housing.

“Maui County is in a totally different category here,” Jachowski said.

He said phasing out the 6,000 vacation rentals in apartment districts would bring Maui in line with other counties in Hawaii. He added that more than 80% of complexes have had units occupied by their owners in the past.

Jachowski quoted a UHERO report predicting that if there were to be a phase out of short-term rentals in apartment districts on Maui, condominium prices could decrease by 25% by 2027.

He said converting them to long-term residential units would also significantly decrease the consumption of water and increase the availability of water — a factor that has prevented at least one housing project from moving forward in West Maui.

The Housing and Land Use Committee is scheduled to reconvene at 9 a.m. June 18 in Council Chambers.