On Thursday, Maui County Council’s housing committee voted in favor of a bill that seeks to roll back several thousand short-term vacation rentals in an effort to create more long-term housing for Valley Isle residents.

The Maui County Council’s Housing and Land Use Committee voted 6-3 to pass Bill 9, which would close a more than two decadesold loophole that allows thousands of condominiums in Maui County’s apartment districts to operate as short-term rentals.

Maui County Council still needs to pass Bill 9 for it to become law, but the committee’s vote is a strong indication of the final outcome because all nine council members sit on the housing panel.

“It’s a relief that it passed,” Council member Tamara Paltin said on Friday.

Paltin, whose West Maui district has undergone an extreme housing shortage after roughly 2,200 structures were destroyed in the 2023 Maui wildfires, is looking forward to having more long-term rentals for residents on Maui, but she expects more discussion as the bill continues to move through the County Council.

“It’s the start of a lot of conversation,” she said. “I’d encourage our residents to remain engaged.”

Mayor Richard Bissen proposed the bill and has been a strong proponent of the legislation.

“Bill 9 is a critical first step in restoring our commitment to prioritize housing for local residents — and securing a future where our keiki can live, grow, and thrive in the place they call home,” Bissen said in a statement.

Bissen proposed the legislation last year after wildfire survivors and activists camped out on a beach popular with tourists to demand change. The mayor has said tourism will continue but cannot “hollow out our neighborhoods.”

If passed, the mandate would take effect in the West Maui district that includes Lahaina in 2028. The rest of the county would have until 2030 to comply.

For and against

County Council vice chair Yuki Lei Sugimura, who voted against the bill, said she worries about the lack of a plan to help several properties in major resort areas who had conflicts in apartment zoning and resort designation in their land use.

“I was hoping that we had more concrete steps forward,” Sugimura said.

Sugimura said she feels the Bill 9 should have excluded those apartment-zoned properties in resort areas such as Kaanapali, Kapalua and Wailea because the short-term rentals provide a choice for visitors.

Sugimura said that if the Bill 9 passes in its current form, she plans to work with owners of short-term apartment rental properties in resorts to get a hotel designation.

Maui Council members Shane Sinenci, who voted for Bill 9, said the legislation seeks to reclaim properties in apartment districts for local housing.

“We see how short-term rentals have displaced local families, including teachers, nurses and emergency personnel,” he said.

Sinenci said passing Bill 9 is a faster and more cost-effective way to increase local housing than trying to build our way out of a crisis.

Opponents have questioned whether many residents could afford the condominiums in question. Many of the buildings are aging, and some of the units come with high mortgages, insurance payments, maintenance and special assessment costs.

Maui Realtors Association president Lynette Pendergast said her group continues to have concerns about how the legislation could hurt the availability and affordability of long-term rentals on Maui.

“RAM remains committed to advocating for balanced, data-driven housing policies that serve both our communities and our island’s future,” Pendergast said.

Alicia Humiston said her condominium is in a hotel zone so it won’t be affected, but she predicted the measure will hurt housekeepers, plumbers, electricians and other small business owners who help maintain vacation rentals.

“It’s not what’s best for the community,” said Humiston, who is president of the Rentals by Owner Awareness Association.

Potential effects

Vacation rentals currently account for 21% of all housing in Maui County, which has a population of about 165,000 people.

An analysis by University of Hawaii economists has predicted the measure would add 6,127 units to Maui’s long-term housing stock, increasing supply by 13%.

The study also found only about 600 new housing units are built in the county each year, so converting the vacation rentals would be equivalent to about a decade’s worth of new housing development. Condominium prices would also drop by 20-40%, the study estimated.

However, the report also predicted that one-quarter of Maui County’s visitor accommodations would vanish and visitor spending would sink 15%. It estimated gross domestic product would contract by 4%.

Bissen has said such economic analysis failed to tell a full story, noting families are torn apart when high housing costs drive out relatives and that cultural knowledge disappears when generations leave Maui.

The mayor told the council the bill was one part of a broader housing strategy that would include building new housing, investing in infrastructure and stopping illegally operated vacation rentals. He said there were limits to how much new housing could be built because of constraints on water supplies and sewer infrastructure.

The mayor’s staff told council members that visitor spending would decline with the measure but most of the drop would be on lodging.

Because 94% of those who own vacation rentals in apartment zones don’t live on Maui, county officials have said much of this income already flows off the island. They predicted the county budget could withstand an estimated $61 million decline in annual tax revenue resulting from the measure.

The Associated Press contributed to this story.