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With the passage of Bill 9, Maui County corrected a decades-old zoning exemption that allowed thousands of units in apartment-zoned districts -- land zoned for housing -- to operate as short-term vacation rentals. Now, the county is considering new hotel zoning designations and deciding which of those properties should be allowed to retain short-term rental use.
As that debate unfolds, we are hearing the same argument repeatedly from short-term rental owners: These condos are too expensive for local people to afford anyway.
But there is something important happening in West Maui's housing market right now, and we need to pay attention to it before making permanent land-use decisions based on what we assume these properties are "worth."
I get an alert every time there is a new listing or a price change anywhere in West Maui. And lately, my inbox looks like this: price cut. Price cut. Price cut. Price cut.
Many of those reductions are happening in condo inventory. Sometimes $5,000. Sometimes $15,000. Sometimes $50,000 at a time.
What Zillow told someone their unit was worth six months ago is not necessarily what the market will bear today.
That distinction matters.
We hear owners say that converting these units away from short-term rentals would cause them to "lose" hundreds of thousands of dollars, or that their condos are simply too expensive for local families ever to purchase.
But sales records are public.
In some cases, units now described as far beyond the reach of local people were purchased years ago for a fraction of their current asking price. A reduction from an anticipated future sales price is not necessarily a financial loss. Sometimes it is simply less appreciation than an owner had come to expect.
I work every day around families trying to stay in Lahaina, including people actively looking for homes. I know roughly what many local buyers can afford. There is still a gap between that purchasing power and the asking prices of many West Maui condos.
But that gap is getting smaller.
And we cannot talk seriously about affordability without talking about Association of Apartment Owners maintenance fees.
Some of these units carry fees approaching $2,000 a month. We should be asking why. How much of that cost is necessary to maintain safe, functional housing, and how much is tied to the amenities and level of service expected of a property functioning partly as visitor accommodations?
If these buildings transition back toward being places where people actually live, their budgets and amenities should transition too. If purchase prices continue to adjust and $2,000 monthly AOAO fees can come down substantially, suddenly the affordability calculation looks very different.
Now we are talking about homes.
There is another major change coming that we should not ignore: Fire survivors will soon start to receive settlement determinations. Many Lahaina families who want to purchase homes will soon have significantly more money available for down payments than they have today.
Local purchasing power is about to change at the same time that portions of the West Maui condo market are already adjusting downward.
That is why we need to challenge the idea that "market rate" is some fixed and objective number that government policy must simply accept.
It isn't.
Market rate is a construct. In real estate, we largely define property value by how much wealth can be pulled from a piece of property -- through appreciation or through the income it can generate.
When you remove the ability to generate substantial visitor-industry income from a box of housing, the calculation of what that housing is worth changes drastically.
That isn't theoretical. We are watching it happen in real time.
For years, we have been told that West Maui housing is simply too valuable for the people who live and work here to afford. But much of that "value" was created precisely because our housing was allowed to function as part of the visitor industry.
Change that equation, and the market changes too.
Maybe the question isn't whether local families can ever afford West Maui housing at values created by the short-term rental economy.
Maybe the question is what West Maui housing becomes worth when we decide its highest purpose is housing people again.
Autumn Ness serves as the Lahaina Community Land Trust's executive director, nurturing the long-term vision and holding steadfast to bring more 'āina into community ownership. For more information about LCLT, visit lahainacommunitylandtrust.org.