Maui Planning Commission members will take up the draft South Maui Community Plan update on Tuesday, and it comes with a very hot potato — a policy statement to increase residential housing by phasing-out short-term vacation rentals.

The commission has already received dozens of written testimonies opposed to the plan’s Section 2.2.25 policy statement. Found on Page 37, it says: “Increase the inventory of long-term housing units, whether owner-occupied or long-term rental, and whether single-family or multi-family, by phasing-out and converting existing vacation rentals to long-term occupancy.”

The statement is among numerous proposed policies in the South Maui Community Plan Advisory Committee draft, dated February 2024. That was three months before early May when Mayor Richard Bissen announced his proposal to phase out short-term rentals in apartment-zoned districts in Maui County.

The draft community plan policy is similar but more expansive, in terms of effect, to the mayor’s highly controversial bill. The draft South Maui Community plan policy statement doesn’t restrict the phase-out to any particular zoning district. It also does not provide a timeframe for conducting the transition from short- to long-term residential use.

The mayor’s proposed bill has been reviewed by the Maui, Molokaʻi and Lānaʻi planning commissions and is pending before the Maui County Council. The University of Hawaiʻi Economic Research Organization, known as UHERO, is conducting a study of the bill’s economic impacts. That study is expected to be ready in time for Council consideration of the bill later this year. The Council also is moving ahead with a separate study of the bill’s impacts.

The Maui Planning Commission meeting is set for 3 p.m. Tuesday at the Planning Department conference room in the Kalana Pakui Building at 250 South High St. in Wailuku. Members of the public can participate remotely via Webex Videoconferencing. Meeting ID: 2664 282 4176 Password: 082724.

In an email Friday in response to a Maui Now query, Rob Weltman, chair of the South Maui Advisory Committee to the Maui Planning Commission, distinguished between an “action” and a “policy” in the community plan draft.

“Actions” are for public government agencies to execute or carry out, while policies are intended to be consulted by the Planning Department or commission before making any changes in land use or permitting, he said.

“If a request is received to permit additional short-term rentals in South Maui, for example, the (Planning) Department should consult the community plan and see that short-term rentals are to be phased out and so deny the request,” Weltman said. “If it, on the other (hand), receives a request to convert a short-term rental to long-term rental, involving a zoning change, the department should support the change based on the community plan policy.”

Weltman also chaired the Community Plan Advisory Committee for the the South Maui Community Plan and served as vice chair of the Kīhei Community Association.

Dozens of submitted written public testimonies on the proposed short-term rental policy in the South Maui Community Plan rehash much of the many hours of debate heard on the Bissen phase-out bill by the Maui Planning Commission during marathon meetings in June and July.

The vast majority of written comments on the South Maui plan update are opposed to including a policy statement in favor of phasing out vacation rentals.

Opponents say it would amount to an unconstitutional taking of property; lead to costly lawsuits; hurt tourism and small businesses; cut off tens of millions in tax revenue; put thousands of residents out of work; and devastate Maui’s economy.

A number of written testimonies refer to a “White Paper” from economist Paul Brewbaker, prepared in 2022 for the Realtors Association of Maui. His paper assessed economic impacts of removing short-term rentals in Maui County apartment-zoned areas.

Brewbaker predicted the loss of 14,126 jobs in Maui County and 16,681 jobs statewide. He said the loss of short-term rentals would impact a third of Maui County’s visitors and result in “foregone annual amount of $1.67 billion,” and Maui County “output would decrease by $2.74 billion.” State tax revenues from Maui County would decline by $137.3 million, he said.

In written testimony, Bruce Busch opposed the phase-out of vacation rentals in the South Maui Community Plan as an unconstitutional “taking” by the government because it restricts the usage of property currently permitted for short-term rentals and “against the previous reasonable expectations of the owners.”

“Rather than discuss, consider and negotiate possible solutions, section 2.2.25 is attempting to drop an atomic bomb,” he said. “It won’t work as written and, in the interim, will not only decimate the tax base but will cost the taxpayers millions in needless legal fees that otherwise could be avoided while retaining the tax base.”

Cassie Hayashi, who grew up in Kīhei and works for a small family-owned vacation rental company in South Maui, said the elimination of condominiums as short-term rentals would result in the loss of jobs for people who provide vacation rental services, including cleaners, plumbers, electricians, pest control workers, window washers and carpet cleaners.

“I rely on my job to pay our mortgage,” Hayashi said. “This job allows me to live on Maui, the place I was born and raised. I urge you to remove section 2.2.25. Doing so will keep my family and other local family’s employed and living on Maui.”

While submitted written testimony overwhelmingly opposes the short-term rental policy statement, Marjorie Lang, a full-time Grand Champions Villas resident, expressed full support of phasing out vacation rentals.

“This will increase a sense of community and reduce the number of transients on island making it overcrowded, damaging our environment and promoting low-paying tourist industry jobs,” she said. “I believe Maui will be the better for having the Minatoya List condos be long-term residences of owners or renters, by reducing the number of low-paying tourism jobs and increasing needed and high-paying jobs in medicine, technology, etc. focused on supporting community.”

So-called “Minatoya List” vacation rentals have been grandfathered, or allowed to continue, even after Maui County passed an ordinance in 1989 making transient accommodations non-permitted uses in apartment-zoned districts. Most of the affected units are in West and South Maui.

Cynthia Miller opposed including the short-term phase-out policy statement in the South Maui Community Plan, saying it “will not magically result in an abundance of long-term affordable housing units.”

“Many of these units do not provide suitable, long-term living conditions for a family,” Miller said. “They are typically small units, with limited storage, limited parking, no pet policies, smoking restrictions and occupancy restrictions. They are certainly not the solution to the affordable housing crisis that Maui has been suffering from for many, many years. These STRs were always intended to be used for short-term, vacation rentable spaces.”

Kristin Yamagishi recommended eliminating the vacation rental phase-out from the community plan but stopping any further development of short-term or transient vacation rental condominiums on the island.

“Transient accommodation owners are on the side of Maui residents,” Yamagishi said. “They want to see affordable housing options come to the market in sizes, floor plans, and in areas preferred by locals. If the commission, the Council and the mayor saw an ally in this cohort rather than a scapegoat for poor policies of the past, then forward progress could be swift and well-funded, and a more unified Maui could move forward.”

Grace Bertolozzi-Pierce, wife of a 10th generation Portuguese Mauian, said their Kamaole Sands condo represents their life savings, and she opposes eliminating short-term rental condos in South Maui.

“Maui county would experience a profound decrease in jobs, property value and taxable income for no real gain for our displaced or to our rentable housing stock,” she said. “These condos were built for vacation use and were never set up for family life.”

Chris Yarish said that, “by scapegoating lawful, tax revenue-generating, short-term rentals and incorrectly alleging that ‘they are the problem, therefore, their absence is the solution,’ misleads residents into thinking that a ‘phase-out’ will make a $1M, a $1.5M, or a $1.8M condo affordable.”

“Even if the majority of these condos were gifted to someone earning the median income of the area, they are prohibitively expensive properties to own,” Yarish said.

The draft South Maui plan update has more, potentially controversial, draft policy statements.

Honolulu attorneys Duane Fisher and Eric Robinson submitted written testimony cautioning Planning Commission members against “requiring” action in the South Maui Community Plan.

“As the Commission may be aware, community plans . . . can have the force and effect of law,” they said. “For example, in the case of special management area permits, development must be consistent with community plans. . . . Policies that impose requirements, as opposed to providing guidance (i.e., encouraging), can raise significant constitutional issues.”

As examples from the draft plan, they cite draft policy 2.2.19, which would require workforce housing units to be spread out equitably throughout the South Maui Community Plan subareas to create diverse communities in all South Maui residential areas.

“This policy’s requirements impose additional constraints on workforce housing,” they said. “For example, property may not be available or at an economically feasible price for workforce housing to be developed in areas where housing needs to be equitably placed.”

They also cited draft policy 2.2.26, which says that all permitted affordable and workforce housing units that are required as part of a development approval must be completed before or at the same time as the rest of the project and cannot be separated to a later phase of the project.

The attorneys said this policy would “impede the development of affordable and workforce housing by making it more difficult to cover the cost of such housing before the other phases of development can generate sufficient return and cash flow.”

And, they cite draft policy 2.2.27, which would prohibit new transient units and require the development of high-end and luxury homes to provide their required workforce housing on-site until adequate workforce housing is established to meet existing needs.

They said this policy would have “negative impacts on the economy, trades and tourism industry. Moreover, requiring on-site workforce housing for high-end and luxury homes is likely an unconstitutional exaction.”

Following Tuesday afternoon’s meeting, the next regular Maui Planning Commission meeting will be on Sept. 10.