Maui County’s proposed short-term rental ban is still awaiting a decision, but already business in the industry is falling

Before the Lahaina wildfire in August 2023, Lucrecia Ayala’s cleaning business was bustling.

We Clean Maui had contracts with about 30 Kīhei vacation rentals, of which 20 or more usually required four to six cleanings after each of their bookings.

But in the wake of the fire and Maui County’s proposal to phase out nearly 7,000 short-term rentals in apartment districts, tourists disappeared and bookings dropped, leaving Ayala with a much smaller clientele of about 12 rentals that need cleaning only two to three times a month. 

“It’s not just for us; it’s everybody that depends on tourism,” Ayala said. “It’s the A/C guys that do the service or the upholstery cleaning, carpet cleaning, just name it. Whoever works indirectly or directly with tourism gets affected.”

It’s been nearly a year since Mayor Richard Bissen, flanked by members of Lahaina Strong, proposed the short-term rental ban in hopes of providing much-needed housing after the fire displaced thousands of residents. At the time, Bissen said the change would start July 1 for West Maui units and Jan. 1, 2026 for other areas of the county.

But as short-term rental owners and businesses connected to the industry wait for the Maui County Council to make a decision on the mayor’s bill, the industry already has started to see the effects. Owners are selling their units or lowering their rates. Businesses connected to the vacation rentals, including property management and cleaning services, are seeing fewer jobs and losing income. 

“The worst part of it is, I think, we’re just kind of in purgatory,” said David Englert, general manager of Rentals Maui, which manages more than 300 vacation rental properties in Kīhei, Wailea and Mā‘alaea. 

A study released earlier this week by the University of Hawai‘i Economic Research Organization said that the ban could free up more than 6,000 units — essentially 10 years of construction at the current pace — but could also lead to a loss of $900 million in annual visitor spending and about 1,900 jobs in accommodations, food service, arts, entertainment and retail. 

So, when the Maui County Council finally takes up the proposal, which is expected in mid-May or early June, it will have to weigh the need for housing with the economic benefits of one of its most lucrative industries. 

Maui County has about 63,000 housing units, of which 13,000 are transient-vacation rentals and another 2,500 operate as time-share units, according to the UHERO report. Vacation rentals are a major source of tax revenue for the county. If the proposal passes, property tax revenues could fall by up to $60 million a year by 2029, the report said.

This would come at a time when the local tourism industry is recovering, but still not at the levels it was before the COVID-19 pandemic and the 2023 wildfires. The 2.3 million visitors who came to Maui County in 2024 were less than in both 2019 and 2023, while the $5.27 billion they spent was better than 2019 but less than in 2023, according to Hawai‘i Tourism Authority data.

Maui County had the largest supply of available vacation rental unit nights in the state in 2024, and the second-highest average daily rate, data show. But the 53% occupancy rate in 2024 was 10.3 percentage points less than in 2023, the biggest decline among the counties.

Pam Tumpap, president of the Maui Chamber of Commerce, said arrivals could take another hit as the Trump administration angers allies like Canada over increasing tariffs and potentially discourages them from vacationing in the United States. Canadians make up Maui’s most popular international visitor market. 

And while the vacation rental ban hasn’t been voted on yet, Tumpap said it’s already created a “disruption” because the uncertainty is pushing away visitors and impacting businesses.

“We need to keep our local families here in Maui and we need to get them housing,” Tumpap said. 

But, she said, taking away thousands of vacation rentals would create “significant revenue loss at a time when the county needs revenue to support our rebuilding. And so we really need to find a way to come together and look at the data and come up with the best possible solutions.”

But Bissen says the findings of the report don’t tell the whole story of the struggle residents are facing to find housing.

“It’s important to recognize that economic models — while helpful — cannot fully shape the future of our communities,” Bissen said in a statement on Monday. “They 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 longer distances or leaving Maui entirely; and the growing strain on our infrastructure and sense of place.”

He said transient-vacation rentals, which make up more than 21% of all housing stock, are impacting housing affordability and availability. The report estimated that if the vacation rental proposal passes, condo prices could fall by 20-40%.

“This is not just a matter of land use — it’s about restoring housing to residents, honoring the intent of our residential zones, and reducing our overdependence on tourism,” Bissen said.

Englert is one of the short-term rental owners who opted to sell after the mayor’s proposal came out. He and his wife saved for years to buy a $610,000 one-bedroom, one-bathroom condo in Kīhei in 2022 when interest rates were low. They planned to renovate it and turn it into a vacation rental as “a secondary income, because everything’s so damn expensive out here,” Englert said. 

But after the fire, with Maui in crisis mode and leaders urging tourists to stay away, nearly all of Englert’s bookings for the fall were cancelled. He hosted a displaced Lahaina fire survivor in his Luana Kai unit for a month before the person found somewhere else to live Upcountry. About 60 owners from the rental company he manages also opened up their units to survivors for free, he said.

Even after his temporary tenant moved on, Englert decided he couldn’t hold on to the property, especially with his condo on the Minatoya List of units slated for the short-term rental ban. The couple put the unit on the market, where it sat for a year before it finally sold this week.

Englert said if they kept it, they would have had to charge over $4,000 a month in rent just to cover the mortgage, the homeowners association fees, the rising insurance rates and maintenance fees. He doubted anyone was going to rent a one-bedroom unit at that price. 

Born and raised on Maui, Englert is well aware of the housing crisis. But he said he doesn’t think the local economy could handle the loss of so many jobs and revenue.

“To me it just seems like you’re trying to solve this massive problem with just a blanket shock to the system, but I feel like the shock to the system might be a lot worse than what we currently have,” Englert said. “It’s not like the global economy is doing very great right now either, so what happens if we do this and then the U.S. goes into an economic recession? … How many more residents will move off the island because we just can’t make it here?”

Most of the vacation units that Rentals Maui manages are owned by people off island, and Englert understands residents’ frustration with that. But he said most of the income goes toward the mortgage and to local businesses like Rentals Maui and the 70 local independent contractors it works with for cleaning, repairs and other services.

And, the property taxes for one vacation rental, which are taxed at some of the highest rates in the county, are equivalent to the taxes on several single-family homes combined, Englert said. 

Like Englert, Ayala said some of her clients are also thinking of selling. She said business for her cleaning company dropped once after the fire and again after the short-term rental ban proposal.

Ayala works with six subcontractors, “and lately everyone’s available” and asking for more jobs. She and other cleaning businesses have lowered their rates to stay competitive.

“So cost of living on Maui is increasing, and we are decreasing,” Ayala said.

To stay afloat, Ayala has expanded her services to include construction cleaning. It’s given her more of a steady business, as she can secure a contract with developers for two to three years to clean newly built homes in places like Wailuku or Hāli‘imaile.

“That’s how we coped with all this,” Ayala said. “‘Cause if I would have stayed with the vacation rentals, I would be out of business.” 

Other businesses are feeling the crunch, too. Rich Littlefield, owner of Aloha Cleaning Experts, said his company used to exclusively clean vacation rentals until the industry collapsed during the pandemic. Now, his business handles about 50 properties islandwide, with an even split between residential and commercial.

After losing about 40% of its business after the fire, Aloha Cleaning Experts had “a banner year” in 2024, with eight to nine cleanings a day and the phone ringing off the hook. Now, the calls have quieted and they’re down to about six cleanings a day. Littlefield thinks that’s due to a number of factors. With the fire and the decline in tourism, he says West Maui cleaning companies are moving to South Maui and shifting to residential work as vacation rental jobs decline.

“Before, a lot of people were just strictly into vacation rental, and there was enough to go around,” Littlefield said. “And that pie is being sliced up thinner and thinner, and so people are merging into … our market, just so they can stay afloat.”

John Kevan, general manager and principal broker of Maui Paradise Properties, said it’s hard to tell how much of the recent decline in business is due to uncertainty over the vacation rental ban — it’s a factor, but not a major one, he thinks.

The fire directly impacted the Lahaina-based company, destroying the homes of 23 staff members, as well as two company offices, two warehouses and a laundry facility. He said the company, which manages about 400 properties, took a loss in 2023 and 2024 but has managed to sustain less of a hit than most of the industry in part because of low staff turnover and the Federal Emergency Management Agency paying rent to house fire survivors in about 70 of their units.

If the short-term rental proposal passes, Kevan said it would cut his inventory in half and he would likely have to lay off half of his 105-person staff. His company works with about 35 local contractors, and he said that of the $100,000 in rent a year that a one-bedroom unit in Kapalua could bring in, an estimated 80% stays on island through property taxes, management fees and expenses for cleaners and maintenance workers.

It’s unclear if the council will vote on the proposal before the July 1 date Bissen originally set. Because of the uncertainty, Budget Director Lesley Milner said last week that they did not factor the short-term rental ban into the new budget that starts July 1. Even if it passes this year, Milner pointed out, property taxes aren’t due until Jan. 1, so the financial impacts wouldn’t be felt until next year.

The mayor also wants a decision on his bill and urged the council to take it up as soon as possible.

“Yes, transition brings challenges. But delaying action only makes those challenges more severe,” Bissen said. “This phase-out is not anti-tourism — it is pro-resident. It aligns with our community plans, our zoning laws, and the clear, consistent message we’ve heard from the people of Maui: our residents must come first.”