A `promise to restore balance’: Mayor Bissen makes his case for vacation rental phase-out

Citing Maui’s severe post-wildfire housing crisis, the Bissen administration presented its formal case to a County Council committee to phase out approximately 6,000 short-term vacation rentals mostly in West and South Maui.

“We simply can’t build fast enough to meet the scale of demand we’re facing,” Mayor Richard Bissen told members of the Housing and Land Use Committee Monday, adding that Maui’s “limited resources, especially water and sewer capacity, make it impossible to deliver enough new units in time to reverse the crisis.”

The mayor’s proposal, Bill 9, attempts to end the decades-long Maui County policy of allowing vacation rentals in apartment-zoned districts, after they were prohibited by ordinance in those areas in 1989. The so-called “Minatoya List” units were “grandfathered” under a 2001 legal opinion by late Deputy Corporation Counsel Richard Minatoya. The list was codified by county ordinance in 2014.

Bissen said it’s his responsibility as mayor to put the greater good of Maui residents first, and — to that end — vacation rentals in apartment-zoned areas must be phased-out to provide much-needed housing and restore balance between residents’ needs and demands of the visitor industry.

“Housing is not a speculative asset,” he said. “It is a basic human need. And when the balance tips so far that our residents become outsiders in their own neighborhoods, we have a moral obligation to act… Bill 9 is more than a policy — it’s a promise to our people: a promise to restore balance, to protect our residents, and to put our community first.”

The Bissen administration’s staunch pursuit of Bill 9 continues a clash with vacation rental owners, Realtors and others whose livelihood depends on the viability of visitor accommodations still operating in apartment-zoned areas. Resale volume and values of Maui condominium units have dropped since Bissen announced the phase-out bill last year.

Vacation rental owners argue the Bissen bill would violate their property rights and cripple the island’s economy. A March 31 University of Hawaiʻi Economic Research Organization report warned the measure could cost 1,900 jobs and strip $900 million in visitor spending from the economy.

Human cost vs. economic models

Bissen urged council members to put Maui’s people first as they “face the most severe housing crisis in our history.”

“We are not here to divide our community — we are here to preserve our community,” he said.

While acknowledging the UHERO report’s cautionary message of projected mixed outcomes, Bissen argued that economic models don’t capture the human toll of residents getting priced out of paradise.

“They cannot quantify the heartbreak of yet another local family forced to leave their homeland,” he said. “They cannot calculate the loss when kūpuna are separated from moʻopuna, or when cultural knowledge disappears because the next generation simply cannot afford to stay.”

“They do not measure the cost of a teacher, a nurse, or a firefighter who leaves Maui for good because they couldn’t find housing near where they serve,” he said. “And they cannot predict what it means for our keiki to grow up without the hope of living in the only place they have ever called home.”

The administration’s proposal now includes a three-year grace period for operators and offers an alternative: affected properties can apply to have their zoning changed from apartment to hotel. Timeshare units are not affected by the bill.

Fiscal realities and housing data

Department of Finance Director Marcy Martin Martin projected a potential decrease in real property tax revenue of $40 million to $75 million annually, depending on how the properties are reclassified after the phase-out occurs and whether 2026 tax rates remain unchanged.

The administration estimates a $61 million tax income reduction overall, which aligns with UHERO’s projection, she said. Combined with an estimated $15 million annual decrease in general excise and transient accommodation taxes, the total estimated revenue impact is about $75 million, she reported.

“This impact would bring overall tax collections roughly in line with fiscal ‘24-’25 levels,” Martin said. “If no action were taken, the reduction could be reasonably absorbed within the existing budget, assuming stable assessments and no changes to real property tax rates.”

The shortfall also could be offset through targeted tax adjustments, she said.

Matt Jachowski, an executive assistant to the mayor, said 94% of targeted vacation rental owners (5,897) are not Maui County residents.

“So what does that mean?” he asked. “Ninety-four percent of the lost lodging revenue will be lost by our non-resident owners, not our residents.”

Jachowski acknowledged that off-island owners pay local workers, such as condo cleaners, “but there’s going to be a hefty booking fee taken by Airbnb… or whoever they’re using that’s not going to stay here on Maui, and they’re going to take a significant chunk of this money away from Maui.”

Jachowski highlighted data on the suitability of the TVR units for residents, noting that 91% are one- and two-bedroom units, which were in high demand from displaced Lahaina families.

He presented data illustrating the severity of the housing crisis, particularly in West and South Maui. He pointed to historical data showing a steep decline in homes affordable for local families over the past 25 years.

“In the ‘80s and ‘90s, 50% to 70% of all of our home sales were affordable to our median family,” Jachowski said. “In the past five years, less than 10% of all home sales in Maui County are affordable to our median families.”

Citing UHERO’s data, he noted the bill could cause condo prices to decrease by 25% by 2027.

Water, Construction, and Enforcement

Jachowski noted that — at current construction rates — it would take 73 years in West Maui and 208 years in South Maui to build the thousands of homes Bill 9 could transition to residential use.

He addressed Maui’s limited supply of fresh water, especially in arid areas like West and South Maui. Analyzing data from two comparable apartment-zoned properties, he said the property with 97% TVRs used an average of 570 gallons of water per unit per day, while the property with predominantly residential use averaged 128 gallons per day.

“That’s important because, literally, the lack of water is blocking new housing from being developed,” Jachowski said. “I think we all know, for example, about the Pulelehua project in West Maui, which cannot move forward because there’s not enough water.”

“If we were to convert 6,000 of these TVRs into resident housing,” he said, “we wouldn’t just get 6,000 new resident homes, but we would free up excess water for 3,600 to 7,200 additional resident homes.”

Responding to a suggestion from bill opponents that the County should conduct more enforcement of illegal vacation rentals, Department of Planning Deputy Director Ana Lillis said a new contract for illegal vacation rental enforcement services began in July 2023, and it has found the issue to be less widespread than previously thought.

“From that contract, we saw that only about 30 enforcement cases for an illegal transient vacation rental were found as of January 2025,” Lillis reported. “This year, we have only found one new transient vacation rental case.”

Continuous monitoring of vacation rental advertisements works and “remains a high priority” for the Planning Department, she said. “But it has not led to a great deal of enforcement cases.”

‘Status quo failing’

In his closing remarks, Mayor Bissen told council members: “Addressing this crisis will require the collective kuleana of our entire community, and it starts with us.”

“We cannot continue doing what we’ve always done and expect a different outcome,” he said. “The status quo is failing our people — and this housing crisis demands bold, decisive and forward-thinking action. As leaders, we are not just observers of the future — we are shapers of it.”

Next steps

Following the Bissen administration’s presentation Monday morning, members of the Housing and Land Use Committee, chaired by Council Member Tasha Kama, spent the rest of the day hearing from 52 testifiers – both for and against Bill 9. That’s less than a third of the 179 people who signed up to testify as of the end of Monday’s meeting.

Kama recessed the meeting shortly before 4:30 p.m. The committee will reconvene at 9 a.m. June 18 in the Council Chambers.