Housing vs. tourism: Maui Council weighs vacation rental phase-out amid tears and warnings

Overflow crowds turned out Monday to support or attack the hotly debated vacation rental phase-out bill, but the action started early, on the sidewalk outside the Kalana O Maui Building in Wailuku.

Wearing red Lahaina Strong and yellow ILWU shirts, supporters of Bill 9 formed a circle and prayed. Their signs read “Maui People First,” “Homes Not Vacation Rentals” and “Fresh Out of Aloha for short-term rentals.” Some had survived the August 2023 Maui wildfires. But nearby was another, less conspicuous group, a line of quiet vacation rental supporters.

While the pro-bill group was busy holding a press conference in support of creating long-term resident housing, a group of vacation rental owners quietly made their way through the County Building lobby door and headed up elevators to the eighth-floor Council Chambers. The two groups exchanged sideways glances.

The immediate prize Monday morning was a spot at the front of the line to testify on the mayor’s highly controversial proposal to phase out 6,000 Maui vacation rentals to create long-term residential housing in apartment-zoned districts. But the scene outside the Kalana O Maui Building foreshadowed what would become the day’s overarching theme: competition for a limited resource, whether a seat in the Council Chambers or a home on an island in the midst of a housing crisis.

A plea for homes and justice

In his testimony, Baldwin High School agriculture teacher Shane Albritton noted his observation of the anti-bill group making moves to get ahead in line.

“I wasn’t expecting to be here all day,” he told members of the Maui County Council’s Housing and Land Use Committee after an hourlong lunch break. “I got here at about 8:15, hoping I would be kinda high up on the list. And then when the doors opened, we saw a big rush of people coming here to get on the list. And, so we got to listen to the whole hour about how hard it is to own five vacation rentals on Maui. And I thought, what a great representation of how these investors put themselves ahead of the community.”

Nāpili resident Ceone Nojima-Jacinto testified in support of Bill 9, saying that, for too long, Hawaiʻi has been exploited by outsiders aiming for profit.

“The abuse of its fertile soil and fresh-flowing waters by the sugar cane and pineapple industries, to the sandalwood trade and humpback whaling history, the story of outside investors coming into these islands to make a profit and then leave nothing behind but fallow grasslands is all too familiar.”

“The tourism industry, unfortunately, is following the same narrative of use and abuse, and the ones that are being left behind with little to nothing are the local people,” she said, holding her hand to her eyes, trying to hold back tears.

For wildfire survivors and longtime residents, the bill represents a long-overdue course correction.

Generational Lahaina resident Shannon Iʻi, who lost everything in the August 2023 wildfire disaster, the fight for residential housing is about fundamental justice.

“We are tired of watching our communities get carved out for outside gain while we are left fighting for scraps,” she said. “The Lahaina Strong community is not just about disaster response. It’s about long overdue justice. It’s about reclaiming our homes, our spaces, and our right to stay here in our own homeland.”

Iʻi lives at Ka Laʻi Ola, the temporary housing for fire survivors above Wahikuli in Lahaina. She said her unit is a “500-square-foot fishbowl.”

“So don’t you dare, the opposition, use the excuse that these condos cannot be used to house our local community,” she said. “We will make it work because that’s what we’ve always done.”

“We will no longer let this continue,” Iʻi added. “Don’t tell me there’s no space because we are to the point where ʻohana have moved away, our kanaka living in tents on the beach or parked in their cars living in parking lots. We are in a housing crisis, one that existed long before the fire.”

“Bill 9 helps to close the loophole that’s allowed the misuse of the Minatoya option for too long, turning our residential residential spaces into money machines for people who don’t even live here,” she said. “This is not about taking something away. It’s about restoring what should have never been taken in the place.”

Minatoya refers to the late Deputy Corporation Counsel Richard Minatoya, who wrote a 2001 opinion that served as a basis for grandfathered “Minatoya List” properties: apartments that were built before 1989 and were operating legally before a law passed prohibiting vacation rentals as a permitted use in apartment districts.

Maui’s decades-long housing shortage has reached epic proportions after the Lahaina wildfire disaster destroyed more than 2,200 structures, displacing thousands of people and killing at least 102.

In a statement to Maui Now, Caitlin Miller, executive director of Maui Vacation Rental Association, said her organization has been “deeply committed to helping and supporting those affected by the wildfires.”

“At the same time, we must ask ourselves whether this draconian approach to phase out existing legal short-term rentals helps or hurts the situation,” she said. “What we do know is that Mayor Bissen’s bill is deeply unpopular among voters and numerous studies have concluded there will be devastating economic consequences leading to the loss of thousands of jobs, and hundreds of millions in economic activity for the island.”

Miller added that, “most importantly, there’s been little evidence that this policy will result in a significant increase in affordable housing for locals. Our hope is that county lawmakers will find a more sensible solution that guarantees results rather than risk the future welfare of the community on a policy gamble of this magnitude.”

During the earlier press conference, Lahaina Strong leader Paele Kiakona traced the group’s movement to create local housing opportunities to the tragic Lahaina wildfire disaster “that changed our lives.”

“But we’ve been persistent in trying to turn our hurt, pain and tragedy into opportunities to change our home for the better and at times I feel like we’ve been forgotten,” Kiakona said. “But on days like today I’m reminded that even if the rest of the world has forgot about us, we are still here taking care of each other.”

Kiakona said the group remains committed to phasing out vacation rentals as soon as possible.

“The units that occupy our inventory, that drive up prices making the price of living an unreachable fantasy to acquire, and drink up exponentially more water than your typical household leaving us dry, barren and without a way forward,” he said.

Warnings of dire consequences

Opponents, however, painted a grim picture of economic devastation if the bill passes. They argued it would punish small business owners and would not create the affordable housing proponents envision.

“Tourism is our lifeblood on Maui,” said Dave Englert, who manages short-term rentals and has a staff of 24 and 70 independent contractors. “They all depend on these condos to pay their bills.”

“The mayor likes to point out that the other places like London and New York City banned vacation rentals, and they’re doing all right,” Englert said. “Well, that’s great, but Maui isn’t a metropolis with a plethora of thriving industries that we can all switch to if this ban goes through. Diversification is good, but that takes time to foster.”

Heidi Dollinger said scapegoating vacation rentals as villain responsible for Maui’s chronic housing shortage risks damaging the island’s fragile economy.

“It’s tempting and so easy to rally around a perceived enemy — vacation rentals — and point to a seemingly simple solution,” she said. “Do away with vacation rentals, and Maui residents can magically move into these costly, aging condos, pay the skyrocketing maintenance fees and special assessments, and live happily ever after.”

But she argued that Bill 9 won’t result in the affordable housing bill proponents are hoping for.

Instead, “it would simply pull the rug out from an already vulnerable and very interconnected community, further damaging our struggling economy,” she said. “If vacation rental owners can’t rent their units, the reality is many of them will simply hold onto them. Or, unfortunately, they will sell them to other off-island, wealthier people who can afford to pay cash and keep them for personal use.”

The financial reality of owning the condos was a recurring theme for vacation rental owners.

Lisa Persinger, a 40-year Maui resident, detailed the significant and rising costs of ownership, telling the Council that her monthly maintenance fees had recently nearly doubled from $750 to $1,400. She also cited insurance hikes of up to 500% and a recent, unexpected $6,000 special assessment that was due within two months.

“This bill will not solve the affordable housing crisis nor the current economic downturn on Maui,” Persinger said, arguing that the anti-tourism message was already hurting small, locally owned businesses.

Question of trust and legal risk

Beyond the primary conflict over housing resources, the debate touched on deeper issues of legal precedent and trust in government.

“I’m going to talk about trust in our government,” vacation rental owner Eve Hogan said. “Trust that when, before buying a condo, the director of Planning assures us that it’s a legal use to operate it as a vacation rental and that it is also the truth and that that right won’t be taken away.”

Hogan said she wants to trust that government will be fair and, “to the best of its ability, make laws to support all of its citizens, not just some of them.”

She has seen local government trying to take away previously legal businesses, like food trucks on agricultural land.

“We spent all day in Council the other day trying to right that wrong,” Hogan said. “Emotionally, I understand the hope of this bill, I truly do, but logically, it makes no sense.”

Heather Quesade said there are significant legal issues at play.

She told council members about how a Superior Court in South Lake Tahoe, Calif., overturned voter-approved restrictions on vacation home rentals in residential areas. The ban had been challenged by plaintiffs who argued that it infringed on property rights and discriminated against non-resident property owners.

“Maui County cannot afford an egregious amount of money they will be forced to spend once lawsuits start filing in, just to end up losing in the end because if it’s unconstitutional in California, that means it’s unconstitutional in Hawaiʻi,” she argued.

Richard Hudson framed the issue as one of personal responsibility for a bad investment. Likening owners to the man who built his house on sand in the biblical parable, Matthew (7:24-27), he argued the investments in vacation rentals were always “parasitic on the local economy” and legally questionable.

“So, you’re gonna hear the opposition… giving you sob stories,” Hudson told the Council. “Is it your responsibility to be their mommy and daddy and bail them out?”

Council members weigh in

At times passions would run hot and onlookers applauded, sometimes loudly, if they agreed with a speaker. Housing and Land Use Committee Chair Tasha Kama tried to tamp that down. “Members of the gallery, please maintain decorum,” she said in one instance.

Council Member Tamara Paltin was most persistent in asking “clarifying questions,” primarily of vacation rental owners testifying in opposition to the phase-out measure. She asked them, at the time of their purchase, whether their real estate agent informed them that they were buying units in an area zoned for apartment use?

Most said they were informed that vacation rentals were a permitted use. When Paltin asked them to identify their real estate agent, all said they’d “rather not say.”

In another line of questioning, Council Chair Alice Lee indicated a couple of times that she’d like to see a compromise worked out on the vacation rental issue.

For example, she ended her questioning of property manager Russell Wynne by saying: “If you can think of a reasonable compromise, please let me know.”

Coming up next

The County Council’s Housing and Land Use Committee will reconvene to hear more public testimony at 9 a.m. next Wednesday, June 18, in the eighth-floor Council Chambers of the Kalana O Maui Building.

At the end of the day Monday, the committee had heard from 52 testifiers — less than a third of the 179 who signed up by the time the panel recessed shortly before 4:30 p.m. The committee will make its recommendations to the full Council after public testimony has been completed.