The Maui County Council’s Housing and Land Use Committee voted 6-1 Tuesday to advance new hotel zoning districts for thousands of short-term vacation rentals facing a county-mandated phase-out—overriding unanimous rejection from all three county planning commissions.

Bill 88 would create two new hotel zoning categories—H-3 and H-4—intended to match the existing use of roughly 4,500 grandfathered vacation rentals at 104 properties on the so-called Minatoya List. The measure does not rezone any properties on its own but would establish a pathway for property owners to seek hotel zoning as the county phases out vacation rentals in apartment districts under Bill 9.

Council Member Keani Rawlins-Fernandez cast the lone dissenting vote, while Council Chair Alice Lee, Vice Chair Yuki Lei Sugimura and Council Members Nohelani Uʻu-Hodgins, Tom Cook, Shane Sinenci and Tamara Paltin voted in favor of the bill’s passage on first reading. Council Members Kauanoe Batangan and Gabe Johnson were absent and excused.

Committee chair defends upcoming as ‘same use’

Before the vote, Committee Chair Uʻu-Hodgins, who chaired the Temporary Investigative Group that recommended creating the H-3 and H-4 districts, laid out the case for the bill’s passage. She acknowledged that the word “upzoning” kept coming up—but argued the use, not the label, was what mattered.

“The use is continuous, the use is the same,” Uʻu-Hodgins said. “We go from apartment that allowed motel… to hotel zoning, so the use will remain the same.”

The TIG wrestled with where to place properties that operate functionally as hotels, and found no existing, suitable zoning category, she said.

“We couldn’t really find any place that’s currently existing,” she said, describing how the committee ultimately concluded that purpose-built H-3 and H-4 designations—modeled directly on the A-1 and A-2 apartment standards—were the most appropriate solution.

Planning commissions unanimously opposed, Molokaʻi wants exclusion

A three planning commissions – Maui, Molokaʻi and Lānaʻi – recommended denial of the bill. Molokaʻi went a step further, asking that Molokaʻi be excluded if the bill advances.

Although Uʻu-Hodgins said she respects the planning commission recommendations, Council members need to take into account the bigger picture, she said.

“We have to blend fiscal responsibility with continual apartment uses in apartment districts and hotel uses in hotel districts,” she said, thanking the Planning Department, administration and committee staff for their work throughout the lengthy process.

Rawlins-Fernandez: Bill conflicts with county policies

Rawlins-Fernandez opposed the bill, citing the commissions’ call for rejection and arguing that the proposal conflicts with Maui County’s adopted land use, housing and climate policies.

Referring to written testimony submitted by Maui Planning Commissioner Mark Deakos, Rawlins-Fernandez said the bill, viewed independently of Bill 9, “must stand on its own merits as long-term land use policy”—and by that measure, it fails. 

“While broad economic policies generally recognize the importance of the visitor industry, the county’s land use, housing, shoreline and climate policies repeatedly emphasize limiting growth in visitor accommodations, protecting residential communities, preserving long-term housing inventory, maintaining a resident-to-visitor balance and discouraging additional shoreline entitlements,” she said.

Rawlins-Fernandez pushed back against comments she characterized as patronizing toward the volunteer commissioners, saying she was proud of their work.

Rawlins-Fernandez offered historical context for the dispute, tracing the apartment district’s motel use provision back to the late 1950s and early 1960s, when it was designed to provide affordable accommodations for commuters and workers — not hotel-resort tourism. Subsequent councils tried to rein in the expansion of tourist use in apartment zones, culminating in the 1989 ordinance that led to the Minatoya List, she said.

“Bill 9 attempted to correct a system” skewed by the tourism industry, she said, adding that her goal remains recovering residential housing.

“The ones that were sold when it was residential use and were scooped up and commodified and decreased our housing supply — I do look forward to being able to claw those back as much as possible,” she said.

Rawlins-Fernandez said she would support the amendment clarifying which properties could qualify for the new zones, while voting against the bill itself.

Council members call bill ‘necessary first step’

Cook, who introduced Bill 88, called the measure a necessary first step and “a tool, a point of reference” for further work. “Without this, it’s kind of hard to do anything.” He said the criteria built into the bill for qualifying properties are structured, and that “this will be looked at thoroughly” as properties seek to rezone in the future.

Paltin said she supported the bill because “it’s a cleaner way to do things.”

“I don’t want a future planner or whoever to look at it and say, ‘This doesn’t fit — like, what am I doing?’” she said.

Lee said passage of legislation called for in Bill 88 should have happened before Bill 9 was enacted.

“The real test will come not with this vote, but the next vote on whether or not it makes sense to move many properties into the correct zoning district and without a lot of pain and trauma because, you know, these uses were in place already.”

Sugimura echoed that sentiment. “I think this is a great solution, and I agree with Chair Lee that this should probably happen before Bill 9 was introduced, to not cause all this chaos, really, in the community,” she said.

Committee approves two amendments

The committee also approved two amendments before the final vote. Those were to incorporate the Department of Planning’s recommended revisions, with an additional revision to require property owners, before Bill 88 takes effect, to have notified the Department of Planning and the department to have confirmed that a TVR use occurred within the structure prior to Sept. 24, 2020.

The change was aimed at preventing approximately 1,700 properties not on the Minatoya List from using the new zones as a backdoor to continue vacation rental use.

The second amendment was to exempt Molokaʻi from having H-3 and H-4 properties.

Bill 88 would not rezone any property; rezoning properties into the H-3 and H-4 Districts would have to be done separately.

Both amendments passed 7-0, with Johnson and Batangan excused.

Mayor Bissen backs bill as ‘intentional next step’

Mayor Richard Bissen opened testimony in strong support of Bill 88, calling it “an intentional next step in implementing Bill 9” that would create a clear zoning framework for considering whether certain properties are appropriate for hotel district classification in the future while continuing to prioritize apartment districts for local housing.

“This framework helps us move forward in a way that protects housing opportunities for local families, while thoughtfully addressing the realities our community must navigate together,” he said.

“I want to be very clear: this legislation does not unilaterally reclassify any properties, nor does it undo Bill 9 or reverse the Council’s policy direction regarding the phase-out of transient vacation rentals in apartment zoning,” Bissen said. “Instead, it creates a transparent process for the community, planning commissions and the Council also to consider whether certain properties may be appropriate for hotel district classification in the future.”

He acknowledged the planning commissions’ unanimous recommendation for rejecting Bill 88, saying those recommendations reflect how strongly the community supports the intent behind Bill 9.

Pro-business and rental owners cite modernization, market reality

Several property owners and real estate industry representatives testified in favor, framing the bill as a matter of zoning modernization and honoring prior commitments.

Eve Hogan said Bill 9 was passed with the “understanding and commitment” from council members that they would follow up with approval of H-3 and H-4 zones.

She also characterized the planning commissions’ vote for denial as stemming from confusion rather than a genuine policy rejection. She argued commissioners appeared to believe the new zones would create more vacation rentals or automatically rezone the entire Minatoya List — neither of which is true.

“If the planning commissioners did not understand accurately what they were voting on, their determination was not particularly useful,” she said.

Tom Croly noted that upzoning apartment-district properties to H-1 or H-2 — the existing hotel zones — would be virtually impossible given building code compliance requirements, since all affected properties were built before 1989.

Most of the affected properties — no matter what happens with zoning — will remain as second homes, he said. Realistically, prices won’t drop by $200,000 to $500,000 to put such housing within reach of local families.

“That is the market for most of these,” he said. “Let’s not kid ourselves.”

Caitlin Miller, testifying on behalf of the Maui Vacation Rental Association, said the bill is “about modernizing Maui County’s zoning code and creating a more internally consistent framework for longstanding visitor accommodation uses.” She said it does not expand short-term-rental inventory and is not about creating additional hotel rights.

Pamela Tumpap, president of the Maui Chamber of Commerce, said her organization was “surprised and felt let down” by the planning commissions’ denial, given the extensive work of the TIG and the Planning Department’s own finding that the bill is consistent with the Maui County General Plan.

She also questioned the logic of using sea level rise as a reason to push shoreline properties toward long-term residential use, arguing that local tenants would be more harmed by coastal displacement than transient visitors.

A written statement submitted by Expedia Group urged passage of the bill, saying targeted rezoning would “preserve vital visitor spending and tax revenue” for properties on the Minatoya List that are not suitable for long-term residential use.

John Chaisson, a 20-year property owner, said the new zones would provide jobs for the local economy and help create a balance in the short-term rental market. Sonny Cave and his wife, who own a condo unit, said the bill “simply implements the TIG’s recommendations” and that failure to pass it could aggravate negative economic impacts and litigation exposure for the county.

ILWU representative Stephen West said his union supports the bill — but only with conditions attached requiring on-site security, housekeeping and front desk operations for any property seeking to qualify.

“If it’s going to walk like a hotel, talk like a hotel, then it needs to operate like a hotel,” West said. “It needs to have sustainable wages that take care of those people.”

He added that hotels with union workers also have pensions and medical benefits.

One condo owner, Julisa Adams, shared a specific account of the erosion of condominium prices in Maui County since the introduction of the bill to phase them out.

She told council members that she has been trying to sell her Maui unit for two years, dropping the price by $225,000, from $875,000 to $650,000 without a single offer from a local buyer.

The property was not set up for residential use and attaching the cost of housing policy reform to individual owners such as herself was unfair, Adams said.

“It can’t be just put on the backs of people who are losing their retirement because we made the mistake of investing in a place that we were in love with,” she said.

Opponents: Bill 88 would circumvent vacation rental phase-out

Bill 88 opponents argued that its passage could unravel years of work to return apartment-zoned units to residential use, and that the planning commissions’ unanimous rejection should carry significant weight.

Lauryn Rego, Maui organizing manager for Our Hawaiʻi and adviser of Lahaina Strong, submitted an updated inventory property analysis of those on the Minatoya List. She reminded council members that those who opposed Bill 9 maintained that the properties were never meant for housing, but filings with the state Department of Commerce and Consumer Affairs showed that some complexes saw 40% to 60% decline in owner-occupancy in 10 years.

“Short-term rental owners would have you believe that these were always built to be short-term rentals,” she said. “But the original documents and declarations for the properties told a different story. The majority of properties included no mention of transient visitor, hotel or commercial activity in their original documents.”

The group’s in-person visits to more than 100 properties found that only a “small handful” resembled hotel operations with a front desk, onsite staff and guest services, Rego said.

“These are not hotels,” she said. “They should not now be converted into hotel zoning to allow them to bypass the intent of Bill 9. If any property believes that it legitimately functions as a hotel, the Council and the Planning Department already have the authority to evaluate those claims on a case-by-case basis.”

Jordan Ruidas of Lahaina Strong similarly reported that her group had visited nearly every Minatoya property and observed that roughly 10 buildings functioned at a level consistent with hotel operations. She said she supports targeted upzoning for those specific properties.

“Our approach has always been grounded in balance and realism,” she said. “In most cases, we observe residential condominium complexes operating as short-term rentals, not legitimate hotels. We did not encounter front desks, consistent staffing or hotel-like infrastructure. Instead, we saw guests writing license plate numbers on whiteboards and using shopping carts as luggage carriers – clear indications of residential properties being used for visitor accommodations without meeting hotel standards.”

Stacey Alapai told the Council she worries the blanket approach risks repeating the same mistake as the original Minatoya List — a broad categorization that took decades to untangle.

“If one of these units can stay and be long-term housing for people who live here, then that’s worth the time and discussion,” she said.

Bill background: Phase-out for residential housing versus hotel zoning

Bill 88 would create new H-3 and H-4 hotel districts for short-term rental properties affected by Bill 9, which Mayor Bissen signed into law on Dec. 15, calling the legislation he introduced “a historic step toward restoring housing availability for residents.”

Within days of passage, luxury condominium owners in Kāʻanapali filed a lawsuit in 2nd Circuit Court, contending that the legislation amounted to an unconstitutional regulatory taking without compensation.

Introduced after the August 2023 wildfires, Bill 9 was aimed at returning apartment-zoned structures to residential use, despite decades of use as transient vacation rentals. The law sets a phase-out deadline of Jan. 1, 2029, for West Maui properties and Jan. 1, 2031, for the rest of the county.

Bill 88 grew out of recommendations of a Temporary Investigative Group, chaired by Uʻu-Hodgins. The measure aimed to provide a like-for-like zoning classification for approximately 4,500 grandfathered vacation rentals on the Minatoya List.

That list refers to vacation rentals that 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 South and West Maui.

Next steps

Bill 88 moves on to the full Council for the first of two readings.

If and when adopted, the legislation would create the new H-3 and H-4 hotel districts as the first of a two-step process, according to Greg Pfost, administrative planning officer for the Department of Planning.

“The second step would involve actually creating or moving properties into the H-3/H-4 district that would accommodate that in the future,” he said.