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Real Estate

Here comes Round 2 for Maui’s vacation rental phase-out bill

By Brian Perry
July 8, 2024 · 11:01 PM UTC
* Updated July 8, 2024 · 11:02 PM
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Mayor Richard Bissen’s bill to phase out vacation rentals in Maui’s apartment-zoned districts drew an overflow, standing-room-only crowd on June 25 to the eighth-floor Council Chambers in the Kalana O Maui Building. The next meeting, beginning at 9 a.m. Tuesday, will be in the much smaller Planning Department Conference Room at the nearby Kalana Pakui Building in Wailuku. PC: Brian Perry

Round 2 in a battle over Mayor Richard Bissen’s proposed phase-out of approximately 7,000 transient vacation rentals in Maui County’s apartment-zoned districts will move tomorrow to a different venue and have a duration estimated at only one hour.

The Maui Planning Commission held its first public hearing on the bill June 25 at the Maui County Council Chambers. Tomorrow’s meeting location will be in a much smaller venue, the Planning Department’s Conference Room in the Kalana Pakui Building in Wailuku.

And, according to the Maui Planning Commission’s agenda, the length of the meeting is expected to be only about an hour “due to the Commission being unable to maintain quorum.”

“Any unfinished business will be recessed to a future meeting date,” the agenda says.

A quorum is the minimum number of members of a group necessary to conduct business. The Maui Planning Commission has nine seats. Three of those seats remain vacant, leaving only six members. They are: Chair Kimberly Thayer of Wailuku, Vice Chair Dale Thompson of Lahaina and Commissioners Mel Hipolito Jr. of Makawao, Ashley Lindsey of Wailuku, Mark Deakos of Lahaina and Andrea Kealoha of Pāʻia. Commission members may not be physically present at tomorrow’s meeting in Wailuku, but can participate virtually.

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According to the Maui County Charter, “a majority of the entire membership of a board or commission shall constitute a quorum to do business, and the affirmative vote of a majority of the entire membership… shall be necessary to take any action.”

The commission is the first of Maui County’s three planning commissions to take up the measure. The bill also has been referred to the Molokaʻi and Lānaʻi planning commissions.

On June 25, the Maui panel’s first public hearing on the bill drew a standing-room-only crowd to the Maui County Council’s chambers, which has capacity to accommodate 200 people. There’s a 62-person capacity in the Planning Department’s Conference Room at Kalana Pakui.

Before public testimony began around 10:30 a.m. on June 25, a Maui Fire Department representative announced there were too many people in the Council Chambers. People were asked to leave if they were standing in walkways or exits. Outside, on the County Building’s front yard, accommodations had been set up for expected overflow crowds: chairs and a large-screen TV were available for people to watch the commission’s proceedings.

The commission agenda for tomorrow’s meeting notes that “due to physical meeting space constraints,” members of the public and others are encouraged to attend virtually via Webex Videoconferencing. The meeting ID is: 2663 645 5106, and its password is: 070924.

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Under the phase-out bill, housing units still used as vacation rentals in apartment-zoned districts will no longer be permitted as short-term visitor accommodations — as of July 1, 2025, for West Maui, and Jan. 1, 2026, for the rest of Maui County.

The Bissen administration’s launch of the bill follows a new state law that clarifies transient vacation rentals are not considered residential uses and may be phased out. Currently, apartments that have been used as vacation rentals since before April 20, 1989, have been grandfathered to continue as transient accommodations even though a Maui County ordinance in 1989 removed transient vacation rentals as permitted uses in apartment-zoned areas.

According to Bissen, Maui County has approximately 13,700 transient vacation rentals in Maui County, and the proposed bill may impact 7,100 units in apartment-zoned districts, mostly in West and South Maui.

The Bissen administration is working with the Hawaiʻi Community Foundation to fund an economic impact study conducted by the University of Hawaiʻi Economic Research Organization.

According to the mayor, UHERO released an analysis that shows the proposed bill would increase Maui’s long-term residential housing stock by 13%.

Maui Planning Commission members heard mostly testimony opposed to a proposed phase-out of vacation rentals in apartment-zoned districts, mostly because of anticipated dire economic impacts. However, commissioners also heard passionate testimony from residents in favor of the bill as a way of opening apartment units, now vacant or used for transient accommodations, for residential housing. PC: Brian Perry (left); Wendy Osher (right)
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Most testimony heard June 25 opposed the measure. Bill opponents maintain that phasing out vacation rentals would have dire economic impacts, including mass unemployment, business closures and loss of tax revenue for Maui County and the state. Bill foes say eliminating short-term rentals will not create more residential housing because owners are likely to leave them vacant. Many apartment buildings have small units not suitable for families, they say, and the structures are old, in need of repairs and too expensive for local residents.

Bill supporters say apartment-zoned districts are meant for residential housing, and the phase-out bill should free up housing desperately needed by residents. There was a deficit of approximately 10,000 housing units even before the Aug. 8 wildfires, which destroyed more than 2,000 structures, mostly homes.

Measure supporters say the commission should prioritize people over profits and residents’ needs over the needs of visitors and vacation rental owners and operators, many of whom live off-island. They told commissioners many residents don’t have a single residence of their own, let alone multiple vacation rental properties. The skyrocketing cost of housing is a primary reason local people are leaving Maui to move to less-expensive locations on the mainland.

Overall, 148 people submitted either in-person or online testimony on June 25. Those remaining on the testifier sign-up list will be allowed to testify tomorrow. “Oral testimony will not be taken from those who previously provided oral testimony at the June 25, 2024, meeting,” the commission agenda says.

After testimony is completed, the commission will be able to deliberate and determine its recommendation on the bill to the Maui County Council. The commission has the options to recommend passage or denial of the bill as submitted, approval of an amended version or deferral for more study.

Brian Perry
Brian Perry worked as a staff writer and editor at The Maui News from 1990 to 2018. Before that, he was a reporter at the Pacific Daily News in Agana, Guam. From 2019 to 2022, he was director of communications in the Office of the Mayor.
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