Maui County Council members are set to begin deliberations next week on Bill 9, a proposed measure to phase out short-term vacation rentals that could significantly impact housing, tourism, jobs, tax revenue, and the island’s economy.

The Housing and Land Use Committee, chaired by Council Member Tasha Kama, closed public testimony Wednesday after hearing from more than 300 people in person and online during five days of hearings. The committee will reconvene for deliberations at 9 a.m. July 2 in Council Chambers.

Preliminary discussions among council members revealed lingering questions about the bill, with Council Members Yuki Lei Sugimura and Nohelani Uʻu-Hodgins indicating a desire to discuss legal issues with county attorneys, likely in closed executive session. The committee also will review the bill with the County Department of Planning and others called as resources for the committee’s consideration of the landmark measure.

If enacted, Bill 9 is expected to face legal challenges from vacation rental owners who argue the short-term rental phase-out would violate their constitutional property rights.

Legal arguments for and against Bill 9

During public testimony on June 18, former Hawaiʻi Attorney General David Louie, representing Airbnb, outlined potential constitutional issues. Louie maintained that vacation rental owners have fundamental constitutional property rights that cannot be eliminated by law.

“The County wants to wipe out lawful, vested short-term rentals that have been ongoing since 1960, for decades,” Louie told council members. “And you just can’t do that, unfortunately. There have been three courts in Hawaiʻi that have spoken on this and have ruled against what Maui County wants to do.”

Louie predicted that enacting the ordinance and harming property owners’ rights would constitute an “unconstitutional taking,” potentially creating “gigantic potential liabilities for the County of Maui.” He cited the US District Court of Hawaiʻi’s 2022 preliminary injunction against similar anti-short-term rental legislation in the City and County of Honolulu, which pointed to the Fifth Amendment‘s takings clause. That court stated there was “no question” the attempted ban constituted a taking because it outlawed existing short-term rentals “without providing any process to compensate or accommodate nonconforming uses,” according to Louie.

Speaking for Maui County, Laksmi Abraham, director of Communications and Government Affairs, said the County’s legal team has “thoroughly and conscientiously vetted Bill 9, and we are confident in its legality.” She argued that cases cited by Louie “are not applicable to the specific circumstances of Bill 9.”

“None of them address the phase-out of a use in the apartment district – something the counties are explicitly authorized to do under state law,” Abraham said.

Providing further context, on May 3, 2024, a day after Mayor Richard Bissen introduced Bill 9, Gov. Josh Green signed Senate Bill 2919 into state law. Green called its passage “a pivotal moment in tackling the short-term rental crisis in Hawaiʻi.” This bill clarified counties’ authority to control the time, place, manner, and duration of land uses, including short-term rentals. It explicitly states that furnishing transient accommodations is not considered residential or agricultural use and may be phased out or amortized by county zoning regulations.

Community impact and public testimony

Supporters of Bill 9 emphasized the need to address Maui’s housing crisis. Lahaina resident Mikey Burke framed the debate as a struggle between local residents being “priced off the island like we are strangers on it” and condo owners.

Burke urged council members to recognize generational residents’ rights to live in their homeland. “Maybe this is our moment to reclaim the rhythm of life our kūpuna knew, where the island wasn’t just a backdrop for someone’s vacation, but a living part of who we are,” she said.

She stressed the high stakes involved: “If we don’t act now, the real cost of losing is our people, our culture and our Maui. Every time someone is priced out, it’s not just a statistic – it’s a story. It’s a piece of our village. It’s a broken lineage. We must stop expecting housing to deliver killer investments. We need to unravel decades of policy that sacrificed our working class in the name of profit. Maui does not exist to serve someone’s investment portfolio. Maui is not a playground. This is our home, and it’s time we take it back.”

Jordan Ruidas, a member of Lahaina Strong and a lifetime resident of Honokōwai, described being “surrounded by Minatoya properties on three sides where I don’t have neighbors, just revolving doors of strangers and unfamiliar faces.” She said properties on the Minatoya List were never intended to remain vacation rentals indefinitely.

(The Minatoya List refers to a county-maintained list of properties grandfathered as legal ongoing vacation rentals in apartment districts.)

Ruidas, whose team visited more than 100 Minatoya properties, found a “high majority of these buildings are apartments – most of them with no workers, closed offices, a paper that says, ‘Write your license plate number here to register.’ These were our homes and should be our homes once again.” She implored council members: “Make the decision that will make your kūpuna, keiki and moʻopuna proud.”

Stephanie Smythe, a Lahaina resident and International Longshore and Warehouse Union member, strongly supported Bill 9, urging council members to “vote our way,” referencing their requests for union support during campaigns.

Opponents of Bill 9 expressed concerns about economic devastation and pushed back against being characterized as wealthy outsiders.

Mary Margaret Kerstulovich, a PTA and Little League board member who aids West Maui support efforts and feeds the homeless, said: “I don’t want to be seen as an extractor from the ʻāina or our South Maui community.” She urged the Council to engage local vendors and small businesses tied to tourism, noting that “so many people are afraid to testify.”

A Kīhei resident identifying as “Tom” acknowledged Maui’s housing crisis but opposed Bill 9, stating, “a solution that doesn’t address a problem isn’t really a solution.” He argued that most short-term rentals are not feasible as long-term residences for local residents due to costly homeowner association assessments, lack of parking, storage, and pet restrictions.

Tom predicted Bill 9 would “create another crisis,” devastating “the vast majority of small businesses on South Kīhei Road and adjacent to South Kīhei Road.” He warned of hundreds of businesses and thousands of employees being affected. “This will crush the local economy,” he said.

Arthur Castonguay, who manages six short-term rentals, agreed the bill would cause significant economic damage. “Many people will be hurt by this bill,” he said. He cited an example of a cleaner who earns around $10,000 monthly from his rentals, adding, “this bill will devastate both of us. She has children and says she’ll leave Maui if this bill passes.” Castonguay estimated 1,000 jobs for condo cleaners could be lost.

As an alternative, Castonguay suggested the County purchase units on the Minatoya List that are currently for sale and convert them into affordable homes. Such an approach, he argued, “would achieve the mayor’s (affordable housing) goal, but without hurting people. It won’t generate lawsuits and (be) much faster to do.” He proposed using tax dollars for purchases instead of legal defense and suggested using some of the $1.6 billion in federal wildfire recovery money, with property tax revenue funding further acquisitions of short-term rental units.

How to participate:

• Wednesday’s Housing and Land Use Committee meeting will be televised live beginning at 9 a.m. on Akakū Maui Community Media, cable Channel 53. It also can be viewed online via Teams at http://tinyurl.com/HLU-Committee
• To call in testimony, dial 1-808-977-4067, code 461 899 61#
• In-person testimony also is taken at the beginning of meetings in the eighth-floor Council Chamber at the Kalana O Maui Building, 200 South High St., in Wailuku.
• Written testimony will be accepted via eComment. Search for the meeting date on mauicounty.us/agendas, click on the eComment link, then select the agenda item to submit comments on.
• Also, written testimony may be submitted by email to HLU.committee@mauicounty.us, by fax to 808-270-7171, or to the HLU Committee, 200 South High St., Wailuku 96793. Written testimony should be received at least 24 hours prior to the meeting.
• Information regarding upcoming council and committee meetings, including instructions on how to provide testimony, can be found at mauicounty.us/agendas.