Op-Ed: Proposed STR phase-out will devastate Maui’s economy and workers

Op-Ed: “Proposed STR Phase-Out Will Devastate Maui’s Economy and Workers”
Written by John Kevan, general manager and principal broker, MPP

As a 25-year resident, small business owner and managing partner of Maui Paradise Properties (MPP), I strongly oppose Bill 9, legislation aimed at phasing out over 6,000 short-term rentals across Maui County.

My company employs 80 individuals and collaborates with 70 local independent contractors supporting the tourism market. We manage over 130 long-term rental units, including 81 obtained for FEMA, and 320 short-term rental units, with 161 on the Minatoya list. Twenty-three of our employees were displaced in the Lahaina fire and although we faced enormous loses—losing two offices, two warehouses and a laundry facility—we’ve remained committed to our community.

The proposed phase-out would be economically devastating. For our company alone, eliminating these units would result in approximately 40 direct employee layoffs. Additionally, we would need to terminate contracts with five cleaning companies (affecting 20 workers) and reduce work for our outside contractors (plumbers, electricians, handymen), resulting in another three to four jobs lost. In total, about 62 workers would be directly impacted, not counting downstream effects on restaurants, activity companies and wedding planners.

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In 2022, our company collected $38 million in tourism revenue. Even after the fire in 2023, we generated $31.3 million, of which $5.4 million went to GET/TAT/MCTAT taxes, $18 million to local salaries and contractors and $8 million to property owners—the majority of which circulates back into Maui’s economy through HOA dues, insurance, utilities, maintenance, resort fees and property taxes.

The argument that converting these units to long term rentals would solve our housing crisis is severely flawed. Following the standard recommendation that 30% of salary should go towards housing, it can be difficult to qualify for a 6%+ mortgage with a 20% down payment alone. Factor in rising monthly HOA fees due to property and hurricane insurance and special assessments that most condominium buildings face every three to seven years, the monthly rent or mortgage payment could be anywhere from $5,000 to $7,000-plus for a small unit in West Maui. With slow condo sales due to the uncertainty of Maui’s phaseout of short term rentals and a 44.4% decrease in price compared to a year ago, there is still minimal interest from local buyers. The numbers just don’t add up.

Our company has demonstrated our commitment to Maui through various community initiatives: working with property owners to donate over $300,000 to fire victims, providing over 3,000 free nights to victims and support personnel, offering scholarships and internship programs, supporting beach cleanups and developing tourism sustainability ideas.

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There are better solutions than this drastic measure that would cripple our local economy and put hundreds of residents out of work. Even the proposed phase-out would result in a slow death. At MPP, we’re willing to open our books to Council and demonstrate the real economic impacts of short-term rentals on our island community.

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We all want affordable housing for our people and families. But this proposed legislation isn’t the answer. Instead, we should be exploring alternatives that don’t sacrifice the livelihoods of local workers and businesses. Let’s work together to find solutions that strengthen—not weaken—our island’s economy during this critical recovery period.

About the Author:

Kevan is a member of Maui Vacation Rental Association (MVRA). He resides in Lahaina/Launiupoko.

*****Views expressed in Op-Ed pieces are those of the author’s alone and do not reflect or represent the opinions, policies or positions of Maui Now.*****