The Maui County Council members passed Bill 9 on second and final reading Monday by the same 5-3 vote that advanced the controversial measure earlier this month. Later Monday, Mayor Richard Bissen signed the bill into law.

Bissen introduced the measure to phase out transient vacation rentals in apartment-zoned districts in May 2024. While the bill is expected to impact thousands of units mostly in South and West Maui, it will not impact 6,500 transient vacation rental parcels, along with thousands of units in hotels and more than 2,400 timeshare units and bed-and-breakfast operations.

In a news release Monday afternoon, Bissen said Bill 9 is about “restoring balance and prioritizing the needs of people who live in Maui County.”

“Bill 9 has consistently stood out as the most immediate way to bring thousands of units back online and expand housing inventory in Maui County,” Mayor Bissen said. “Today, transient vacation rentals make up 21% of Maui County’s overall housing stock — more than any other county in Hawaiʻi. For far too long, short-term rentals, offshore investors, and private interests have overwhelmed our housing inventory.”

As passed, the implementation dates would be Jan. 1, 2029, for West Maui; and Jan. 1, 2031, for the rest of Maui County. The delay in implementation gives short-term rental operators time to transition, or amortize, their properties to residential use.

Bill 9 has been one of the most contentious pieces of legislation for Maui County in recent memory, pitting the urgent housing needs of local residents against a transient accommodations industry built on visitor occupancy of apartment-zoned properties legally grandfathered because of prior vacation rental use.

The legislation sets in motion a process to return thousands of vacation rental units — mostly condominiums in West Maui and South Maui originally built for residential use — to the long-term housing market. The units currently operate as short-term rentals due to a grandfather clause. Exempted units are on the so-called “Minatoya List.”

Council members debate final passage

In their final comments on the bill, council members reiterated their debate over the balance between economic stability and the preservation of local housing, alongside a promise from council leadership to immediately address zoning for some existing properties.

Voting in favor of the bill were Council Members Tamara Paltin, Gabe Johnson, Keani Rawlins-Fernandez, Shane Sinenci and Nohelani Uʻu-Hodgins. Voting against the measure were Chair Alice Lee, Vice Chair Yuki Lei Sugimura and Council Member Tom Cook. The Kahului residency seat held by the late Council Member Tasha Kama remains vacant.

TIG recommendations set for Council discussion on Friday

Prior to the vote, Uʻu-Hodgins announced in a news release that policy responses from the Bill 9 Temporary Investigative Group will be taken up at the Council’s next meeting Friday. This includes Resolution 25-230, introduced by Cook, which proposes establishing H-3 and H-4 Hotel Districts .

Uʻu-Hodgins said the proposal is based on the TIG’s recommendation for new zoning districts to allow continued vacation rental uses at appropriate properties that now have apartment zoning, even after Bill 9’s five-year phase-out is complete.

“Throughout this process, we have sought to pursue an outcome that will benefit Maui County’s residents by promoting housing availability while stabilizing the economy,” Uʻu-Hodgins said. “Creating the H-3 and H-4 zoning districts is a step that could ensure a smoother transition after Bill 9’s passage.”

The proposed districts would be like-for-like with the A-1 and A-2 Apartment Districts, except that transient vacation rental uses would be permitted outright. Uʻu-Hodgins said that if the resolution is adopted, she plans to advance Council-initiated zoning changes for 4,500 units identified by the TIG as appropriate for ongoing use.

Changing their zoning from A-1 or A-2 to H-3 or H-4 would allow those units to continue operating as transient vacation rentals, even after they become banned in all apartment districts by Jan. 1, 2031, under Bill 9.

Support for Bill 9

Supporters of Bill 9 framed the decision as a necessary correction to prioritize local families over off-island investment, relying on the commitment that the zoning changes would follow.

“This bill is people over profits,” Johnson said. “It’s for the community over your checkbook. It’s for the workers over your LLC.”

Rawlins-Fernandez argued that the commodification of housing has gone too far.

“Profits are replaceable. Generational communities are not,” Rawlins-Fernandez said. “We need to prioritize the people who love our home that show up to protect our home.”

Paltin and Sinenci reiterated their support for the TIG’s recommendations as a companion to the phase-out.

“I feel committed to pass the H-3, H-4 legislation,” Paltin said at the bill’s first reading on Dec. 1. “I feel committed to those TIG parcels to balance it out.”

Sinenci echoed that sentiment.

“My vote and support also come with a commitment that I will support some forthcoming legislation, companion legislation, that will continue short-term uses in new zoning areas,” Sinenci said.

Angst over Bill 9’s economic impacts

Opponents of the bill, however, criticized the legislation as incomplete because the zoning changes were not incorporated directly into the bill passed Monday.

Lee expressed frustration that the TIG recommendations were not legally binding within Bill 9, leaving property owners without a guaranteed remedy.

“The only way it can work is if it has a mechanism of implementation,” Lee said. “And it doesn’t have it.”

Sugimura said she continued to oppose the bill because it represents a significant economic risk while the county’s economy remains fragile.

“You, the taxpayers are going to be burdened with the tax losses and without addressing the underlying revenue gap,” Sugimura said.

She cited the Bissen administration’s own financial analysis as estimating a roughly $65 million loss of real property taxes per year, along with an estimated $50 million in general excise and transient accommodations tax revenue.

Cook, representing South Maui, voted against the bill despite introducing the resolution for the new hotel districts. He noted that his district includes many part-time residents and small entrepreneurs who could be negatively impacted.

“I would gladly support the bill if I believed it was going to meet the goals and objectives of many of the people who have testified,” Cook said.

Divided public testimony

During public testimony, council members heard from 53 testifiers, both in-person and online.

Testimony in favor of the bill came from hospitality workers and housing advocates who argued the measure is essential for local residents’ survival, and opposition from property owners and realtors who warn of economic devastation and legal battles.

Several members of the International Longshore and Warehouse Union, which represents hotel and longshore workers, turned out to support the bill. They told council members that short-term rentals in condominiums are cannibalizing occupancy rates at traditional hotels, resulting in fewer work hours for residents.

Emmanuel Baltazar, a hotel worker and ILWU officer, told the council that vacation rentals in apartment districts are reducing shifts for union members.

William Forsyth, a former boat captain, echoed the sentiment that the bill would drive visitors back to hotels, boosting occupancy and tax revenue in areas designed for tourism.

“I believe the passage of Bill 9 will increase hotel zone occupancy rates,” Forsyth said. “From where they’re at currently, maybe 60%… to maybe 90%, which would be fantastic.”

Representatives from the Office of Hawaiian Affairs also testified in support. McKenna Woodward, testifying for OHA, cited data suggesting the bill could lower housing costs and return units to the residential pool.

“Bill 9 is a necessary course correction that prioritizes residents over speculation,” Woodward said. “Returning these units to long-term residential use, restores housing to its intended purpose, and supports a more stable, locally, rooted economy.”

However, opponents of the bill argued that the county is moving too fast and risking too much.

Lynette Pendergast, president of the Realtors Association of Maui, testified that while the association supports housing production, Bill 9 puts the cart before the horse. She urged the Council to first adopt recommendations from the Temporary Investigative Group regarding new hotel districts before cutting off existing permits.

“Proceeding in this sequence creates a significant policy gap that exposes the county to economic risk and legal liability,” Pendergast said. “Bill 9 would effectively eliminate lawful TVR use in apartment districts without providing a clear or timely pathway for property owners to apply for new land use designations.”

Individual owners warned of a massive financial shortfall if the bill passes. Brie Mathews, a short-term rental owner, questioned how the county would bridge the gap if tax revenues from these high-value properties plummet.

“What is the plan to replace jobs? What is the plan to replace revenue? What is the plan to fund affordable housing when all these revenue streams dry up?” Matthews asked. “Is there a plan at all to handle this financial fallout?”

Others raised concerns about the financing of properties involved in potential litigation. Leslie Brown testified that the bill could freeze real estate transactions for local families because banks are hesitant to lend on properties tied up in lawsuits.

“Banks will not loan money on a property involved in a lawsuit,” Brown said. “That means only cash buyers can purchase. Some people may not want to wait out a lawsuit and would be prime candidates to sell to Blackstone.”

For some long-term residents living in apartment-zoned condominiums, the issue is about quality of life and safety. Richard Prata, who has lived in a West Maui condo for decades, described how the influx of tourists has changed his home environment.

“I got scared to death,” Prata said, describing a specific incident. “I woke up all of a sudden, someone was standing in my living room with their suitcases and backpack on.”

Next steps

The bill’s passage ends its legislative phase, moving the battle over short-term vacation rentals in Maui County from the Council Chambers to courtrooms where extensive legal challenges are expected to the bill’s implementation.

Those challenges are likely to argue that Bill 9 amounts to an unconstitutional taking of property prohibited by the Fifth Amendment‘s takings clause.

In his news release, Bissen said that Bill 9 “corrects a long-standing zoning exemption that allowed transient vacation rentals to operate in apartment-zoned districts — areas originally intended to provide long-term housing for local families.”

By phasing out so-called Minatoya TVRs in these districts, the legislation is expected to return more than 6,000 units to long-term residential use, significantly expanding Maui County’s housing inventory without the need for new construction, according to the Bissen administration. Also, Bill 9 does not eliminate tourism or short-term rentals in Maui County. Approximately 6,500 TVR parcels, along with thousands of units in hotels, and more than 2,400 timeshares and bed-and-breakfast operations, will continue to operate.

Bissen said his administration was well aware that there would be a battle to reclaim vacation rentals for residential housing.

“We knew taking on powerful interests in the short-term rental industry was never going to be easy,” he said. “We’ve seen an influx of outside messaging driven by special interests attempting to influence our community through fear. But the facts matter. Ninety-four percent of the units affected are owned by people who don’t live in Maui County, and most don’t even live in Hawaiʻi. Decisions about Maui’s housing should be guided by the needs of the people who live here — not by outside interests trying to protect profits.”

Council Chair Lee also issued a news release recapping the Council’s action.

“This is one of the most challenging proposals to come before the council, and I am truly thankful for all of the testimony that was provided both for and against Bill 9,” she said. “That said, there is work to be done to address some of the issues identified with the bill and in identifying other solutions to Maui County’s housing shortage.”