Maui passes bill to phase out vacation rentals

(CN) — Maui County Council voted 5-3 Monday to pass Bill 9, advancing Mayor Richard Bissen’s controversial proposal to phase out thousands of short-term vacation rentals in apartment-zoned districts across the island.

The legislation looks to convert at least 6,200 vacation rental units into long-term housing over the next three to five years, with West Maui properties required to transition by Jan. 1, 2029, and South Maui units by Jan. 1, 2031.

Council members Nohelani Uʻu-Hodgins, Tamara Paltin, Gabe Johnson, Keani Rawlins-Fernandez and Shane Sinenci voted in favor of the bill, while Council Chair Alice Lee, Vice Chair Yuki Lei Sugimura and Councilmember Tom Cook voted against it.

“This bill will disallow transient vacation rental uses in the apartment districts,” said Uʻu-Hodgins, who made the motion to pass the bill. “I will respectfully ask the members’ support for my motion.”

Lee, who has consistently opposed the measure, delivered a pointed critique before the vote, referencing a recommendation from a temporary investigative group that studied how to implement Bill 9.

“I’ve been in this business over 26 years and, honestly, this is one of the worst bills I’ve ever seen,” Lee said. “We cannot guarantee that every Planning Commission is going to vote for the TIG recommendations, that future councils will vote for the TIG recommendations, that future mayors and administrations are going to vote for the TIG recommendations.”

Part of the recommendations include new hotel zoning districts (H-3 and H-4) that would let 4,500 properties apply to keep operating as vacation rentals. But those zones don’t exist yet. They’d still have to go through planning commissions and council approval with public hearings.

The council will consider companion legislation Dec. 19 to create the new H-3 and H-4 hotel zoning districts. If both measures advance, only about 13% of Maui’s short-term rental inventory would ultimately be affected.

Rawlins-Fernandez addressed concerns about the TIG recommendations in her remarks.

“I wanted to clarify for our legislative record, which will be used in court, that the TIG recommendations are not a carve-out, because words matter,” she said. “It would be a zoning change that would go through its own public process.”

The measure now moves to Bissen, who proposed the legislation last year and is expected to sign it into law. Bissen, a former state court judge, has insisted that the controversial bill can survive legal challenges.

The council currently operates with eight members following the October death of Housing and Land Use Committee Chair Tasha Kama. Bissen appointed Uʻu-Hodgins to fill Kama’s seat. Kama had been one of three council members who voted against Bill 9 when it passed out of committee in July on a 6-3 vote.

Wildfire legacy shapes debate

The proposal emerged in the aftermath of the August 2023 wildfires that killed 102 people and destroyed approximately 5,500 homes in West Maui, a catastrophe that drew international attention and displaced more than 12,000 residents. The disaster intensified pressure on an already strained housing market that advocates say had long prioritized tourism profits over local housing needs.

“At least 12,000 residents were displaced by the Lahaina fire, and at least 2,000 homes were lost,” testified Rachel Coles, who works with Lahaina fire survivors. “As of 2025, there were still many families displaced or transitioning, including some of our best friends.”

Elizabeth Ray, a Lahaina resident calling in to the hearing from Hana, described the desperation facing fire survivors.

“There’s people here, and we just want somewhere to live and work,” Ray said. “Most people are working here. Lahaina fire survivors, they’re living in temporary homes, and they have to leave before Christmas.”

Supporters emphasized that the measure targets only grandfathered vacation rentals in residential zones — units that have operated under exemptions dating to a 1989 ordinance — while leaving approximately 23,000 other short-term rentals across Maui unaffected.

“There is a lot of uncertainty still in West Maui and Maui County, and I think it’s important to listen to the people that live here, that have lived here for generations,” Paltin said. “The community wants this passed, and I’m in full support of people over profits.”

Economic consequences

A University of Hawaii Economic Research Organization analysis warned of potential losses exceeding $60 million annually in property tax revenue, plus declines in general excise and transient accommodations taxes, if the bill is enacted. The study projected 1,900 lost jobs and $900 million in reduced visitor spending by 2029.

The same analysis found that more than 11,600 Maui households representing 21% of the island’s families already spend 30% or more of their income on housing and could afford to rent the converted units, particularly as property values and rental rates decline. The study estimates condo prices could decrease by 20% to 40%.

“Some of us are very concerned about the horrendous economic impact of such a bill,” Lee said.

Sugimura agreed, citing concerns about timing and revenue losses.

“Bill 9 represents a loss of roughly $65 million in real property taxes per year, along with an estimated $50 million in general excise tax and transient accommodations tax revenues,” Sugimura said. “The proposed solution is to offset those losses by raising taxes on you, the taxpayers, who are going to be burdened with the tax losses.”

Cook, who also voted against the bill, expressed support for expanding housing but skepticism about the bill’s approach.

“I would love to support this bill if I believed it was going to meet the goals and objectives of many people who have testified,” Cook said. “I represent South Maui, and this bill is more of a West Maui bill. I have not gotten a lot of support for this bill from my community.”

Rawlins-Fernandez defended the measure.

“Bill 9 is about getting closer to a quality of life we promised our residents when we campaign every other year,” she said. “Profits are replaceable. Generational communities are not.

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