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News on Maui for visitors

May 2024

 

While a consideration for many years, after the tragic fire in Lahaina and the loss of so many homes (some 2,000 homes and businesses were destroyed) the issue of affordable rental housing for local families became even more urgent. Even a full year after the fire, there are some more than 1500 Maui resident's living in FEMA funded hotel rooms and converted short term rentals. At the same time there are some 11,000 privately owned housing units used as short term vacation rentals (STVR) on the Island. 

 

In response, the state government passed legislation allowing the counties (Maui is a county in Hawaii that includes Lanai and Molokai) to regulate or ban short term vacation rentals in their locales.  Currently Maui is proposing, with the support of its Mayor, a ban on all short term vacation rentals that are situated in apartment zoned areas (the Sands of Kahana is not affected as it is in the Hotel zone).  Maui zoning is roughly divided into Agricultural, Residential, Apartment and Hotel.  Since the 1970's short term vacation rentals were allowed in Apartment zones under special legislation. Every unit allowed was granted a separate allowance and these are recorded in something called the Minatoya list.  The proposed legislation will remove this allowance and prohibit any unit in these zones from being lease out for any terms less than 180 days, essentially converting them into long term rentals or permanent residences. These units represent more than 80% of all STVRs on the Island. 

This proposed legislation is of course highly controversial and likely to be challenged in court if passed in this form. Owners of STVR argue that its unconstitutional to take away a grandfathered right to manage a home from its owners, that 6 months is insufficient time to adjust, that very few STRVs (which are mostly 1-2 bedrooms with high HOA fees) are suitable for long term affordable housing for locals. But likely the most compelling argument is that loss of tax income to the state from the ban. STVRs are taxed at a very high rate and the loss of this income combined with the costs of rebuilding Lahaina will then have to be shifted to local property owners.  Not a popular option. 

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