Owners claim Maui residents can't afford converted vacation rentals, UH study says otherwise

Yahoo

9 hours ago

Owners and managers of Maui short-term vacation rentals have argued during two days of public hearings that local residents cannot afford the rent if 6, 100 units are converted into long-term housing, as proposed by Mayor Richard Bissen.
Residents who also testified before the Maui County Council last week in support of Bill 9 repeatedly have called the claim offensive.
An economic analysis by the University of Hawaii Economic Research Organization backs up the residents' testimony. The analysis shows that over 11, 600 Maui households—or 21 % of all households on the island—already use 30 % of their incomes to pay for housing and could afford to move into converted units because the owners would see their tax rate fall to Maui County's lowest rate as the value of their homes continues to drop.
The pool of Maui residents already paying even more of their incomes for housing is even greater. An additional 15, 500 Maui households use 30 % to 50 % of their incomes toward housing, according to the UHERO analysis, and they also could afford to rent converted vacation rentals, meaning long-term housing for a total of over 27, 100 Maui households.
Matt Jachowski, one of Bissen's executive assistants, told the Honolulu Star-Advertiser, 'Many of our households already spend that range of money on housing.'
Some '27 % of all renters in the county are already cost-burdened, ' Jachowski said. 'So it's obtainable.'
The Maui County Council's Housing and Land Use Committee will have to vet the competing claims when it resumes hearings all day Monday and again Tuesday night. All nine members of the Council serve on the committee, so the committee vote on Bill 9 will provide a strong indicator of how the full Council will act on the measure.
If approved, Bill 9 would take effect in West Maui by July 1, 2028.
The units in question represent less than half of Maui's estimated 13, 000 legal short-term vacation rentals, and Bissen previously told the Star-Advertiser that tourists remain welcome on Maui.
Bissen said he wants to free up housing for local residents and bring better balance to the proportion of vacation rentals on Maui, which has more short-term vacation rentals than even Oahu.
On Maui, temporary vacation rentals make up 21 % of the housing inventory.
'Maui is this complete outlier in how many TVRs we have, ' said Jachowski, noting the figure is only 3 % for London, which has the highest percentage of housing dedicated to transient vacation rentals compared to Los Angeles, Boston and Barcelona.
UHERO ALSO reported that the total monthly cost of housing for Maui residents to move into a converted short-term vacation rental also would fall, from $5, 829 to $4, 601, because of declining property values and taxes.
Maui County witnessed eight consecutive years of increased condo sales prices, from $402, 000 in 2016 to $900, 500 in 2024. But prices dropped for the first time since 2016 after Bissen introduced Bill 9.
In the first five months of 2025, the average sales price has fallen from $900, 500 to $760, 000.
Several owners of short-term rentals and their property managers have testified that no one wants to buy on Maui since Bill 9 was introduced, especially potential out-of-state investors who would be barred from renting them to tourists for their vacations.
Owners' monthly cost for a vacation rental, including mortgage, insurance, association fees and other expenses, were running at $5, 800 per month, Jachowski said. Now, with Bill 9 on the table, the costs have fallen to $4, 601 per month, putting the lower price within reach of the 27, 100 Maui residents who already pay that much, he said.
UHERO looked at other cities that now restrict 1 % of their short-term vacation rentals and found that housing prices and rents fell by 4 % in Los Angeles and London and by lesser amounts in Barcelona and Boston.
Bill 9 would 'revert ' all apartment district properties to long-term residential use and remove the exception for transient vacation rental units built or approved before 1989.
For Maui residents who can afford to buy one of the converted units, the tax rates would plummet from $12.50 per $1, 000 of value to just $5 for an owner-occupied unit, Jachowski said.
BISSEN spokesperson Laksmi Abraham acknowledged UHERO's expectation of job losses in Maui's short-term vacation rental industry but said there will still be a need for workers in the nearly 9, 000 remaining vacation rentals, including plumbers, electricians and others to work on the units that convert to long-term housing.
Short-term rentals average only 53 % occupancy annually, and Abraham said those that remain for tourists 'will see an uptick in their occupancy and they're still going to need somebody to manage a lot of these units. There will be impact, but the transition won't be as drastic as UHERO paints it to be.'
At the same time, Ja ­chow ­ski noted that UHERO said that as the 'affordability of housing improves, housing costs are also going down, and that's important.'
Maui short-term vacation rental owners and their property managers also have repeatedly argued that local residents do not want to live in their one-and two-bedroom units—a claim residents also called offensive.
Data compiled in the aftermath of the Aug. 8, 2023, wildfire that destroyed 3, 500 homes in Lahaina backs up local renters. Many of them have scrambled over the last two years to find and afford increasingly expensive long-term housing.
Before the disaster, many survivors were living in large multigenerational homes that were destroyed. Since then, the Federal Emergency Management Agency and the Council for Native Hawaiian Advancement had the highest demand for one-and two-bedroom units as individual, smaller family units that used to live in multigenerational homes searched for housing for themselves, Jachowski said.
'The data clearly shows we have a lot of households that are smaller and could benefit from smaller homes, ' he said.
IN 2024, Gov. Josh Green signed Senate Bill 2919 into law clarifying that each county has the authority to determine what to do with transient vacation rentals as the state faced an ongoing shortage of 50, 000 homes.
Bissen was the first to respond with Bill 9.
Bissen and Green have repeatedly said Maui and the state cannot build their way out of the lack of housing. To them, converting vacation rentals into long-term housing represents the most logical path forward.
State Rep. Luke Evslin (D, Wailua-Lihue ), who chairs the House Committee on Housing, has been working on ideas ahead of the next legislative session to create more housing but said the counties now control the future of their own short-term vacation rentals.
'We've done all we can do on the short-term vacation issue, ' Evslin said. 'At this point, it's up to them.'
Several members of the Honolulu City Council's Housing, Homelessness and Parks Committee did not respond to Star-Advertiser requests for comment on what they might do about converting Oahu's short-term vacation rentals.
Matt Weyer, who serves on the housing committee, said he's more interested in cracking down on the estimated 118 to 120 illegal short-term rental units in his district, especially in residential and rural areas around Turtle Bay Resort.
Weyer's Council district stretches across the North Shore down to the upper Windward side and as far south as Mililani.
In the North Shore alone, Weyer said, there are about 262 legal short-term rentals, and he has not heard an outcry from residents to convert them into long-term housing.
'I wouldn't say phasing them out would solve the problems we're facing, ' he said. 'We're looking at how we can best target illegal vacation rentals … by enforcing the existing laws. That's the struggle. We want to ensure that folks that are doing it illegally are doing it legally. That really creates the biggest impact.'
U.S. Rep. Jill Tokuda, whose district includes rural Oahu and the neighbor islands, said that converting Maui's 6, 100 short-term vacation rentals into long-term housing might help the island's housing shortage and stem the exodus of local residents to the mainland.
'We've got to do something, ' Tokuda said. 'It's going to require some bold, pretty bold action to keep people here and to free up available units for local families. If not, they're going to keep leaving.'