Maui County Proposal Aims to Turn Vacation Rentals into Long Term Housing

What You Need to Know

Maui County Proposal Aims to Turn Vacation Rentals into Long-Term Housing: What You Need to Know

Maui is facing a growing housing crisis — one that's intensified in the wake of the devastating Lahaina wildfires of 2023. In an effort to address the urgent need for affordable housing, Maui County is considering a controversial new proposal: Bill 9, which aims to phase out thousands of short-term vacation rentals and convert them into long-term housing for local residents.

The Maui County Council voted to legalize Minatoya condos for short-term vacation rentals in 2015. This decision codified a prior legal opinion from county attorney Richard Minatoya, allowing these condos to continue operating as short-term rentals. The "Minatoya List" refers to properties built before 1992 in apartment-zoned areas that were grandfathered in to allow short-term rentals.

The Housing Crisis in Maui

More than 50% of Maui residents are “rent-burdened”, meaning they spend over 30% of their income on rent. Even more alarming, a quarter are “severely rent-burdened,” spending over half their income just to keep a roof over their heads.

The situation worsened after the August 2023 wildfires, which destroyed over 2,200 structures, killed 102 people, and left thousands displaced. Today, many are still without permanent homes, and the county is under pressure to act.

Bill 9: What’s Being Proposed?

Introduced by Mayor Richard Bissen, Bill 9 proposes to phase out short-term rentals — also called transient vacation rentals (TVRs) — in apartment-zoned areas by 2026. These properties, totaling around 6,000 units, make up over half of Maui’s legal vacation rentals and are listed on what's known as the “Minatoya list.”

Originally granted an exemption in 2001, these units have operated legally in apartment zones even though they weren’t intended for short-term use. Most are located in South and West Maui and are primarily owned by out-of-state investors.

Why It Matters

Mayor Bissen has emphasized the urgent need for long-term housing:

“Maui’s housing market has become increasingly out of reach, a crisis worsened by the events of August 8... This issue extends beyond disaster recovery — it’s about our future.”

By converting these units, the County hopes to increase the supply of long-term rentals and reduce displacement of local families.

Economic Impacts: A Double-Edged Sword

A University of Hawaiʻi Economic Research Organization (UHERO) analysis warns of potential downsides. Key findings include:

• $900 million annual drop in visitor spending
• 1,900 jobs lost, particularly in hospitality and services
• Significant effects on Maui’s economy, where tourism supports over 22,000 jobs and brought in $6 billion in visitor spending in 2022

While the bill aims to help residents, these economic risks are causing concern among business owners, property managers, and tourism advocates.

Suggested Improvements to the Bill

To reduce the economic fallout, UHERO recommends:

• Gradual phase-out, either geographically or over longer timelines
• Lottery-based transitions to better manage inventory
• Rezoning or special permits to allow some TVRs where appropriate

A Walk-Back on Scope

At a March 2025 community meeting in South Maui, Mayor Bissen revised his plan, indicating that only about 2,000 of the 6,000 TVRs may meet the criteria for conversion to long-term housing. The rest, while legally operating as vacation rentals, may not have originally been intended for workforce housing.

What Else Is Being Done?

In addition to Bill 9, Mayor Bissen is working with state leaders on:

• Cutting red tape to accelerate housing development
• Offering tax incentives and deed restriction programs
• Exploring public-private partnerships and inclusionary housing policies

Timeline at a Glance

• 1989 – Maui enacts Ordinance 1797 to limit TVRs in apartment zones
• 2001 – “Minatoya list” created to grandfather existing short-term rentals
• Aug 2023 – Lahaina wildfires destroy over 2,200 structures
• May 2024 – Mayor Bissen announces plan to flip Minatoya list rentals
• Mar 2025 – Revised proposal lowers number of units to ~2,000
• Mar 31, 2025 – UHERO analysis highlights economic concerns

What’s Next?

Bill 9 is expected to be reviewed by the Maui County Council’s Housing and Land Use Committee in mid-May or early June 2025. Evening sessions will allow more local residents to share their thoughts and testimonies.

Final Thoughts

This is a pivotal moment for Maui County. The push to balance the needs of local families with the realities of a tourism-driven economy is complex. Whether Bill 9 becomes law in its current form or is modified significantly, one thing is clear: solving Maui’s housing crisis will require bold decisions — and shared sacrifice.

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