HLU-4 Bill 9 (2025) BILL 9 (2025), AMENDING CHAPTERS 19.12, 19.32, AND 19.37, MAUI COUNTY CODE, RELATING TO TRANSIENT VACATION RENTALS IN APARTMENT DISTRICTS (HLU-4)
From someone who lives/rents long term at a minatoya property, vote yes on bill 9. I want to get something straight. I listened to every testimony on 6/9 and one thing stood out. Opposers saying that minatoya properties aren’t fit for long term residential use. IVE LIVED AT A MINATOYA PROPERTY FOR THE LAST 7 YEARS. I couldn’t imagine living anywhere else. My condo is my home. I am comfortable, I have enough room, and despite the lies of the opposition, my rent remains on the low end of what’s currently on the rental market. Yes there is an HOA and insurance has gone up since the fires. I pay $1950 for a 2 bed/2 bath with an ocean view. Listening to the testimonies of opposers, not ONE native Hawaiian may I add, has been sickening. As a transplant, yall should be ashamed of yourselves for your disgusting entitlement. To have the audacity to stand up in front of a room full of local and indigenous people who are begging for some relief from the housing crisis and complain about the economy is so insanely insensitive and tone deaf. I hope this bill passes and we get to watch you melt down about how unfair it is that YOU made a bad, risky investment. Read the room. VOTE YES ON BILL 9!
Pay attention to how “affordable” and “available” you think these STR units will be if this Bill passes. You cannot guarantee either. I have been offering my unit as a long term rental since the fires happened. No one local can afford to rent it for the amount needed to cover the mortgage plus HOA fees ((which are horrendous) plus insurance expense plus property tax (also horrendous) plus assessments by the HOA that all need to be paid monthly. So I am subsidizing the family who lives there now. Will you - Maui government- pay the difference so that I can continue to afford to provide housing long term??? I am not a greedy corporation. I love Maui. I have invested in Maui. I’m not making big profits at a locals expense. Far from it. And I’d be willing to bet most STR owners are just like me. Just because you ave the ability to potentially ban STRs in these properties does not guarantee local housing options for anyone.
Subject: Strong Support for Maui Bill 9 – Phasing Out Vacation Rentals in Apartment and Residential Zoned Areas
Aloha Esteemed Council Members,
I am writing to express my full support for Maui Bill 9, which aims to phase out vacation rentals in apartment and residential-zoned areas. This bill is a necessary step toward protecting housing for residents and kanaka maoli who are struggling to find and afford homes in our community.
The increasing presence of short-term vacation rentals has significantly reduced the availability of long-term housing, driving up prices and making it difficult for local families to remain in the neighborhoods where they have deep roots. While tourism is an important part of Maui’s economy, it cannot come at the expense of the well-being and stability of our local communities.
Housing should be for residents first, not for short-term visitors. Every Maui family deserves access to affordable, secureplaces to live, without competition from investors profiting from vacation rentals. Phasing out these rentals in apartment zones will help restore balance, ensuring that homes serve their intended purpose—providing shelter for those who call this island home.
I urge the Council to move forward with this bill and take decisive action in protecting the integrity of Maui’s neighborhoods. Mahalo for your leadership and commitment to the people of Maui.
Heidi Kreul
LS says tourists that stay in STR's are "Cheap Tourists" So they only want the rich tourists? Yet they complain that all STR owners care about is money. Do you think the Hotels came here because of the community, or just profit? The Grand Wailea Resort is currently owned by BRE Hotels & Resorts, a company that is part of the Blackstone Group who's HQ in in New York. The Grand Wailea Resort uses over 500,000 gallons per day! Is this is misplaced aggression? A knee jerk emotional reaction stemming from a tragedy? I don't know, but what we need is industry. UHERO - 66k jobs, 6Billion, 60M in tax and you call them Cheap cause they shop at costco, walmart, target and safeway like we all do? Will costco still stay on maui? How many people do these CHEAP institution employ? You are cutting your nose in spite of your face.
I am born & raised on Maui and have proudly worked in the hospitality industry for over 43 years. This career has given me the chance to grow personally and professionally starting at the bottom and working my way up. Along the way, I’ve had the privilege of meeting people from all over the world and forming lasting relationships with both guests and homeowners. I genuinely love what I do, and I am not ready to retire.
The proposed bill, however, deeply concerns me. If it passes, it could threaten not only my livelihood, but the livelihoods of many others in our industry. Starting over at this stage in my life, with so many others likely seeking the same limited number of jobs, would be incredibly difficult. The uncertainty is frightening.
As a local born and raised on the island, I understand and support the need for more affordable housing. But I question whether this is the right path. Areas like Wailea are not realistic locations for working-class families to live. The cost of housing there is simply out of reach for most locals.
Eliminating transient vacation rentals will also have a major impact on our economy. These accommodations allow a wider range of visitors to experience our island—people who may not be able to afford traditional hotels. They contribute to our local businesses, restaurants, and shops, supporting countless jobs and families along the way.
I respectfully urge you to reconsider the direction of this bill. The unintended consequences could hurt Maui far more than help.
My wife and I love Maui and have been visiting for 40 years. We always had a dream of owning a condo on the island and that dream finally came true in 2017. We never intended to purchase it specifically to use as a STR but it was already being managed as one and we kept it in the rental pool. It rents a handful of times per year and doesn't come close to covering all the costs but it doesn't hurt either. We spend about 3 months a year total in Maui. Unfortunately, we are now considered "greedy off-islanders". We have no intention of selling our condo or converting to a long-term rental regardless of the outcome of this proposal. If it passes, our condo, rather than having occasional visitors in our absence who patronize the local restaurants, activities, etc., will sit vacant until we return and the myriad of local businesses connected to the STR industry will suffer. By the way, those people are all full-time residents on Maui. Why do you want to hurt one group of people to try to please another? Rather than dated one- bedroom condos with no storage or parking and sky-high HOA fees, Maui needs to fast-track the building of more suitable affordable housing that caters to full-time families. Please use common sense.
Something that I didn't hear being brought up. Maui Sands property is on leased land with 13 years left on the lease. That means for a property like mine in the complex the HOA fees are $1700/mo and the Lease fee is $1500/mo before any mortgage, insurance, utilities. In addition no lending institutions will do a mortgage loan on leased land with less than 20 years left on the lease. In essence it costs 43k/yr without the property taxes. This complex offers 1 parking stall per unit, no spa, no concierge. It was built in 1965 and was originally zoned a Contel. A condo/hotel, then changed to apt. With this in mind, this property would not be affordable for most unless STR is available.
Thank you for listening to my suggestion for Lahaina STR's. There are a lot of people on both sides with valid concerns, keep the local Hawaiian on their island and keeping tourism to help the county survive. One suggestion is to come to the table with compromise. Why wouldn't you take Lahaina Lower Honopiilani road and go down the middle of the road and what is one the beach side you keep as "resorts" like Hale Mahina Beach Resort and make all of those unit STR's. On the other side you make it all LTR's as they are not on the beach water side and imho do not qualify as a "resort". Could work for all STR's on the beach side. Just a suggestion and compromise is all.
Our family is amongst the thousands of other residents who will be unfairly and negatively affected if Bill 9 is passed. We believe this bill, to phase out legal Short Term Vacation rentals, will create many more problems than it will solve.
Solving Maui's years-long housing shortage is important, but it should not involve taking away the legal rights of homeowners in our community. There will be costly legal setbacks and it will significantly disrupt the livelihoods of most homeowners in Maui, due to the likelihood of declining property values of all homes.
Not passing this bill does not equate to "doing nothing". Not passing Bill 9 helps Maui avoid an unnecessary economic nosedive and will avoid the unwelcome negative effects that will harm the lives of thousands of families.
One sensible approach would be to better utilize the multimillions of property tax dollars, collected from homeowners of Short Term Rentals, to help fund the planning and building of viable, affordable homes.
Respectfully,
Diane Michaelis
Maalaea
Additional Cost estimate: Two billion one hundred million dollars ($2,100,000,000).
The Hawaii Constitution, Article I, Section 20 guarantees that private property shall not be taken or damaged for public use without just compensation. This is known as the Eminent Domain Clause. The government has the power of eminent domain, meaning it can take private property for public use even if the owner doesn't want to sell. However, this power is limited by the Fifth Amendment to the U.S. Constitution (which is applicable to the states through the Fourteenth Amendment).
Similar rights are embedded in the and the Hawaii Constitution, Article I, Section 20.
The Takings Clause of the Fifth Amendment to the United States Constitution states, "...nor shall private property be taken for public use, without just compensation".
Regulatory Takings: Even if the government doesn't physically seize property, a change in regulation, such as rezoning, can be considered a "taking" if it severely restricts the owner's ability to use their property.
Hawaii's Self-Executing Takings Clause: The Hawaii State Constitution's Takings Clause is "self-executing," meaning it automatically provides a remedy (compensation) when property is taken or damaged.
Tangent: The Maui County budget for fiscal year 2026 is $1.56 billion.
Assuming Bill 9 passes, and assuming it survives legal challenges, the County of Maui will be on the hook to compensate the owners of 7000 properties for the taking of a vested property right under the US and Hawaii State Constitutions.
Nothing is more vested than a statutorily codified property right.
The Minatoya list was codified. The history of the Minatoya list can be found in Bill 9. Quoting from Bill 9, Section One: "In 2014, Ordinance 4167 codified Ordinance 1797's exceptions and allowed structures built or approved before April 20, 1989, to have Transient Vacation Rentals in the Apartment Districts. Subsection 19.12.020(G), Maui County Code, was later modified several times to add criteria to qualify for the
exceptions."
Assume that the average loss in value of short term vacation rental re-zoning is $300,000.00 to each property. Assume that this taking applies to 7000 properties. That taking will cost the County not just economic impact to its tourist industry, but for the taking of property rights to 7000 property owners pursuant to the US and Hawaii Constitutions.
$300,000.00 multiplied by 7000 totals two billion one hundred million dollars ($2,100,000,000).
I am the Trustee of a Trust from my late wife’s estate which has owned a one bedroom condo unit in the Palms at Wailea for more than 20 years. Although we were not residents of Maui, my and I family use the unit for at several months every year and expect to continue to do so. During the times when we are not using the premises for ourselves, we rented it as a lawful vacation rental to offset some of the cost of ownership.
I am aware of the proposal to prevent short term rentals on a number of previously lawful units in an effort to address an obvious housing shortage on Maui. I appreciate the goals of the program to increase available housing, and I am certainly am aware of the politics of the situation. And, although there may be some units that could be converted into long term rentals, for a number of reasons units like mine are not among them. Even if were otherwise feasible, since my family and I use the unit for extended periods of time, it would not add to Maui’s housing stock, even if there is a ban on short term rentals.
From some of the Mayor's public comments on the short-term rental ban proposal, I am not naive and do not expect my thoughts to change many minds on this issue. Yet I remain hopeful that you will consider the undeniable facts presented and realize the many problems that this proposal will create, the probability that it will not withstand judicial scrutiny, and the interim chaos, budgetary and adverse economic consequences that will result.
I know that you have been inundated with “facts” and opinions about the economic impact to the County of a ban on short term rentals, not only on the direct budget loss of GET and real property tax revenue, as well as the indirect, but very real impact on tourism and tourism related dollars and employment. Though one may disagree with the magnitude of the economic consequences of a short term rental ban, that outcome is certainly very real at some level. The full impact of this proposal will not occur for months or years, by which time it will be too late to fix it. At the same time, whether or not one believes that a ban on short term rentals will lead to more housing for full time Maui residents, it is necessary to recognize that the one size fits all ban just doesn’t fit many circumstances, and will not necessarily lead to much “affordable” housing.
There are indisputable facts applicable to my premises and many others similar to it, which make it impossible to convert them to an affordable long term rental. For example, my unit is one bedroom, with one bed and one assigned parking space. The HOA prevents pets and smoking, and the fire code prohibits outdoor grills. More significantly, the monthly HOA expenses for the unit are approximately $1,500, and real property taxes are another $1,500 per month. Insurance and utilities are more than $500 per month, and a mortgage is more than $2,100 per month. Thus, without even including ongoing maintenance, such as plumbers and necessary repairs and replacements, the monthly expense alone to operate the apartment exceeds $5,600 per month. Thus merely to break even, rent for my one bedroom unit would have to be significantly more than $6,000, an amount that virtually no one in need of "affordable" housing could afford to pay for a one bedroom unit that was never designed or intended for long term rental.
Even if someone could afford a long term rental of my premises, I would be deprived of the use of the unit, which is the sole reason for owning it in the first place. Leaving it unoccupied when I am not on Island will not add to Maui’s usable housing stock, but the County would be deprived of significant GET revenue. Even if I were to sell it, the HOA fee would not go down, and even if the real estate tax decreased some, it would still be unaffordable as a long term rental. Maui’s tax revenue (entirely aside from the GET tax loss) would go down as well–in addition to throwing hundreds, if not thousands of people out of work.
Again, I understand the short term political appeal to some of the proposed ban. However, I am an attorney, and as I’m sure you have been advised, the proposed short term rental ban of properties that have been lawfully permitted for decades, will certainly be challenged in Court, and is unlikely to withstand constitutional scrutiny since it is a “taking” under the Fifth and Fourteenth Amendments to the U.S. Constitution, and likely under Hawaii law as well. I’ve heard the Mayor quoted as saying something along the lines that “all real estate investment involves speculation.” While that statement is true in the abstract, it is not true where the government changes the rules after the fact. That’s not “speculation,” but rather a prohibited taking which requires just compensation. Accordingly, the prohibition on previously legal short term rentals will undoubtedly lead to expensive litigation which, as an attorney, I am confident that the County will lose. But even if they won, they could be forced to pay tens of millions of dollars in compensation to those whose properties was "taken," by the ban.
So the bottom line of the proposed short term rental ban is this: (1) With respect to my unit, and many others like it, it will not lead to more housing, and certainly not affordable housing; (2) It will cause a significant loss in tax revenue to the County; (3) There will be indirect adverse economic loss to the county and loss of employment to the very people who need the help of affordable housing; and (4) The ban will not withstand a Constitutional challenge.
Though well intentioned, the proposal to ban short term rentals will not help the situation–but rather make it worse. I respectfully urge you to reconsider it, or at least tailor it to address units that could in fact increase affordable housing.
The presentation from the Mayors team show that of the 7000 units, Maui residents own 352. Seeing all the off-islands investments convert to long term rentals or possibly turn over to Maui residents would be the best outcome. While we cannot be assured this will happen, if we pass Bill 9 there will be a chance of improvement. If we fail, to pass bill 9 we are assured zero change. We can deal with the court challenges. The Mayor addressed the financial impact. As a community, we can overcome anything if we work together.
We have too many residents struggling for housing. We have too many disruptions in our neighborhoods. We can do this.
Aloha HSLU committee member,
Thank you for continuing to hear testimony. I want to clarify that I support the Mayor's proposed CD1 of Bill 9 as it adds clarity and legality to the proposed bill given current circumstances.
I support a full phase out of ALL short term rentals in apartment zoning as this is the most legally defensible way to achieve the intended goal and there is already a process (Change in Zoning & Change in Community Plan Designation) to allow community input on individual properties that may wish to continue.
Please support the Mayor's CD1 of Bill 9.
Mahalo for you dedication in serving our community,
Karen Comcowich
Lahaina, HI
From someone who lives/rents long term at a minatoya property, vote yes on bill 9. I want to get something straight. I listened to every testimony on 6/9 and one thing stood out. Opposers saying that minatoya properties aren’t fit for long term residential use. IVE LIVED AT A MINATOYA PROPERTY FOR THE LAST 7 YEARS. I couldn’t imagine living anywhere else. My condo is my home. I am comfortable, I have enough room, and despite the lies of the opposition, my rent remains on the low end of what’s currently on the rental market. Yes there is an HOA and insurance has gone up since the fires. I pay $1950 for a 2 bed/2 bath with an ocean view. Listening to the testimonies of opposers, not ONE native Hawaiian may I add, has been sickening. As a transplant, yall should be ashamed of yourselves for your disgusting entitlement. To have the audacity to stand up in front of a room full of local and indigenous people who are begging for some relief from the housing crisis and complain about the economy is so insanely insensitive and tone deaf. I hope this bill passes and we get to watch you melt down about how unfair it is that YOU made a bad, risky investment. Read the room. VOTE YES ON BILL 9!
Pay attention to how “affordable” and “available” you think these STR units will be if this Bill passes. You cannot guarantee either. I have been offering my unit as a long term rental since the fires happened. No one local can afford to rent it for the amount needed to cover the mortgage plus HOA fees ((which are horrendous) plus insurance expense plus property tax (also horrendous) plus assessments by the HOA that all need to be paid monthly. So I am subsidizing the family who lives there now. Will you - Maui government- pay the difference so that I can continue to afford to provide housing long term??? I am not a greedy corporation. I love Maui. I have invested in Maui. I’m not making big profits at a locals expense. Far from it. And I’d be willing to bet most STR owners are just like me. Just because you ave the ability to potentially ban STRs in these properties does not guarantee local housing options for anyone.
Subject: Strong Support for Maui Bill 9 – Phasing Out Vacation Rentals in Apartment and Residential Zoned Areas
Aloha Esteemed Council Members,
I am writing to express my full support for Maui Bill 9, which aims to phase out vacation rentals in apartment and residential-zoned areas. This bill is a necessary step toward protecting housing for residents and kanaka maoli who are struggling to find and afford homes in our community.
The increasing presence of short-term vacation rentals has significantly reduced the availability of long-term housing, driving up prices and making it difficult for local families to remain in the neighborhoods where they have deep roots. While tourism is an important part of Maui’s economy, it cannot come at the expense of the well-being and stability of our local communities.
Housing should be for residents first, not for short-term visitors. Every Maui family deserves access to affordable, secureplaces to live, without competition from investors profiting from vacation rentals. Phasing out these rentals in apartment zones will help restore balance, ensuring that homes serve their intended purpose—providing shelter for those who call this island home.
I urge the Council to move forward with this bill and take decisive action in protecting the integrity of Maui’s neighborhoods. Mahalo for your leadership and commitment to the people of Maui.
Heidi Kreul
LS says tourists that stay in STR's are "Cheap Tourists" So they only want the rich tourists? Yet they complain that all STR owners care about is money. Do you think the Hotels came here because of the community, or just profit? The Grand Wailea Resort is currently owned by BRE Hotels & Resorts, a company that is part of the Blackstone Group who's HQ in in New York. The Grand Wailea Resort uses over 500,000 gallons per day! Is this is misplaced aggression? A knee jerk emotional reaction stemming from a tragedy? I don't know, but what we need is industry. UHERO - 66k jobs, 6Billion, 60M in tax and you call them Cheap cause they shop at costco, walmart, target and safeway like we all do? Will costco still stay on maui? How many people do these CHEAP institution employ? You are cutting your nose in spite of your face.
Keep Lahaina lands in Lahaina hands
I support bill #9.
I am born & raised on Maui and have proudly worked in the hospitality industry for over 43 years. This career has given me the chance to grow personally and professionally starting at the bottom and working my way up. Along the way, I’ve had the privilege of meeting people from all over the world and forming lasting relationships with both guests and homeowners. I genuinely love what I do, and I am not ready to retire.
The proposed bill, however, deeply concerns me. If it passes, it could threaten not only my livelihood, but the livelihoods of many others in our industry. Starting over at this stage in my life, with so many others likely seeking the same limited number of jobs, would be incredibly difficult. The uncertainty is frightening.
As a local born and raised on the island, I understand and support the need for more affordable housing. But I question whether this is the right path. Areas like Wailea are not realistic locations for working-class families to live. The cost of housing there is simply out of reach for most locals.
Eliminating transient vacation rentals will also have a major impact on our economy. These accommodations allow a wider range of visitors to experience our island—people who may not be able to afford traditional hotels. They contribute to our local businesses, restaurants, and shops, supporting countless jobs and families along the way.
I respectfully urge you to reconsider the direction of this bill. The unintended consequences could hurt Maui far more than help.
Mahalo for your time and consideration,
My wife and I love Maui and have been visiting for 40 years. We always had a dream of owning a condo on the island and that dream finally came true in 2017. We never intended to purchase it specifically to use as a STR but it was already being managed as one and we kept it in the rental pool. It rents a handful of times per year and doesn't come close to covering all the costs but it doesn't hurt either. We spend about 3 months a year total in Maui. Unfortunately, we are now considered "greedy off-islanders". We have no intention of selling our condo or converting to a long-term rental regardless of the outcome of this proposal. If it passes, our condo, rather than having occasional visitors in our absence who patronize the local restaurants, activities, etc., will sit vacant until we return and the myriad of local businesses connected to the STR industry will suffer. By the way, those people are all full-time residents on Maui. Why do you want to hurt one group of people to try to please another? Rather than dated one- bedroom condos with no storage or parking and sky-high HOA fees, Maui needs to fast-track the building of more suitable affordable housing that caters to full-time families. Please use common sense.
Something that I didn't hear being brought up. Maui Sands property is on leased land with 13 years left on the lease. That means for a property like mine in the complex the HOA fees are $1700/mo and the Lease fee is $1500/mo before any mortgage, insurance, utilities. In addition no lending institutions will do a mortgage loan on leased land with less than 20 years left on the lease. In essence it costs 43k/yr without the property taxes. This complex offers 1 parking stall per unit, no spa, no concierge. It was built in 1965 and was originally zoned a Contel. A condo/hotel, then changed to apt. With this in mind, this property would not be affordable for most unless STR is available.
Thank you for listening to my suggestion for Lahaina STR's. There are a lot of people on both sides with valid concerns, keep the local Hawaiian on their island and keeping tourism to help the county survive. One suggestion is to come to the table with compromise. Why wouldn't you take Lahaina Lower Honopiilani road and go down the middle of the road and what is one the beach side you keep as "resorts" like Hale Mahina Beach Resort and make all of those unit STR's. On the other side you make it all LTR's as they are not on the beach water side and imho do not qualify as a "resort". Could work for all STR's on the beach side. Just a suggestion and compromise is all.
Our family is amongst the thousands of other residents who will be unfairly and negatively affected if Bill 9 is passed. We believe this bill, to phase out legal Short Term Vacation rentals, will create many more problems than it will solve.
Solving Maui's years-long housing shortage is important, but it should not involve taking away the legal rights of homeowners in our community. There will be costly legal setbacks and it will significantly disrupt the livelihoods of most homeowners in Maui, due to the likelihood of declining property values of all homes.
Not passing this bill does not equate to "doing nothing". Not passing Bill 9 helps Maui avoid an unnecessary economic nosedive and will avoid the unwelcome negative effects that will harm the lives of thousands of families.
One sensible approach would be to better utilize the multimillions of property tax dollars, collected from homeowners of Short Term Rentals, to help fund the planning and building of viable, affordable homes.
Respectfully,
Diane Michaelis
Maalaea
Additional Cost estimate: Two billion one hundred million dollars ($2,100,000,000).
The Hawaii Constitution, Article I, Section 20 guarantees that private property shall not be taken or damaged for public use without just compensation. This is known as the Eminent Domain Clause. The government has the power of eminent domain, meaning it can take private property for public use even if the owner doesn't want to sell. However, this power is limited by the Fifth Amendment to the U.S. Constitution (which is applicable to the states through the Fourteenth Amendment).
Similar rights are embedded in the and the Hawaii Constitution, Article I, Section 20.
The Takings Clause of the Fifth Amendment to the United States Constitution states, "...nor shall private property be taken for public use, without just compensation".
Regulatory Takings: Even if the government doesn't physically seize property, a change in regulation, such as rezoning, can be considered a "taking" if it severely restricts the owner's ability to use their property.
Hawaii's Self-Executing Takings Clause: The Hawaii State Constitution's Takings Clause is "self-executing," meaning it automatically provides a remedy (compensation) when property is taken or damaged.
Tangent: The Maui County budget for fiscal year 2026 is $1.56 billion.
Assuming Bill 9 passes, and assuming it survives legal challenges, the County of Maui will be on the hook to compensate the owners of 7000 properties for the taking of a vested property right under the US and Hawaii State Constitutions.
Nothing is more vested than a statutorily codified property right.
The Minatoya list was codified. The history of the Minatoya list can be found in Bill 9. Quoting from Bill 9, Section One: "In 2014, Ordinance 4167 codified Ordinance 1797's exceptions and allowed structures built or approved before April 20, 1989, to have Transient Vacation Rentals in the Apartment Districts. Subsection 19.12.020(G), Maui County Code, was later modified several times to add criteria to qualify for the
exceptions."
Assume that the average loss in value of short term vacation rental re-zoning is $300,000.00 to each property. Assume that this taking applies to 7000 properties. That taking will cost the County not just economic impact to its tourist industry, but for the taking of property rights to 7000 property owners pursuant to the US and Hawaii Constitutions.
$300,000.00 multiplied by 7000 totals two billion one hundred million dollars ($2,100,000,000).
It's not worth it.
I am the Trustee of a Trust from my late wife’s estate which has owned a one bedroom condo unit in the Palms at Wailea for more than 20 years. Although we were not residents of Maui, my and I family use the unit for at several months every year and expect to continue to do so. During the times when we are not using the premises for ourselves, we rented it as a lawful vacation rental to offset some of the cost of ownership.
I am aware of the proposal to prevent short term rentals on a number of previously lawful units in an effort to address an obvious housing shortage on Maui. I appreciate the goals of the program to increase available housing, and I am certainly am aware of the politics of the situation. And, although there may be some units that could be converted into long term rentals, for a number of reasons units like mine are not among them. Even if were otherwise feasible, since my family and I use the unit for extended periods of time, it would not add to Maui’s housing stock, even if there is a ban on short term rentals.
From some of the Mayor's public comments on the short-term rental ban proposal, I am not naive and do not expect my thoughts to change many minds on this issue. Yet I remain hopeful that you will consider the undeniable facts presented and realize the many problems that this proposal will create, the probability that it will not withstand judicial scrutiny, and the interim chaos, budgetary and adverse economic consequences that will result.
I know that you have been inundated with “facts” and opinions about the economic impact to the County of a ban on short term rentals, not only on the direct budget loss of GET and real property tax revenue, as well as the indirect, but very real impact on tourism and tourism related dollars and employment. Though one may disagree with the magnitude of the economic consequences of a short term rental ban, that outcome is certainly very real at some level. The full impact of this proposal will not occur for months or years, by which time it will be too late to fix it. At the same time, whether or not one believes that a ban on short term rentals will lead to more housing for full time Maui residents, it is necessary to recognize that the one size fits all ban just doesn’t fit many circumstances, and will not necessarily lead to much “affordable” housing.
There are indisputable facts applicable to my premises and many others similar to it, which make it impossible to convert them to an affordable long term rental. For example, my unit is one bedroom, with one bed and one assigned parking space. The HOA prevents pets and smoking, and the fire code prohibits outdoor grills. More significantly, the monthly HOA expenses for the unit are approximately $1,500, and real property taxes are another $1,500 per month. Insurance and utilities are more than $500 per month, and a mortgage is more than $2,100 per month. Thus, without even including ongoing maintenance, such as plumbers and necessary repairs and replacements, the monthly expense alone to operate the apartment exceeds $5,600 per month. Thus merely to break even, rent for my one bedroom unit would have to be significantly more than $6,000, an amount that virtually no one in need of "affordable" housing could afford to pay for a one bedroom unit that was never designed or intended for long term rental.
Even if someone could afford a long term rental of my premises, I would be deprived of the use of the unit, which is the sole reason for owning it in the first place. Leaving it unoccupied when I am not on Island will not add to Maui’s usable housing stock, but the County would be deprived of significant GET revenue. Even if I were to sell it, the HOA fee would not go down, and even if the real estate tax decreased some, it would still be unaffordable as a long term rental. Maui’s tax revenue (entirely aside from the GET tax loss) would go down as well–in addition to throwing hundreds, if not thousands of people out of work.
Again, I understand the short term political appeal to some of the proposed ban. However, I am an attorney, and as I’m sure you have been advised, the proposed short term rental ban of properties that have been lawfully permitted for decades, will certainly be challenged in Court, and is unlikely to withstand constitutional scrutiny since it is a “taking” under the Fifth and Fourteenth Amendments to the U.S. Constitution, and likely under Hawaii law as well. I’ve heard the Mayor quoted as saying something along the lines that “all real estate investment involves speculation.” While that statement is true in the abstract, it is not true where the government changes the rules after the fact. That’s not “speculation,” but rather a prohibited taking which requires just compensation. Accordingly, the prohibition on previously legal short term rentals will undoubtedly lead to expensive litigation which, as an attorney, I am confident that the County will lose. But even if they won, they could be forced to pay tens of millions of dollars in compensation to those whose properties was "taken," by the ban.
So the bottom line of the proposed short term rental ban is this: (1) With respect to my unit, and many others like it, it will not lead to more housing, and certainly not affordable housing; (2) It will cause a significant loss in tax revenue to the County; (3) There will be indirect adverse economic loss to the county and loss of employment to the very people who need the help of affordable housing; and (4) The ban will not withstand a Constitutional challenge.
Though well intentioned, the proposal to ban short term rentals will not help the situation–but rather make it worse. I respectfully urge you to reconsider it, or at least tailor it to address units that could in fact increase affordable housing.
Respectfully,
Michael W. Kessler
Aloha HLU Committee,
The presentation from the Mayors team show that of the 7000 units, Maui residents own 352. Seeing all the off-islands investments convert to long term rentals or possibly turn over to Maui residents would be the best outcome. While we cannot be assured this will happen, if we pass Bill 9 there will be a chance of improvement. If we fail, to pass bill 9 we are assured zero change. We can deal with the court challenges. The Mayor addressed the financial impact. As a community, we can overcome anything if we work together.
We have too many residents struggling for housing. We have too many disruptions in our neighborhoods. We can do this.
Aloha HSLU committee member,
Thank you for continuing to hear testimony. I want to clarify that I support the Mayor's proposed CD1 of Bill 9 as it adds clarity and legality to the proposed bill given current circumstances.
I support a full phase out of ALL short term rentals in apartment zoning as this is the most legally defensible way to achieve the intended goal and there is already a process (Change in Zoning & Change in Community Plan Designation) to allow community input on individual properties that may wish to continue.
Please support the Mayor's CD1 of Bill 9.
Mahalo for you dedication in serving our community,
Karen Comcowich
Lahaina, HI