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Maui Real Estate Owners Face Potential for Increased Property Development Options with Proposed ADU Rule Change

·5 min read·⚡ Act Now·In-Depth Analysis

Executive Summary

Maui County is considering expanding the allowance for Accessory Dwelling Units (ADUs) to two per residential lot, a move that could significantly alter development strategies and housing supply dynamics. Real estate owners should anticipate potential shifts in property value and development feasibility. This proposal requires immediate attention from property owners and developers planning future projects on Maui.

Action Required

Medium PriorityBefore Maui County Council decision on Bill 78, CD1 (2026)

The Maui County Council is reviewing Bill 78, CD1 (2026), and a decision could be made soon, impacting property development planning and investment opportunities.

Real estate owners and developers on Maui should assess property suitability for dual ADUs, consult professionals, and engage with county planners before the Maui County Council votes on Bill 78, CD1 (2026) to prepare for potential development opportunities or to influence policy.

Who's Affected
Real Estate Owners
Ripple Effects
  • →Increased ADU supply → potential downward pressure on rental rates for smaller units → marginal housing affordability improvement for some residents → easing of labor attraction challenges for businesses.
Aerial shot of beachfront houses surrounded by lush greenery in Kihei, Hawaii.
Photo by Griffin Wooldridge

Maui County Proposal Could Unlock Dual ADU Development on All Residential Lots

Maui County is proactively examining Bill 78, CD1 (2026), a legislative proposal that, if passed, would permit property owners to construct up to two Accessory Dwelling Units (ADUs) on any single-family residential lot. Currently, most residential zones in Maui County restrict property owners to one ADU. This proposed change aims to address the ongoing housing shortage by leveraging existing residential land more effectively. The Maui County Council is scheduled to review this bill, with a decision anticipated in the near future.

Who's Affected

This proposed legislation directly impacts Real Estate Owners and Developers on Maui, presenting both opportunities and challenges:

  • Property Owners (Residential): Those with single-family homes may have the option to develop a second income-generating unit on their property, increasing rental income potential and property value. This could also provide multi-generational housing solutions.
  • Developers: The bill could expand the development pipeline by allowing for greater density on existing single-family lots. This may incentivize smaller-scale infill development and the creation of more affordable housing options.
  • Landlords & Property Managers: Owners of rental properties could see increased inventory, potentially stabilizing or even slightly reducing rental rates for ADU-sized units due to increased supply. However, managing two ADUs on a single lot might also increase management complexity and costs.
  • Community Planning: The increased density could strain existing infrastructure, including water, sewer, and parking, though proponents argue it's a more efficient use of land than traditional single-family sprawl.

Second-Order Effects

Allowing two ADUs per lot on Maui could initiate a ripple effect across the island's economy. An increased supply of housing units, even supplemental ones, may exert downward pressure on rental rates for smaller units over time. This relief could marginally improve affordability for some residents, potentially easing some labor market pressures for businesses struggling to attract workers due to high housing costs. If successful, this model could also serve as a precedent for other Hawaiian islands facing similar housing crunches.

What to Do

For Real Estate Owners and Developers on Maui:

Act Now. The Maui County Council is actively considering Bill 78, CD1 (2026). This presents a critical window to influence the final decision or to prepare for the changes if the bill passes.

  1. Review Property Suitability: Assess your residential properties to determine the feasibility of adding a second ADU. Consider lot size, setbacks, existing structures, and potential for separate utilities or access points. Understand that local building codes and zoning ordinances will still apply to each ADU.
  2. Consult with Professionals: Engage with architects, contractors, and expediters familiar with ADU construction and Maui County's permitting process. Understanding the costs, timelines, and specific requirements for building two ADUs on a single lot is crucial.
  3. Engage with County Planners: If you have specific concerns or suggestions regarding the bill's implementation, reach out to the Maui County Department of Planning and the Maui County Council members. Public testimony periods or direct communication can influence policy details.
  4. Financial Modeling: Update your financial models for relevant properties to reflect the potential for increased revenue from a second ADU, as well as the costs associated with design, permitting, construction, and ongoing maintenance.

For Investors:

Watch. Monitor the outcome of Bill 78, CD1 (2026). If passed, it could signify a more favorable regulatory environment for housing development, potentially impacting real estate investment strategies on Maui. Keep an eye on property values and development trends in areas where ADU development is likely to increase.

The window to engage with the council or to adjust development plans based on this potential change is now, before a final decision is made.

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