Maui's business landscape faces a period of uncertainty as Bill 9, which seeks to regulate short-term rentals, is now law. Critics, including the Grassroot Institute of Hawaii, have expressed serious concerns over the bill's potential negative impacts on the local economy and its legal standing, creating a tense environment for entrepreneurs, investors, and professionals across the island.
One of the primary concerns revolves around job security. The Grassroot Institute of Hawaii notes that phasing out short-term rentals could lead to significant job losses in the cleaning, maintenance, and hospitality sectors. The loss of approximately 25% of Maui’s accommodations could severely affect thousands of residents. A 2025 study from the Economic Research Organization at the University of Hawaii estimated that a complete phaseout could reduce visitor arrivals by 32%, potentially resulting in 1,900 job losses, which equals 3% of Maui’s total employment. A 2024 study by Kloninger & Sims Consulting LLC, found that a phaseout could result in 7,800 lost jobs and $1.3 billion in lost economic output.
Beyond job losses, Bill 9 is criticized for its potential to hinder entrepreneurship and small business growth. Short-term rentals spread visitor traffic across the island, benefiting small cleaning businesses, handymen, tradespeople, and independent property managers. By removing a substantial number of these units, the bill could curb the ability of small Maui businesses to benefit from the tourism sector.
The reduction in county tax revenues presents another major challenge. The University of Hawaii Economic Research Organization’s study showed the county could lose up to $60 million annually by 2029 due to reduced property values and lower tax rates on converted properties. Replacing this lost revenue could necessitate tax increases for businesses, farms, and homeowners, adding further strain on the local economy. Furthermore, general excise and transient accommodation tax collections are expected to shrink, resulting in $15 million less in county revenues.
Legal challenges also loom large for Bill 9, as highlighted by Maui Now. Preexisting uses are often protected by the Hawaii and U.S. constitutions. Any legal battle, if it occurs, is projected to be costly and extend over a long period. Given these considerable risks, those who are involved in Maui's business sector should be preparing for potential disruptions and changes.
