A contentious debate is unfolding on Maui, with significant implications for the island's housing market and tourism industry. The proposal to phase out transient vacation rentals (TVRs) in Maui County's apartment districts has ignited a conflict between property owners and local authorities, particularly concerning the affordability of converted units for residents. While property owners and managers express concerns about residents' ability to afford long-term rentals, a recent study conducted by the University of Hawaiʻi Economic Research Organization (UHERO) suggests otherwise.
The core of the disagreement lies in the potential conversion of approximately 6,100 vacation rental units into long-term housing, a key component of Maui Mayor Richard Bissen's plan to address the housing crisis. During the two-day public hearings, owners and managers of short-term rentals voiced concerns that the resulting rents would be beyond the reach of many local families. However, the UHERO analysis suggests that the increased housing stock generated by the conversion of TVRs could make homes more affordable, counteracting the owners' apprehensions.
The UHERO report, commissioned by the Hawaiʻi Community Foundation, provides a comprehensive economic analysis of the proposed phase-out. The study acknowledges that while the policy aims to increase long-term housing and potentially lower prices, the shift could also reduce visitor spending by nearly $900 million annually. Maui Now's report highlights the mixed outcomes, including potential job and income losses. The study further anticipates a decline in property values and an estimated $60 million drop in county property tax revenues by 2029.
The implications of the TVR phase-out extend beyond housing affordability. A Civil Beat study indicates that the reduced value of homes could improve affordability and reduce household wealth. The conversion of TVRs would also constitute a 25% reduction in visitor accommodations, potentially impacting local jobs and income. The Maui County Council is expected to consider the proposal after reviewing the annual County budget, with a deadline of June 18 to take action, which will determine the future trajectory of Maui's housing and tourism sectors.
