Maui County is navigating a complex and contentious path to address its severe housing shortage by phasing out thousands of vacation rentals. The initiative, aimed at converting short-term rentals into long-term housing for residents, has encountered significant legislative gridlock and legal challenges, leaving the future of many properties uncertain.
Key Takeaways
- Maui County passed Bill 9 to phase out approximately 7,000 vacation rentals over five years, aiming to alleviate a critical housing shortage.
- A subsequent effort to exempt around 4,500 of these units by rezoning them for hotel use has stalled in the County Council.
- The first lawsuit has been filed against the county, alleging a "wrongful, oppressive, and unreasonable" taking of property rights.
- The long-term impact hinges on the success of rezoning efforts and the outcome of ongoing legal battles.
The Housing Crisis and Bill 9
Maui County’s housing crisis, exacerbated by the devastating 2023 wildfires, has intensified the urgency to increase housing inventory for residents. Mayor Richard Bissen introduced Bill 9 in May 2024, a measure designed to reclaim apartment-zoned units that have been operating as short-term vacation rentals (TVRs). The law, signed in December 2025, aims to convert these units to long-term rentals by January 1, 2029, in West Maui and January 1, 2031, in the rest of the county.
Mayor Bissen stated that Bill 9 is the "most immediate way to bring thousands of units back online and expand housing inventory." He highlighted that over 90% of affected units are owned by non-residents, suggesting that decisions about Maui’s housing should prioritize local needs over outside profit interests.
Legislative Gridlock and Rezoning Efforts
Following the passage of Bill 9, the Maui County Council attempted to introduce a companion bill to rezone approximately 4,500 of the affected units for hotel use. This move was intended to allow some properties to continue operating as vacation rentals, potentially mitigating economic impacts and heading off lawsuits. However, the council hit gridlock on this rezoning legislation, deferring discussions to January 5. Council Chair Alice Lee acknowledged the impasse, stating, "We’ve hit a wall."
Some council members expressed concerns about forwarding "half-baked ideas" to planning commissions without further public discussion and amendment. This delay has created uncertainty for property owners and complicated the implementation of Bill 9.
Legal Challenges Emerge
The controversy surrounding Bill 9 has already led to legal action. A lawsuit was filed by property owners of the Kāʻanapali Royal condo complex, which is slated for rezoning. The suit claims Bill 9 constitutes a "wrongful, oppressive, and unreasonable" conduct and a regulatory taking of their property rights, arguing it denies them the "viable economic use of their property."
Economic and Community Impacts
While supporters of Bill 9 emphasize prioritizing "people over profits" and restoring communities, opponents warn of significant economic consequences. A University of Hawaiʻi Economic Research Organization study suggested potential annual losses exceeding $60 million in tax revenue, job losses, and reduced visitor spending. Conversely, supporters point to the same study’s findings on improved housing affordability and argue that some economic disruption is necessary.
The debate also highlights divisions within communities, with some residents of affected properties supporting the bill to reclaim their neighborhoods, while others fear the repercussions for property values and the local economy. The long-term success of Bill 9 will depend on navigating these legislative hurdles, addressing legal challenges, and balancing the urgent need for housing with the island’s vital tourism industry.
Sources
- Thousands Of Maui Vacation Rentals In Limbo After Council Hits Gridlock, Honolulu Civil Beat.
- Hawaii governor says he will remove 10,000 vacation rentals from the market, Short Term Rentalz.
- Maui County passes historic law to phase out thousands of vacation rentals, Hawaii Public Radio.
- Maui passes bill to phase out vacation rentals, Courthouse News.
- Mayor Richard Bissen signs historic Bill 9 into law after Maui County Council vote today • Maui County, Maui County.gov.