NEWS FLASH July 25, 2025 On Thursday (July 24) the Maui County Council gave first approval to an ordinance that would ban 7,000 short term vacation rentals by 2030. The ostensible purpose is to provide housing for permanent island residents who are priced out of the rental market. The vote, taken after nearly a year of debate and several heated hearings with testimony from various interests, came about two weeks shy of the second anniversary of the Aug. 8 Lahaina fire that killed 102 people and destroyed more than 2,000 housing units. The council recommended passage of “Bill 9” on first reading, capping a review process that saw more than 300 people testify for and against it over the course of five days this summer. The council will reconvene relatively soon to hear any final arguments, but, since members already voted 6-3 for the measure, the result seems preordained. The measure specifically targets more than 7,000 units currently operating as legal TVRs under the “Minatoya list,” properties in apartment-zoned districts built before 1989 that were previously allowed to operate as short-term rentals and have been grandfathered to continue operations ever since. The measure would phase out these rentals over three to five years – first in 2028 for West Maui, which lost thousands of homes in the August 2023 wildfires; then, in 2030, in South Maui (Kihei and Wailea). Tax revenue losses, should the measure hold up in court, are estimated by tourism-reliant Maui County at $40 million to $75 million annually, though outside financial analysts say the losses will be far higher (which might mean taxes would have to be jacked up again for visitors who are already paying nearly 18 percent in fees and levies to the county and state). Fueled by Maui’s ongoing housing crisis, the bill was introduced by Mayor Richard Bissen in May 2024 and has been backed by the highly vocal and politically influential Lahaina Strong movement – and by hotels, which, if vacation rentals disappear will see higher occupancies and presumably higher room rates (which are already in the stratosphere) as Airbnb and VRBO units are no longer available. Bissen released this statement after the vote: “Bill 9 is a critical first step in restoring our commitment to prioritize housing for local residents — and securing a future where our keiki can live, grow, and thrive in the place they call home.” The bill has been highly divisive in Maui, with owners of properties, real estate interests and hundreds people who work in jobs related to vacation rentals not only testifying about the implications of the measure, but also threatening legal action against the county. Many noted that with already high taxes and Homeowners’ Association dues, these units, many of which are studio or one bedroom, will be unaffordable as long-term rentals to most Maui residents. Lawyers were ready for the vote. The bill, they say, violates the “Takings” law from the Fifth Amendment to the U.S. Constitution, which states: “... nor shall private property be taken for public use, without just compensation.” This is known as the Takings Clause and it protects property owners from the government unlawfully seizing their property and states that governments must provide notice, follow due process, and pay just compensation if they seize property. Bill 9 specifically targets more than 7,000 units currently operating as legal vacation rentals under the “Minatoya list,” properties built before 1989 that were previously allowed to operate as short-term rentals and have been grandfathered to continue operations ever since. Under this county-created list, apartment owners were granted the right to use their properties for vacation rentals. Thousands of owners, many from outside Hawaii, purchased, renovated, and operated businesses based on county assurances. These owners now can and will argue the 3- or 5-year phase-out substantially reduces the value of their property. If the court agrees, the county could be forced to pay just compensation. Maui’s progressive council also is considering an “empty homes tax” on properties vacant more than six months. The idea is to discourage speculative ownership and idle properties amid a severe housing shortage — Maui reportedly has around 15,000 vacant units, roughly one in every five homes. Meanwhile, post-Lahaina Fire, rebuilding homes is finally underway. Over 600 fire‑destroyed properties — including more than 500 homes and 100 commercial buildings — have been deemed eligible for streamlined rebuilding and permit requirements, reducing permitting time by around a year. As of July 22, Maui County has issued 443 Lahaina building permits. So far, only 38 permits have reached completion (final inspection) and are ready for occupancy, though many more are under construction. No non‑residential structures (businesses lost in the fire, including those on Lahaina’s treasured and historic Front Street) have been completed yet. The Lahaina harbor remains off limits. Previous news flashes: This is an update to our June News Flash, with a bit more information on the issues the Board of Directors has been encountering. On our site, if you are a member, you'll find the most recent minutes from our directors meeting (Aug. 9, 2024) along with a detailed analysis of the vacation rental ordinance the county is considering You'll also find, in our Documents section, the 2024 budget that reflect the 100 percent hike in insurance Kahana Reef was hit with earlier this summer. A couple of other notes on the STR (short-term rental) proposal: the Maui County Planning Commission in July recommended to the Maui Council the proposal be adopted, but the council won't be considering it until an economic study is completed some toward year's end. That study should, should, show the disastrous impacts should this policy be adopted. And on another note, KR seems to have gone through the torrid tropical storm Hone this month with no issues. E hana kākou (From June 2024:) If you're wondering what's going on with the (Maui) mayor's proposal to eliminate many short-term vacation rentals (STVRs) on the island, here is the letter sent out to owners earlier this month. Also, read the meeting minutes from the KR BOD last month where this topic is discussed extensively along with the recent insurance rate hikes. The minutes can be found in the Member's Area: Documents, along with the new KR Reserve Study, recent financial reports and updated insurance information, Aloha Kahana Reef Owners, As part of our update process regarding the Maui short term rental ban, the Board wanted to provide some resources and a few suggested talking points for you to help you engage with the Maui County Council regarding the Short-Term Rental discussions. We are continually seeing emotional reactions from the public and the council. It would behoove us to do our best to transition from an emotional plan to a rational plan of action. Continuing to spread information and taking action will be the key to retaining our property rights. The hearing is less than a month away. Our strength will likely come in numbers. Please tell all your family and friends that are supported by STR’s to get involved. There are over 7,000 units at risk of losing their right to be short-term rentals. Many jobs are at risk as well. These include but are not limited to cleaners, maintenance providers, property managers, plumbers, electricians, wedding planners, excursion companies, etc. On June 25th the Maui Planning Commission meetings begin. You can follow progress on the Maui Vacation Rental Association website (linked below). However, the best and most important thing you can do is call in and testify and encourage the job providers above to contribute to the discussion as well. Please spread the word and help get this crippling bill killed. Some of these alliances will also be filing legal action but that isn’t the best way to fight this. Airbnb and VRBO are engaged as well. Proactive testimony on the front end is better, cheaper and faster. Legal action could last for years. Below are a few resources and facts for you. Paul Brewbakers fiscal impact is worth mentioning in this email (the full text is linked in the dropbox below). Brewbaker’s white paper, which was revised in November 2022, he concluded that the “hypothetical economic impacts” to Maui County would be the loss of 14,126 jobs, and annual reductions of $1.67 billion in tourism money, $747.7 million in employee earnings and $137.6 million in tax revenue. Short-term rentals contribute by far the largest chunk of the county’s property tax revenue at 42%, which is estimated to be $246.3 million for fiscal year 2025, which begins July 1. We encourage you to get involved and join in support of these organizations. Mid-Term and Short-Term Rental Alliance Maui Vacation Rental Association Facebook Group: STR’s Aren’t the Problem Below is a link to a Dropbox with two papers. First is Paul Brewbaker’s,(mentioned above) He is a noted economist in Hawaii for many years. The second is a paper from Maui Vacation Rental Association and their discussion with the mayor. Dropbox Link to Resources The board is committed to keeping you informed as this process evolves. Sincerely, Board of Directors NEWS FLASH March 15, 2024 Our new Resident Manager, Danny Maxwell, started Jan. 1, 2024. Danny has been managing other properties in West Maui for the past decade or so and has extensive experience in areas such as construction and landscaping that quickly have been put to use at KR! More from Danny (his complete report on what he's accomplished in his first few months) can be found in the "Documents" Members' Only section on this site. Our property manager, Krista Barresi of JS Property Management, has been keeping us abreast of legislative proposals regarding vacation rentals, including SB SB 2919 which would put a cap or hase out rentals. A great site for news about legislative proposals and housing issues is Grassroot Institute of Hawaii. To get on their mailing list contact them at Grassroot Institute of Hawaii