Maui Mayor Richard Bissen proposed phasing out vacation rentals to address a housing shortage following wildfires in 2023. A report by University of Hawaii economists stated that while this could increase housing affordability, it would also lead to job losses, decreased incomes, and lower tax revenues. The policy would impact visitor spending, shrinking the economy. The Maui County Council is considering the proposal, with concerns regarding legal implications and costs.
Vacation rentals account for 21% of Maui County’s housing supply, and the policy could add over 6,000 units to long-term housing. Prices would decrease, benefiting residents, but could lead to job cuts and reduced economic activity. Most affected rental owners are out-of-state, and the policy could help avoid the need for additional water sources.
Alternative approaches suggested in the report include increasing taxes on vacation rentals, taxing empty homes, and reforming zoning and permitting. Auctioning vacation rental licenses could also be considered to manage the market more effectively. While this approach is not common for vacation rentals, it has been used in other industries like taxis and fisheries.
The study was conducted at the request of the Hawaii Community Foundation and highlights the complex trade-offs involved in addressing Maui’s housing crisis. The mayor and council are considering different strategies to balance the housing needs of residents with economic considerations and potential impacts on visitors and property owners.
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