Andrew lives on the church Maui For more than two decades, while her long-term partner and fiancé, with whom she has a daughter, was born and raised on the island.
After years of working and saving, the church began purchasing properties to serve as rentals in September 2022 and now has four units. His vacation rentals are now the main source of income for his family.
Maui officials have unveiled plans to phase out more than 7,000 short-term rentals in an effort to open up more housing for local residents and lower housing costs — a move Church said would devastate her family.
“My family loses sleep every night over this,” Church told Business Insider. He said if the ban goes into effect, he might not be able to pay his mortgage and would likely have to sell everything and move to Maui, where his fiance’s family has roots going back more than a century.
“By enforcing this ban, they will bankrupt my family,” he said.
Maui has long had housing problems, with some of the most expensive real estate in the US. Hawaii’s median home price is higher than almost every other US state. Maui in particular had a median home price of about $1.1 million in July 2024, compared to a nationwide median home price of $438,706, according to Redfin.
The island’s housing problems were exacerbated by The wildfires that devastated Lahaina In August 2023, it destroyed much of downtown and displaced thousands of residents.
Plans to phase out some short-term rentals came in the wake of the fire, but as a tourist destination with local housing issues, Maui is hardly alone. Barcelona and New York City Among the cities banning or enforcing Airbnb and vacation rentals.
But on an island the size of Maui, where tourism industry Estimated to be directly or indirectly responsible for 70% of every dollar generated, the results can be significant.
Owners say their property values will drop
The ban, which applies to properties on the so-called “Minatoya List,” includes 7,160 units that are mostly concentrated in the tourist areas of South Maui, mainly Kihei and West Maui, mostly Kaanapali.
The properties are technically zoned for residential apartments but, since 2001, have been legally allowed to operate as short-term rentals — and taxed to that effect. The list names the city employee who initially wrote the memo about allowing short-term rentals, which was eventually put into law.
Earlier this year Maui Mayor Richard Bissen announced plans to end those permits. The Maui Planning Commission voted unanimously in favor of it, recommending it be approved by the City Council. If approved, the ban would take effect in 2025 and 2026, depending on the area.
Church said three of his four properties are on the list, but when he bought them in 2022 and 2023, he had no idea the list existed. While researching the properties, he confirmed their tax status as a short-term rental on a county site.
He said the units were marketed and sold as vacation rentals and that no one, real estate agent or government official, referred the listing to him. Church said other owners he knows have said the same and are concerned about the financial implications of the ban. The Maui County Mayor’s Office did not provide comment when contacted by Business Insider.
Jason Gobe, others Short term rental ownertold BI that he researched and talked to real-estate agents and others before buying his one-bedroom condo in Kihei in 2019. He also said he had confirmed the property’s tax status as a short-term rental and had no idea it might be. The problem with that.
Gobe and his wife live in Arizona but spend about four months of the year on Maui. He said he doesn’t make a significant profit on his condo but buying it and renting it out is the only way he can visit Maui as often as he does, during which time he is also spending heavily on the local economy.
“We bought it to use it,” he said. “But we need some revenue from that.”
Both owners said their property values would decrease as a result of the ban. They said many similar units have been listed for sale since the ban was proposed, but no one is buying them. They feel certain that if they eventually sell their properties, it will be at a significant loss.
Although some properties on the Minatoya list are likely to be converted into long-term rentals, the church said it is not financially feasible for it. Due to the high costs associated with maintaining the property, he thinks he will have to charge too much to do long-term rental work.
Gobe said because he and his wife spend a month on Maui every few months, their unit will sit empty when they’re not on the island. Both owners said people who help them maintain the units, such as property managers and cleaners, will lose work as a direct result of the ban.
The ban should help Maui’s housing problem, but the broader effects are unclear
Owners also said they don’t think phasing out their rents will really solve Maui’s housing crisis, saying the properties will still cost more than the average family can afford.
However, Justin Tyndall, associate professor of economics at the University of Hawaii at Manoa, said the policy will change. Significant positive impact on habitat in Maui13% increase in long-term residential housing stock.
“It will just be a huge flood of new units. Some of them will end up for sale, or some of them will be rented out to locals,” he told BI, adding, “It will definitely make housing more affordable.”
Even if many properties will still be unaffordable for low-income residents, an increase in housing supply will put upward pressure on house prices and rents more broadly.
Tyndall said, the Maui housing problem is largely a lack of housing supply resulting in extremely high prices. It is a significant driver of how few new construction projects has been on the island for the past two decades, in part due to government regulations that make obtaining permits difficult and expensive.
He said some of those rules make sense, such as those intended to protect ecologically sensitive areas, while others are misguided, and the government could make changes to encourage developers to build more housing.
But the advantage of adding Minatoya List properties to the housing stock is that they are already built.
He said the property values of those units will almost certainly go down, but that’s not a bad thing for the broader Maui housing problem. He also noted that 85% of the units on the list are owned by people who live out of state, while 92% are owned by people who do not live in Maui.
While he said there is a consensus among experts that the change will benefit Maui housing by increasing supply and reducing costs, he is still looking into what the broader effects could be.
“Maui is very dependent on tourism, removing 7,000 visitor accommodation units will certainly reduce tourism levels,” Tyndall said. “How vague that is.”
He added that most hotels on the island typically operate at 60 to 70% capacity, so some short-term renters will likely end up there, but at this point, that’s still a big unknown.
If the change leads to a significant reduction Tourists visiting MauiThat would mean less tax revenue for the county and job losses for people in the service industry.
As for short-term rental owners, Tyndall said people should know this is a possibility and that many people who work in real estate at least know about the listings.
“Property investing involves risk,” he said.
“There’s no guarantee you can run a vacation rental forever.”
Are you a short-term rental owner on Maui, or have you or your family struggled to find housing on Maui? Want to share your perspective on plans to phase out certain vacation rentals? Contact this reporter at [email protected].
Post Maui may soon ban some Airbnbs. Owners of short-term rentals say it would be financially devastating for them. appeared first Business Insider.