Maui looks to phase out short-term vacation rentals
Even before the devastating wildfire last summer, Danielle Crothers and her husband were struggling to find a home — big enough, yet still affordable — on Maui’s west side for their recently blended family.
Then the deadly fire decimated more than 2,000 homes in Lahaina, including the apartment where her new husband, Rigoberto Naranjo, lived with his 15year-old son. She would have taken them in, Crothers said, but she just didn’t have room in her small apartment, where she lives with her 9-year-old daughter.
The newlyweds tried to remain hopeful that a space for their family of four would soon open up, especially given the inf lux of disaster relief and aid organizations for fire survivors. But now, almost nine months later, her husband and stepson are still living in a hotel room and their family remains separated — even as tourists have returned to the island, many staying in short-term rentals in neighborhoods where Crothers would love to live.
The family’s plight, like that of thousands of others in Maui, is one reason Hawaiian counties may soon crack down on services from the likes of Airbnb and VRBO.
“It’s sad because every single fire survivor could be housed if short-term rentals were converted to long-term ... and not even all of them” would need to be converted, Crothers said. “There is enough housing, it’s just they’re not for the residents.
It really enrages me.”
State legislators evidently share that ire, overwhelmingly passing a bill May 1 to give counties the ability to phase out shortterm rentals. Gov. Josh Green signed the bill into law on May 3.
Crothers, who is now five months pregnant, said she’s hopeful the new law will enable families like hers to plan for a future on Maui — and across the Hawaiian Islands, which face a worsening housing crisis: the highest housing costs in the nation and one of the worst rates of homelessness.
“I would just be grateful to be able to live in a home with [Naranjo] and bring the baby into the world in a comfortable [place],” she said.
As of a few weeks ago, about 1,750 people displaced by the fire remain in hotels while awaiting longer-term housing, according to the American Red Cross, despite the premium the Federal Emergency Management Agency has offered short-term rental owners — almost twice the fair-market rate — to lease their units to fire victims.
Across Maui, more than 12,000 housing units legally operate as short-term rentals, and officials estimate an additional 10,000 do so illegally, according to the governor. In Lahaina — where Crothers and her husband would like to stay to eliminate longer commutes for themselves or new schools for their children — one in three homes are used as a vacation rental, according to a 2018 report.
Given the new authority from the state, Maui leaders announced a plan early this month that would phase out permits for about 7,000 of those short-term rentals that were grandfathered in as legal vacation rentals decades ago. Mayor Richard Bissen Jr. would like to see these apartments re-zoned for long-term residential use, potentially beginning next summer.
The proposal still needs to go before Maui’s planning commission and county council, but Bissen said the goal is to “create urgently needed housing for displaced wildfire survivors and increase inventory for local residents countywide.”
“Every day our people are leaving, and this is a consequence we cannot accept as a community,” Bissen said at a news conference May 2.
State Sen. Jarrett Keohokalole, one of the co-authors on the Senate bill, called its passage “a big deal,” necessary for local leaders to regulate the short-term rental industry that has ballooned in recent years.
“It was time for a modernization of the code and it was time for the Legislature to speak on this topic,” said Keohokalole, a Democrat from Oahu. “What is housing and what is commercial tourist activity? The lines have blurred significantly since the 1950s.”
“This bill is an attempt to reset the policy to make it clear that neighborhoods for working people should remain that way and should not be converted into virtual hotel rooms,” he said.
The bill, SB 2919, allows for new regulation of “transient accommodations,” giving counties the authority to change residential zoning — which Maui leaders have jumped on. Although the law will go into effect upon governor’s signature, state officials have said it will probably take years before any phase-out approved by a county would go into effect. Maui leaders would like to see their phase-out of some short-term rentals to begin next summer in West Maui and by 2026 for the rest of the island.
Several legislators said the state bill’s fortunes were boosted by grassroots support, particularly from advocacy group Lahaina Strong, which rallied for months behind the legislation in the wake of the wildfires.
“This isn’t just a win for affordable housing, it’s a victory for the spirit of our community,” Lahaina Strong organizers posted in a video after the bill received enough ‘yes’ votes. “With SB 2919’s passage, we’re not just envisioning a brighter future, we’re taking it back — neighborhood by neighborhood.”
Organizers with Lahaina Strong have spent the last five months camping out one of the island’s most premier beaches, serving as a daily reminder to locals and tourists that the island remains in a housing crisis. Many advocates called in to testify in support of the bill were from the “Fishing for Housing” protest, which organizers said they plan to finally pack up after this legislative win.
Though the effort to change zoning laws gained broad support, it faced fierce opposition from real estate agents, short-term rental owners and Airbnb. Many testified about the revenue local and state governments would lose if such rentals are limited.
A spokesperson for Airbnb declined to comment on the bill’s passage. The company and its lobbyists had previously cited its ongoing work with Hawaiian counties to help limit illegal renting and said that certain changes would probably probably bring legal challenges.
Bissen said on May 2 that his team expects such pushback as they try to implement the new state law. The mayor also acknowledged that changing short-term rentals into long-term residences would move them into a lower property tax bracket, which could reduce county revenue by $30 million if his proposal is implemented as is.
“There are impacts if we do this and there are impacts if we don’t do this,” Bissen said. “Our priority is housing our local residents.”
De Andre Makakoa, an organizer with Lahaina Strong who camped out for months to demonstrate the need for more housing, called the legislative wins early this month just the beginning for his community as it continues to recover from last summer’s wildfire.
“It’s not just our community fighting for this, it’s a huge movement that’s happening,” said Makakoa, 29. “Housing is extremely important for us now, but there’s so much more: infrastructure, water and then everything that has to do with the rebuild.”