Maui’s $300K Vacation Rental Study Falls Apart – What Happens Next?

It’s time again to update the status of Maui Mayor Richard Bissen’s proposal to phase out short-term rentals (STRs) in A1/A2-zoned areas, as the independent economic study the City Council was relying on has fallen through. The Council’s plan to commission the study was abandoned due to a lack of willing bidders, leaving officials to make a critical decision without it. Instead, legislative analysts will conduct in-house research while awaiting a separate study from the University of Hawaiʻi Economic Research Organization (UHERO). A prior study by Kloninger & Sims estimated that prohibiting vacation rentals could result in significant tax revenue losses, though Bissen disputed its assumptions. The Council faces a June 18 deadline to act on the bill, which could eliminate 7,000 short-term rentals in apartment-zoned areas, reducing visitor accommodations but increasing long-term housing options for residents. The Housing and Land Use Committee, led by Council Member Tasha Kama, will hold hearings once sufficient information is available, although no date has been set as I write this article. Some council members expressed frustration that the study was not conducted before proposing the phase-out, while others emphasized the urgency of addressing the island’s housing crisis. With no independent study forthcoming, the Council must rely on internal research and UHERO’s findings to make a decision before the deadline.

Maui’s A1/A2 short-term rental (STR) market is in a state of uncertainty, creating a buyer’s market for those willing to take a calculated risk. Many STR owners are selling at reduced prices due to fear of potential restrictions. This presents an opportunity for buyers who believe the proposal may not pass—if it fails, these under-market purchases could yield strong returns. However, due diligence is crucial; buyers should research zoning laws, potential legal challenges, and market conditions before making a move. While the risk exists, those who bet wisely could secure prime Maui properties at a discount.

Navigating Maui’s shifting short-term rental (STR) market can be challenging, but you don’t have to do it alone. Whether you’re a buyer looking to capitalize on lower prices or a seller trying to make the right move in uncertain times, I’m here to help. I keep my clients informed with the latest updates, market trends, and legal developments, offering timely insights that align with your real estate goals. With this ever-changing proposal, having the right information is key to making smart decisions. Feel free to contact me today to discuss your strategy and stay ahead of the curve in Maui’s evolving real estate landscape!

The information provided in this blog is for general informational purposes only and is not intended as legal, financial, or real estate advice. While I strive to provide accurate and up-to-date information, market conditions and legal regulations may change, and I recommend consulting with a qualified professional for advice specific to your situation. All opinions expressed are my own and do not represent the views of any organization or entity. Information included in this blog was collected from a Maui Now article found online: Maui Now.