Maui to phase out vacation rentals amid housing crisis

Maui County's proposal to eliminate transient vacation rentals in apartment-zoned districts aims to increase long-term housing availability but raises concerns about economic repercussions.

A University of Hawaiʻi report highlights that while phasing out short-term vacation rentals in Maui could add over 6,000 units to the long-term housing market, it may also lead to significant economic challenges, including a potential $900 million annual decline in visitor spending and the loss of approximately 1,900 jobs. ​ Photo by Luke Scarpino on Unsplash

In response to a deepening housing crisis, exacerbated by the devastating 2023 wildfires that destroyed over 3,000 homes, Maui County is considering a significant policy shift: phasing out transient vacation rentals (TVRs) in apartment-zoned districts. This initiative seeks to convert short-term rental units into long-term housing to address the island's acute shortage. This is according to a report from Univeristy of Hawaii.

Maui's visitor arrivals have fluctuated over recent years, with 2.92 million visitors in 2022, decreasing to 2.5 million in 2023, reflecting a 14.4% decline. Statewide, Hawaiʻi welcomed approximately 9.6 million visitors in 2023, marking a continued recovery toward pre-pandemic levels. ​ Photo: Alan Light, Flickr CC BY 2.0

Economic implications

A recent analysis by the University of Hawaiʻi Economic Research Organization (UHERO) sheds light on the potential impacts of this proposal:

• Housing stock increase: The policy could add up to 6,127 units to Maui's long-term housing inventory, representing a 13% boost—equivalent to a decade's worth of new construction at the current pace.

• Tourism and employment: Eliminating TVRs may lead to a 25% reduction in visitor accommodations and a 15% drop in total visitor spending, approximately $900 million annually. This downturn could result in the loss of about 1,900 jobs, accounting for 3% of the total payroll positions on the island.
  

Property values and tax revenues: Condominium prices are projected to decline by 20–40%, enhancing affordability but potentially decreasing household wealth. Additionally, property tax revenues might fall by up to $60 million annually by 2029, with further reductions anticipated in General Excise and Transient Accommodations Taxes. In 2024, Maui welcomed approximately 2.3 million visitors.  While specific data on the exact number of visitors who stayed in short-term rentals is not readily available, it's noteworthy that Maui County had about 13,000 transient vacation rentals (TVRs) during that period.  These units represented a significant portion of the island's accommodation options, suggesting that a substantial number of visitors likely utilized short-term rentals during their stay.​

Mayor Richard Bissen, a former judge and Maui native, took office in 2023 and has made housing his top priority, especially after the 2023 wildfires. His push to phase out vacation rentals aims to free up thousands of units for residents, reflecting his commitment to put local families before tourism profits Photo: Staff Sgt. Matthew A. Foster, US National Guard, Wikipedia, Public domain

Community and policy responses

The proposal has garnered mixed reactions. Advocates argue that prioritizing housing for residents over tourists aligns with community needs, especially in the aftermath of the wildfires. Mayor Richard Bissen emphasized:

«This phase-out is not anti-tourism—it is pro-resident. It aligns with our community plans, our zoning laws, and the clear, consistent message we've heard from the people of Maui: our residents must come first.»

Bissen's primary focus has been on addressing Maui's housing crisis, particularly following the devastating 2023 wildfires. His proposal to phase out transient vacation rentals (TVRs) in apartment-zoned districts aims to convert these units into long-term housing for residents.

In his 2025 State of the County Address, Mayor Bissen outlined priorities centered on housing initiatives, recovery efforts, and the protection of cultural and natural resources. Specific plans to enhance the tourism sector or strategies to increase visitor numbers were not detailed in this address.

While the mayor's current initiatives focus on resident well-being and housing, any future plans to bolster tourism have not been explicitly articulated in the available information.

Conversely, stakeholders in the tourism sector express concerns about the economic ramifications, including potential job losses and decreased visitor spending.

Considerations and alternatives

To mitigate adverse effects, UHERO suggests several alternatives:

• Increased taxation on TVRs: Raising property tax rates for TVRs could incentivize owners to convert properties to long-term rentals while generating additional revenue.

• Permit auctions: Auctioning a limited number of TVR permits could allow the most profitable units to continue operations, capturing economic value for public use.

• Gradual implementation: A phased approach may reduce market shocks, allowing time for adaptation among property owners and the community.

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  As of April 2025, Maui continues its recovery from the devastating August 2023 wildfires, with significant progress in debris removal and infrastructure restoration. Efforts are ongoing to rebuild homes and support displaced residents, while initiatives aim to preserve cultural landmarks like Lahaina's historic banyan tree, symbolizing the island's resilience. The community remains committed to revitalizing the local economy and ensuring long-term sustainability. Photo: US National Guard, Master Sgt. Andrew Jackson, Flickr CC BY 2.0

Facts about the wildfire in 2023

​In August 2023, Maui experienced devastating wildfires, primarily affecting the historic town of Lahaina. Here are key facts and impacts of the disaster:​

Casualties and damage

• Fatalities: The wildfires resulted in at least 102 confirmed deaths, making it the deadliest U.S. wildfire in over a century.

• Structural Damage: Over 2,200 structures were destroyed, with approximately 96% being residential properties.

• Financial Impact: The damage was estimated at $5.5 billion
  

Housing Crisis

• Displacement: The destruction of homes exacerbated Maui's housing shortage, displacing thousands of residents. ​

• Increased Housing Costs: Post-fire, affected households faced rent increases of 50–60%, with larger units experiencing nearly double pre-fire levels.
  

Economic Impact

• Tourism Decline: Visitor arrivals dropped significantly, leading to an estimated loss of $11 million per day in visitor spending. ​

• Employment Losses: The tourism downturn and business closures resulted in substantial job losses across the island. ​
  

Migration Effects

• Population Decline: At least 430–510 residents moved out of state due to the wildfires, contributing to a total population decrease of around 1,000 individuals. This out-migration is projected to cost the state's economy at least $50 million in annual income. 
  

Environmental Conditions

• Fire Propagation Factors: The wildfires were fueled by dry conditions and strong winds, with gusts up to 80 mph, which rapidly spread the flames.

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The 2023 Maui wildfires had profound and multifaceted impacts on the island's community, economy, and environment, highlighting the challenges of disaster preparedness and recovery in vulnerable regions.