A novel approach to Maui’s severe housing crisis emerged during a third round of emotional public testimony Monday on the hotly debated vacation rental phase-out bill: leveraging short-term rental profits to finance affordable housing for local families.
Jonavan Asato, senior pastor at Grace Bible Church in Kahului, proposed this alternative while testifying on Bill 9 before the Maui County Council’s Housing and Land Use Committee. His plan would use vacation rental income to fund homeownership opportunities for residents, keeping visitor money within the community rather than letting it be siphoned off by out-of-state investors.
Asato envisioned a nonprofit, such as a church or foundation, taking the profits from short-term rentals — “one of the most profitable things in our economy” — and channeling them into a fund for residents. Over 50 years, this could help 1,000 families get into homes, with each family receiving $200,000 or more for a down payment, he said.
The Grace Bible Church aims to demonstrate this concept on 8 acres it owns, planning to build 100 homes. Of these, 70 would be long-term rentals, while 30 would be short-term rentals.
The short-term rental profit would go into the hands of the people renting, Asato explained. Under this model, after a four-year period at the Grace Bible property, renters would rotate out, using their accumulated $200,000 as a down payment for a home elsewhere on Maui, allowing new renters to enter the program.
“I believe God’s given us the 8 acres to be a blessing to our community and to find a long-term solution for the problems that we face,” Asato said. He highlighted the struggles of young people, including his two daughters, who want to return to Maui as teachers after college but cannot afford a median home price of $1.3 million.
“This is not short-term rentals’ fault,” he said, pointing instead to broader inflationary issues. While acknowledging Bill 9’s “really good intentions,” Asato said he believes it “doesn’t address the root problem of why our kids can’t afford things here.” He cited emotional testimony from a resident who spent decades paying rent without building equity, calling it “criminal,” “not right,” and “unjust.”
Housing and Land Use Committee Chair Tasha Kama requested Asato’s proposal in writing. Council Chair Alice Lee said she admired Asato’s concept, but expressed reservations about the transient vacation rental component given the ongoing controversy. Asato, however, stood by his idea, emphasizing the principle of a nonprofit using TVR profitability to benefit the community.
“We’re losing our community,” he said. “Lots of people in our church are leaving because the cost of living is too high. Lots of our young people are not returning because they can’t own their own homes.” Asato said he’s discussed the proposal with the County Department of Planning, noting that while challenging, “they’ve all been in support.”
Tourism versus housing debate continues
Overall, Monday’s in-person and online public testimony shifted more heavily toward those in favor of Bill 9, with more than 2-to-1 calling for passage of the measure for housing opportunities and those opposed having a vested interest in maintaining vacation rentals in apartment-zoned districts. According to an eComment report from the Office of Council Services comments on the bill have been running mostly opposed.
The Council Chambers gallery was sparsely attended, especially in comparison with the overflow crowd on June 9 or the less crowded audience on June 18.
Testimony largely reiterated the ongoing debate: the economic benefits of continuing the status quo for short-term rentals versus the critical need for affordable housing for residents, especially in the wake of the August 2023 wildfire disaster that destroyed thousands of homes in Lahaina.
Vacation rental owners focused on the severe economic consequences of Bill 9, proposed in early May 2024 by Mayor Richard Bissen. The bill would phase out short-term rentals in apartment-zoned districts, impacting an estimated 6,000 units, mostly in South and West Maui. Owners would have a three-year grace period to transition to long-term rentals or apply for hotel zoning, an often lengthy and costly process.
Vacation rental owner Andrew Church said Bill 9 would “essentially wipe out our primary source of income,” potentially making his family homeless. He argued his properties were “legally codified” for short-term rentals and designated for such use by County property tax officials. Church also described the “excruciating, slow process” of obtaining a building permit for an outdoor shower, which led him to buy condos requiring no permits instead.
Local housing not guaranteed
Amy Ramos, who has managed a short-term rental home for 13 years with no neighbor complaints, said she opposes Bill 9, even though the unit she manages is not on the “Minatoya List,” referring to a list of properties grandfathered as legal ongoing vacation rentals in apartment districts.
“There is no guarantee that any of these units will be converted to long-term rentals,” she said, predicting that many owners would leave them unoccupied and choose to use them as second homes instead.
“This bill will benefit the hotel industry unless the condo market’s value drops to under $200,000. I don’t see these becoming affordable housing,” Ramos said.
High costs for aging condominium maintenance
Rick Viebahn, who owns a 500-square-foot, oceanfront vacation rental in Māʻalaea designated as a condo-hotel, echoed concerns about financial viability. He explained that strict condominium rules make it difficult to rent long-term, and he’d need to charge $4,000 per month to break even.
“Any property that has an ocean view on the beach is usually out of reach for local residents who have common jobs,” he added. If the bill passes, Viebahn said he would have to sell his unit.
Rick Beck, vice president and treasurer of the aging Ka’anapali Royal condominium, highlighted the high maintenance costs, including a $2.6 million roof replacement this year. He explained that revenue from vacation guests is crucial for funding these expenses.
“This bill doesn’t solve the housing crisis,” Beck said. “It just shifts the burden, unfairly, to communities like ours.”
Bill 9 advocates see ‘a huge step in the right direction’
Appeals for sympathy from vacation rental owners went largely dismissed by Bill 9 supporters, who maintained that the issue is one of social and economic justice.
De Andre Makakoa testified about residents’ lost dream of homeownership, recalling that his grandfather was a postman who bought a three-bedroom, two-bath house with “a giant yard.”
“They raised four kids and eight dogs,” he said. “And my uncle still owns that property to this day. That should be normal.”
Instead, “people like us, who grind as hard as we do; honestly, in my opinion, we deserve a lot more, but we’re grinding that hard for the bare minimum, and that’s not okay.”
“This bill we know is not a fix all, but it’s a huge step in the right direction, and it’s a step that we need to be taking right now,” he said.
Jake Carton also conceded that BIll 9 is “not a long-term solution, but it’s one immediate improvement.” He criticized short-term rental owners for prioritizing profits and even county tax revenue, noting the irony of “wealthy property investors, mostly who don’t live on Maui, want robust tax revenues” while often minimizing their own tax payments. Carton accused the banking and real estate industries of creating a “broken ‘free market’ system.”
Alan Lloyd of the Maui Tenants and Workers’ Association testified in support of Bill 9, but contended that it would not control rising rental costs for residents. Current monthly market-priced rents are unaffordable to moderate and low-income households, he said, asking council members to consider rent stabilization legislation in the wake of passage of the short-term rental phase-out bill.
Marnie Masuda-Cleveland, called herself a “haole transplant” who came to Hawaiʻi to teach in the 1990s. She argued in favor of the bill as a step toward justice for Native Hawaiians whose land was “stolen illegally.”
She expressed frustration when “extractive haoles talk about their investments and passive income and retirement and not understand the tone deafness of moving here to make sure that they have wealth and complaining when something happens, and the people whose land this is say, ‘enough.’”
Jackie Keefe, a “transplant from Massachusetts,” reinforced that sentiment, stating that “Hawaiʻi is an illegally occupied sovereign nation.” She maintained that the three-year phase-out is already a compromise and argued that extending it “only rewards delay and gives investors more time to profit off our suffering.”
“Housing should shelter our people, not serve offshore profit,” Keefe said. “Let’s be clear, this is not a ban. We’re asking that commercial operations be removed from residential neighborhoods where they never belonged.”
High costs and Maui’s teacher turnover
Victoria Zupancic, a 14-year educator at Lahainaluna High School, supported returning housing to the long-term residential market. She said the high cost of living and housing is directly related to a high rate of teacher turnover.
Teachers who come to Hawaiʻi realize how expensive it is to live here and leave, she said. Others simply see it doesn’t make economic sense to relocate her for a teaching position.
A drain of water resources
Greg Rylsky shared with council members what it’s like to be a long-term resident living in a “Minatoya” complex where outside investors control the boards of directors and direct policies to benefit visitors over residents.
Also, the amount of water usage is “crazy high,” he said. “We’ve seen 12 people in a two-bedroom unit, right? It’s not just all the people and all the showers and the flushing. Every time somebody checks out, they wash down the whole unit. All the laundry is done. All of the dishes get washed. They hose down the deck. Sometimes they hose down the driveway… We’re filling the pools.”
He said bill opponents maintain that Maui residents can’t afford them; “they’re too rundown and expensive. So these non-resident, speculative investors describe themselves as members of the community with deep connections… (and they are) attempting to convince this committee they’re doing the less fortunate community a favor by owning these TVR properties.”
Oʻahu’s experience with vacation rental regulation
Evan Weber, a windward Oʻahu resident from Kailua, offered a relevant example: In 2022, the Honolulu City Council passed Bill 41, which redefined the minimum short-term rental period from 30 days to 90 days (though currently challenged in court). Weber told council members that Kailua had “one of the worst problems” with TVRs on Oʻahu, and that “short-term rental regulation works. Homes should be in neighborhoods, and vacation rentals should be in resort zones.”
“Our economy did not crash overnight,” Weber said, referring to the impact of Oahu’s regulations. “Tourists are still coming. They’re just not staying.”
Taking a long view
Simon Windell, director of finance for the Lahaina Community Land Trust, asked council members to think long-term: “So it’s not staring at our feet. Let’s look at where we want to go. Let’s ask ourselves, what decisions can we make today that will put us on the right path in 10, 20, 30 years? What do you want the housing stock of West Maui to look like in 2045? That’s what this decision is about.”
Hearing to resume today
By 4:30 p.m., the committee still had 21 people who signed up but had not been called to testify. The panel will continue with a hearing beginning at 5 p.m. today in Council Chambers. The evening session was scheduled to give an opportunity to testify to people who want to be heard in person but are not available during the day.
The committee continues to accept sign-ups for testimony. The panel will begin decision-making deliberations after all public testimony has been completed.