A new study found there would be both positive and negative economic impacts if Maui County’s proposal moves forward to phase out nearly half of Maui’s transient vacation rental properties.
The proposal seeks to remedy the island’s worsening housing crisis by converting short-term rentals into long-term housing. The affected properties, known as the “Minatoya List,” are in apartment-zoned districts.
Researchers at the University of Hawaiʻi Economic Research Organization found the proposal would increase Maui’s available long-term housing by about 6,000 units.
“That’s the number of units that would be affected by this policy to the long-term housing stock, which is equivalent to about 10 years of development the current pace of construction, or a 13% increase in the housing stock,” said Trey Gordner, one of the UHERO researchers who authored the report.
But that could come at the cost of reducing visitor spending by nearly $900 million a year and the loss of about 1,900 jobs.
“We project that the economy would contract by about 4%, and if you think about this, this is somewhat intuitive, because what this proposal really is talking about is a reduction in visitor accommodations,” explained Gordner in a press conference. “And leisure and hospitality employ about one in four workers in Maui County.”
There’s also a projected decline in condo prices by about 25%. Out-of-state investors own 85% of Maui’s transient vacation rentals, though the market-wide effects on condo prices would also impact owner-occupied properties.
In a statement sent to HPR, Mayor Richard Bissen called the UHERO report a “valuable first step” to better understanding the economic implications of the decision, but said it looked at the issue with a narrow scope.
“It’s important to recognize that economic models—while helpful—cannot fully shape the future of our communities. They do not reflect the lived experiences of our residents: the families crowded into multigenerational homes because younger generations can’t afford their own, the workers commuting longer distances or leaving Maui entirely, and the growing strain on our infrastructure and sense of place,” Bissen said.
“Most importantly, they fail to acknowledge the cultural loss we face when our people are forced to leave—when generations of knowledge, tradition, and aloha are displaced from the very communities that shaped them,” he continued.
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The report was commissioned by the Hawaiʻi Community Foundation. UHERO Executive Director Carl Bonham said the study’s role was solely examining the economic impacts of the county’s proposal, though he acknowledged there are other factors to consider in the decision-making process.
According to the report, property tax revenues could fall by up to $60 million annually by 2029 because of changes in tax class and decreasing valuations. General Excise Tax and Transient Accommodations Tax revenues would together drop another $15 million per year.
According to Maui County, there are about 15,000 short-term rentals in Maui County — the highest percentage relative to housing stock in the state — representing more than 20% of total housing stock. The impact is even more concentrated in certain areas, with this category making up roughly 50% of South Maui’s and 34% of West Maui’s housing inventory — where the impact of the phase-out proposal is focused.
Though there are a lot of impacts to consider, Gordner pointed out that inaction could also have damaging effects.
“There are also costs to doing nothing,” he stressed. “There’s a current situation of rent inflation, right? Housing prices are rising. It’s not a static environment, and the increasing cost of living is causing people to leave Maui County, which will also have economic impacts related to a decrease in, you know, economic activity and jobs and workers and so forth.”
The study also examined some alternatives to a full conversion of Minatoya properties.
“There are also some ways that we outlined that could potentially accommodate the same policy goal of half of TVRs becoming long-term rentals that could mitigate some of the trade-offs, including increasing property taxes on these units, or potentially auctioning licenses to operate a TVR in Maui County,” Gordner explained.
Bonham said it’s about weighing the pros and cons.
“There’s a hit to economic activity, there’s a hit to jobs, there’s a hit to income, and there are some gains in housing affordability,” he said. “So those trade-offs have to be decided by the policymakers.”
Bissen stressed the phase-out proposal is “one piece of a broader strategy to address our housing crisis.”
Short-term rentals strengthen the island’s overdependence on the visitor industry, the county said, while the economic benefits of TVRs largely benefit out-of-state investors.
“Maui’s economic overreliance on tourism is a known risk, and continuing to cater to short-term rentals reinforces that vulnerability,” said Maui County spokesperson Laksmi Abraham in the county statement. “While TVRs may generate revenue, that revenue is not equitably distributed. Meanwhile, the strain on infrastructure, services, and community cohesion falls squarely on the people who live here full time.”
Ultimately, Bissen said, the county’s decision comes down to prioritizing the Maui community.
“This phase-out is not anti-tourism—it is pro-resident,” he said. “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.”
The Maui County Council will ultimately decide on passage of the phase-out proposal — a discussion Bissen urged to be scheduled “as soon as possible.”