Council Committee Approves Bill 88 to Create New Hotel Zoning Framework

The ongoing debate surrounding Maui County's short-term vacation rental landscape took a major step forward this week. In a 6-1 vote, the Maui County Council's Housing and Land Use Committee advanced Bill 88, a measure designed to create new hotel zoning categories.

The vote overrides the unanimous recommendations for rejection from all three of the county's planning commissions (Maui, Molokai, and Lanai), highlighting the complex balancing act between housing preservation and real estate market stability.

What is Bill 88?

It is critical to note exactly what Bill 88 does—and what it does not do.

• What it does: The bill establishes two brand-new hotel zoning designations: H-3 and H-4. These categories are specifically modeled on existing apartment-district standards to provide a clean, structural framework for properties currently on the Minatoya List.
• What it does not do: Bill 88 does not automatically rezone a single property. Instead, it creates a legislative pathway. If the bill passes the full council, individual property owners would still need to apply for a zone change on a case-by-case basis.

Committee Chair Nohelani Uʻu-Hodgins defended the measure, emphasizing that it matches the longstanding, continuous use of these properties. “We have to blend fiscal responsibility with continual apartment uses in apartment districts and hotel uses in hotel districts,” she noted.

The Connection to the Bill 9 Phase-Out

Bill 88 functions as a direct response to Bill 9, which was signed into law in late 2025 to phase out an estimated 4,500 transient vacation rentals (TVRs) operating in apartment-zoned districts. Bill 9 aims to return those units to long-term residential housing for local families, setting a phase-out deadline of January 1, 2029, for West Maui and January 1, 2031, for the rest of the county.

Supporters of Bill 88, including Mayor Richard Bissen and various real estate and business advocates, view the new hotel zones as a necessary, transparent tool to manage this transition without causing undue economic volatility or legal exposure.

Key Amendments Approved

Before sending the bill to the full Council, the committee unanimously passed two significant amendments to tighten its scope:

1. Excluding Molokai: Following a direct request from the Molokai Planning Commission, the committee voted to entirely exempt Molokai from having any H-3 or H-4 properties.
2. Strict Verification Rules: To prevent other short-term rentals from using the new zones as a backdoor, property owners must prove and have confirmed by the Planning Department that a transient vacation rental use legitimately occurred on the property prior to September 24, 2020.

Perspectives on Both Sides

The committee meeting drew passionate testimony from across the community:

• In Favor: Proponents argued that many of the affected aging complexes are structurally built as second homes or vacation villas rather than traditional long-term residential units. Testifying real estate professionals and owners shared that forcing a blanket phase-out could result in sharp price corrections for individual retirement portfolios without necessarily converting the units into affordable housing options for local families.
• In Opposition: Dissenting voices, including Council Member Keani Rawlins-Fernandez and representatives from community groups like Lahaina Strong, expressed deep concern that Bill 88 could undermine the core goal of Bill 9. They pointed out that comprehensive independent visits to over 100 Minatoya properties revealed very few actually operate with hotel-like infrastructure (such as front desks or on-site staff), arguing that residential condominiums should be preserved for residents.

What’s Next?

Bill 88 now moves to the full Maui County Council for the first of two formal readings. As the community navigates these pivotal policy shifts, the real estate landscape will continue to adapt to new regulatory boundaries.

Your Maui Real Estate Partners

Keeping up with changing zoning laws is vital whether you are looking to protect an investment or search for a long-term home on the island. If you are planning on buying or selling your home this year, don't hesitate to contact us. The Smith Team is here to guide you in your real estate journey and help you navigate these updates with clarity and confidence.

How do you see the creation of these new hotel zones impacting Maui's broader housing goals? Let's discuss what this changing framework means for your real estate plans.

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