Mayor Bissen Responds to UHERO Report on Economic Impact of Vacation Rental Phase Out

Mayor Bissen Responds to UHERO Analysis on Economic Impacts of Vacation Rental Phase-Out

In a detailed response to the University of Hawaiʻi Economic Research Organization’s (UHERO) analysis of his proposed vacation rental phase-out, Mayor Richard Bissen of Maui County made it clear that while he respects the data presented, his priorities remain focused on solving the island's pressing housing crisis and ensuring long-term sustainability. The proposal, which was announced on May 2, 2024, aims to phase out thousands of vacation rentals in apartment-zoned districts, particularly in South and West Maui.

The UHERO Report: Economic Disruptions and Potential Benefits

UHERO’s analysis forecast a mixed bag of outcomes from the proposed phase-out, including the conversion of approximately 6,000 vacation rentals to long-term rentals or owner-occupied homes. While this transition is expected to ease the housing crunch and reduce rental costs, it also predicts significant economic disruptions, including the potential loss of 1,900 jobs and a decline in visitor spending by approximately $900 million. State and county tax revenue could also be significantly impacted, with losses estimated to be in the tens of millions annually.

Mayor Bissen’s Response: A Bigger Picture

While acknowledging the economic modeling provided by UHERO, Mayor Bissen emphasized that such analyses cannot fully capture the nuanced realities of local communities. In his prepared statement, he pointed to the lived experiences of Maui residents, highlighting overcrowded multigenerational homes, long commutes, and growing strain on local infrastructure. For Bissen, the human and cultural costs of the housing crisis outweigh purely economic concerns.

"It's important to recognize that economic models — while helpful — cannot fully shape the future of our communities," Bissen said. "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 also highlighted the cultural importance of keeping Maui’s communities intact, stating, “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.”

Housing Crisis as the Central Issue

For Mayor Bissen, the housing crisis on Maui is a top priority. With over 21% of the island's housing stock currently tied up in transient vacation rentals (TVRs), the effects on affordability and availability are undeniable. Bissen stressed that restoring even a portion of these properties for local use could make a significant difference.

“The housing crisis on Maui is unprecedented. With TVRs comprising over 21% of all housing stock, the impacts are real, widespread, and deeply felt by our local families," said Bissen. "This is not just a matter of land use — it’s about restoring housing to residents, honoring the intent of our residential zones, and reducing our over-dependence on tourism."

The mayor's commitment to returning properties to long-term residential use is central to the phase-out proposal. He pointed out that many of the units on the "Minatoya List"—condominiums in apartment-zoned districts, but grandfathered to operate as vacation rentals—“function more like hotels than homes.” He urged property owners to seek rezoning or special use permits if they wish to continue operating these properties as vacation rentals.

The Broader Strategy: Beyond Bill 9

Bill 9, the vacation rental phase-out proposal, is just one component of a broader strategy to address Maui’s housing crisis. According to the mayor, the county is exploring additional solutions, including affordable housing programs, policy reforms, tax incentives, expedited permitting, and investments in infrastructure and new housing development.

“No single solution will solve this crisis — but together, these efforts build a strong, long-term path forward,” Bissen said.

The mayor also reaffirmed his belief that this phase-out is not anti-tourism, but rather pro-resident. He called for swift action on Bill 9 and urged the Maui County Council to consider it as soon as possible. “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,” he said.

Moving Toward Regenerative Tourism and Sustainable Solutions

Bissen framed the vacation rental phase-out as part of a larger vision for regenerative tourism, which emphasizes quality over quantity and the protection of spaces meant for residents. In his response to UHERO’s report, the mayor pointed out the overdependence on tourism that has made Maui vulnerable to economic shocks, such as the 2023 wildfires and the COVID-19 pandemic.

"Short-term rentals concentrate wealth and economic benefits with off-island investors, while local residents bear the costs. Revenue from TVRs is not evenly distributed, while the strain on local infrastructure, services, and community impacts fall on full-time residents," said Bissen. “Restoring units to residential use reinforces zoning integrity and supports Maui’s transition toward regenerative tourism and a more sustainable economy.”

He also emphasized that jobs lost in the vacation rental sector could potentially shift into other important sectors, such as healthcare, education, construction, agriculture, and traditional hospitality.

Addressing Fiscal Impacts and Tax Options

While the UHERO report raised concerns about potential losses in tax revenue, Bissen pointed out that these impacts would only be felt after the phase-out takes effect, allowing time for the county to plan and find alternative revenue streams. His office also noted potential solutions, such as adjusting real property tax rates for transient vacation rentals, implementing an empty homes tax, or exploring policy adjustments like special use permits and rezoning.

“These tools provide a path forward that balances fiscal responsibility with our commitment to housing our local residents,” the mayor’s communications office stated.

A Call for Action

The mayor concluded his remarks with a strong call for action, urging Council Member Tasha Kama, chair of the Housing and Land Use Committee, to schedule Bill 9 for Council consideration as soon as possible. “Delaying action only makes those challenges more severe,” he said. “The cultural and social costs of inaction are too high. Protecting our people and preserving our quality of life is not just good policy — it’s a moral responsibility.”

In the end, Mayor Bissen’s response underscores his commitment to Maui’s residents and the urgent need to address the island’s housing crisis. With vacation rentals comprising a significant portion of the island’s housing stock, his administration’s move to reclaim these properties for long-term use is seen as a critical step in restoring balance to Maui’s housing market and ensuring that the island remains a place where local residents can thrive alongside a sustainable tourism industry.

DISCLAIMER:

We strongly oppose the removal of all Transient Vacation Rentals (TVRs) listed on the Minatoya list. We believe such a move would cause more harm than good, potentially disrupting local communities and businesses. Our position is that any changes to TVR policies should be carefully considered, with a focus on balancing the needs of residents, visitors, and the long-term sustainability of Maui's housing and tourism sectors.

Tags