Short Term Rentals for Condos on the Minatoya List

What’s Happening in Maui

Short-Term Rentals for Condos on the Minatoya List: What’s Happening in Maui?

Maui, one of Hawaii's most iconic islands, is known for its breathtaking beaches, luxury resorts, and thriving vacation rental market. However, local officials are pushing to ban over 7,000 short-term rentals (STRs) in specific areas, citing the need for more long-term housing for residents. This move has sent shockwaves through the vacation rental industry, as it highlights how rapidly regulations can change—and why staying informed and adaptable is crucial for rental managers.

Let’s break down what’s happening and why the fate of condos on the Minatoya list is at the center of this debate.

What’s Happening?

Maui’s mayor, Richard Bissen, has proposed a law that would eliminate short-term rentals (STRs) in certain condo buildings, with plans to transition those properties into long-term housing. The primary goal is to free up more housing for local residents, addressing the ongoing housing crisis on the island.

Proposed Timeline:

• July 1, 2025: STR ban starts in West Maui (which includes popular areas like Lahaina, Kaanapali, and Kapalua)
• January 1, 2026: The ban is set to expand to the rest of Maui County.

However, there’s a significant complication: a key economic study that was supposed to justify the ban has failed to attract any bidders. This means that local officials are moving forward with the proposal without solid data to support the decision (Hawaii Travel News, Feb 19, 2025).

What’s Actually Being Banned?

Still Allowed:

• Hotels and resorts
• Some condo complexes with active STR permits

At Risk:

• Over 7,000 condos on the Minatoya List, which have been legally operating as STRs for decades.

What is the Minatoya List?

The Minatoya List refers to a group of condos located in apartment-zoned areas that have legally operated as short-term rentals since the 1990s. The list is named after David Minatoya, a former county attorney who ruled that these rentals could legally operate as STRs. These properties have been a significant part of Maui’s tourism economy, and they account for 42% of the island’s property tax revenue (Hawaii Free Press).

Now, with the mayor’s proposal, these condos could either be forced into long-term rentals or left vacant.

Why Is This Controversial?

The proposed ban is creating a heated debate between two major issues: the housing crisis and the economic impact of STRs.

• Housing Crisis: Local officials argue that the ban will help free up housing for residents, addressing the island’s severe housing shortage.
• Economic Impact: Critics counter that these condos are not well-suited for long-term residents due to factors like high HOA fees, small sizes, and locations designed for vacationers. Additionally, the ban could have a devastating impact on Maui’s economy.

The Travel Technology Association warns that the ban could lead to:

• $1.3 billion in lost revenue
• 7,800 job losses
• $370 million in lost earnings for local businesses

And that’s not all. Legal experts, including Greg Kugle, an STR law expert, predict that if the bill passes, litigation is all but guaranteed, meaning the proposal could face prolonged legal challenges.

What Does This Mean for Vacation Rental Managers?

The Maui situation serves as a warning to vacation rental managers and investors: regulations can change quickly, and they need to stay informed to adapt to new policies.

Here’s what managers should keep in mind:

• Global Warning: Other tourist destinations might follow Maui’s lead and introduce similar regulations. Staying on top of local policies will help anticipate and adapt to potential changes.
• Market Risks & Opportunities: The uncertainty surrounding the ban is lowering property values for STRs in Maui. Investors could find deals, but these come with high risks due to the potential for stricter regulations or a complete ban.
• Engage Locally: STR bans often stem from concerns about housing shortages and community impact. By proactively engaging with local authorities and demonstrating the value of STRs, vacation rental managers can help prevent these restrictions.

What’s Next?

• June 2025: Maui’s Planning Commission will review the proposal and gather public testimony.
• Later in 2025: The Maui County Council is expected to vote on the ban.
• Legal Battles: If the ban is approved, legal challenges could delay or block it for years, prolonging the uncertainty.
• Alternative Solutions: There’s a possibility that alternative solutions, such as higher STR taxes or incentives to build more housing, could emerge as a compromise.

Many insiders believe that most condos on the Minatoya List will ultimately be safe. However, the market is already feeling the impact of the uncertainty, with some investors wary of the potential changes.

Where is Maui, and Why Does This Matter?

Located in the heart of Hawaii, Maui is a premier global travel destination, attracting over 3 million visitors annually. The island’s stunning beaches, world-class surfing spots, and luxurious accommodations make it a top choice for vacationers.

A significant portion of these visitors choose to stay in vacation rentals rather than hotels, making STRs a major contributor to Maui’s economy. The proposed ban could shake up a key industry that supports both local businesses and thousands of jobs across the island.

Conclusion: What This Means for the Future of STRs in Maui

Maui’s push to phase out short-term rentals in favor of long-term housing is a complex and contentious issue, with significant economic and social implications. The Minatoya List condos—which have been part of Maui’s tourism economy for decades—are now facing an uncertain future.

For vacation rental managers, this situation underscores the need for vigilance and adaptability. Keeping up-to-date with local regulations and understanding their impact on the market can help mitigate risks and identify opportunities. As Maui’s situation unfolds, other destinations may follow suit, so it’s crucial to be proactive and stay engaged with local communities to help ensure a sustainable future for short-term rentals.

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