Maui Mayor Richard Bissen has proposed phasing out vacation rentals in an effort to address the severe housing shortage on the island following the 2023 wildfires. University of Hawaii economists conducted a study on the potential economic impact of this proposal and found that while it would increase housing affordability, it would also lead to job losses, lower incomes, and decreased tax revenues. Visitor spending is expected to decline significantly.
The mayor believes that the economic models used in the study do not fully capture the hardships faced by residents who are struggling with housing insecurity. He emphasized the cultural loss that occurs when people are forced to leave their communities due to unaffordable housing.
The Maui County Council’s Housing and Land Use Committee will consider incorporating the mayor’s proposal into a bill, but some council members have expressed concerns about the legal implications and costs associated with the policy. About one-third of Maui’s visitors use vacation rentals, and the policy would impact a significant portion of the housing supply on the island.
The study suggests alternative approaches to increase housing availability, such as increasing taxes on vacation rentals, taxing empty homes, and implementing zoning and permitting reforms. Auctioning off vacation rental licenses could also be a potential solution to push less profitable units out of the market. Overall, the report highlights the complex trade-offs associated with addressing the housing crisis on Maui.
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