Andrew Church has lived on Maui for more than two decades, while his long-term partner and fiancée, with whom he has a daughter, was born and raised on the island.
After working and saving for years, Church started purchasing properties to operate as rentals in September 2022 and now has four units. His vacation rentals are now the primary source of income for his family.
Maui officials have rolled out a plan to phase out 7,000-plus short-term rentals in an effort to open up more housing for local residents and bring down housing costs — a move that Church said will devastate his family.
“My family is losing sleep every night over this thing,” Church told Business Insider. He said if the ban takes effect, he might not be able to pay his mortgage and would probably have to sell everything and leave Maui, where his fiancé’s family roots go back over a century.
“By enforcing this ban, they are going to bankrupt my family,” he said.
With some of the most expensive real estate in the US, Maui has long had housing issues. Hawaii’s median home price is higher than nearly every other US state. Maui specifically had a median home price of around $1.1 million in July 2024, compared to the countrywide median home price of $438,706, according to Redfin.
The island’s housing problems were exacerbated by the wildfire that devastated Lahaina in August 2023, destroying much of the downtown and displacing thousands of residents.
The plan to phase out some short-term rentals came in the wake of the fire, but as a tourist destination with local housing issues, Maui is hardly alone. Barcelona and New York City are among the cities that have banned or implemented restrictions on Airbnb and vacation rentals.
But on an island the size of Maui, where the tourism industry is estimated to be directly or indirectly responsible for 70% of every dollar generated, the consequences could be significant.
Owners say their property values will tank
The ban, which applies to properties on the so-called “Minatoya List,” includes 7,160 units largely concentrated in the touristy areas of South Maui, primarily Kihei, and West Maui, mostly Kaanapali.
The properties are technically zoned for residential apartments but, since 2001, have been allowed to legally operate as short-term rentals — and have been taxed to that effect. The list is named for the city employee who initially wrote a memo about allowing the short-term rentals, which was eventually put into law.
Maui Mayor Richard Bissen earlier this year announced a plan to end those permissions. The Maui Planning Commission voted unanimously in favor of it, recommending it be approved by the city council. If approved, the ban will take effect, depending on the area, in 2025 and 2026.
Church said three of his four properties are on the list, but when he bought them in 2022 and 2023, he had no idea the list existed. When researching the properties, he confirmed their tax status as short-term rentals on the county site.
He said the units were marketed and sold to him as vacation rentals and that no one, not a real-estate agent or a government official, mentioned the list to him. Church said other owners he knows said the same thing and are also concerned about the financial impacts of the ban. The Maui County mayor’s office did not provide comment when reached by Business Insider.
Jason Gobey, another short-term rental owner, told BI he researched and spoke to real-estate agents as well as others before buying his one-bedroom condo in Kihei in 2019. He also said he confirmed the property’s tax status as a short-term rental and had no idea there could be an issue with it.
Gobey and his wife live in Arizona but spend about four months of the year on Maui. He said he does not make a substantial profit on his condo but that buying it and renting it out was the only way they could afford to visit Maui as often as they do, during which time they are also spending heavily on the local economy.
“We bought it to use it,” he said. “But we need some income off of it.”
Both owners said their property value is going to plunge as a result of the ban. They said plenty of similar units have been listed for sale since the ban was proposed, but that no one is buying them. They feel certain that if they eventually sell their properties it will be at a substantial loss.
Though some of the Minatoya List properties will likely be converted to long-term rentals, Church said it is not financially feasible for him. Due to the high costs associated with property maintenance, he thinks he would have to charge far too much to make a long-term rental work.
Gobey said since he and his wife spend a month on Maui every few months or so, his unit will just sit empty when they are not on the island. Both owners said the people who help them maintain the units, like proper managers and cleaners, would also lose work as a direct result of the ban.
The ban should help Maui’s housing problem, but the wider impacts are unclear
The owners also said they did not think phasing out their rentals would actually solve Maui’s housing crisis, saying the value of the properties would likely still be higher than the average family could afford.
However, Justin Tyndall, an associate professor of economics at the University of Hawaii at Manoa, said the policy change would have a significant positive impact on housing in Maui, increasing the long-term residential housing stock by 13%.
“That would just be a huge flood of new units. Some of them would end up for sale, or some of them would be rented out to locals,” he told BI, adding, “It would definitely make housing more affordable.”
Even if many of the properties would still be unattainable to lower-income residents, increasing the supply of housing would likely put downward pressure on home prices and rents more broadly.
Tyndall said Maui’s housing issue largely comes down to a lack of housing supply resulting in extremely high prices. A significant driver of that is how few new construction projects there have been on the island over the past two decades, in part due to government regulations that make obtaining a permit difficult and costly.
He said some of those regulations make sense, like those intended to protect ecologically sensitive areas, while others are misguided, and that there are changes the government could make to encourage developers to build more housing.
But the benefit of adding the Minatoya List properties to the housing stock is that they are already built.
He said the property value of those units will almost certainly go down, but that that’s not a bad thing for the broader Maui housing problem. He also noted that 85% of the units on the list are owned by people who live out of state, while 92% are owned by people who don’t live on Maui.
While he said there’s a consensus among experts that the change will benefit Maui housing by increasing supply and bringing down costs, he is still looking into what the broader impacts might be.
“Maui is so dependent on tourism, taking away 7,000 visitor accommodation units will certainly reduce tourism levels,” Tyndall said. “It’s unclear by how much.”
He added that most hotels on the island generally operate at 60 to 70% capacity, so some would-be short-term renters will likely end up there, but at this point, it’s still a big unknown.
If the change leads to a significant reduction in tourists visiting Maui, it would mean less tax revenue for the county and job losses for people in the service industry.
As for the short-term rental owners, Tyndall said folks should’ve known this was a possibility and that many people who work in real estate at least knew about the list.
“Property investment involves risk,” he said.
“There’s no guarantee you can operate a vacation rental in perpetuity.”
Are you a short-term rental owner on Maui, or have you or your family struggled to obtain housing on Maui? Want to share your perspective on the plan to phase out some vacation rentals? Contact this reporter at kvlamis@businessinsider.com.
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