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Plan to ban 7,000 Maui short-term rentals targets resort condos

Henry M.

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West Hawaii Today story

Includes various villas at Kapalua, Maui Villas next to the Westin Ka'anapali Ocean Resort Villas, and others. Several in Kihei and Wailea too. Challenges are expected.
 

easyrider

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West Hawaii Today story

Includes various villas at Kapalua, Maui Villas next to the Westin Ka'anapali Ocean Resort Villas, and others. Several in Kihei and Wailea too. Challenges are expected.

Most of the timeshare condos we stay in on Maui are not resorts. They are regular condos. This would help the workers and others looking for a long term dwelling but people spent a lot of money for those condos. I wonder what they are offering the owners of these condos ?

Bill
 

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This is an eyebrow raising list. I see a few familiar names that are also timeshare names - I don't know if there are split uses (some privately owned, some owned as timeshares) but Kuleana, Papakea, and Ke Nani Kai on Molokai are names that are associated with timeshares. I don't see how they can change the intended use for resort properties. I guess that anything is possible but it would seem that they would be shooting themselves in the foot by reducing the number of units available for tourists, reducing jobs, then converting those units to expensive residential housing. Even if Maui County prevails, I don't see how this pencils out. The maintenance fees on a lot of those resort properties have to be significant. How will people be able to afford those? I know that I couldn't. It seems a bit like wishful thinking.

I think that the first thing that they should target and enforce are any ohanas or Airbnbs. Those should be reserved for on island residents instead of tourists. Move tourists back into the resort areas and open up the residential areas for residents. Incentivize development of affordable housing through tax breaks perhaps.
 

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It will be interesting to see what happens to the local housing market. Prices have exploded in the last couple of years as more condos were bought up to become STR properties. It will still be difficult to afford the maintenance fees and prices, but hopefully housing won't be bought up just to rent out at short term rates. It won't be as much of a business anymore. However, even prices for private homes not being used for STR have risen a lot. There is the problem of gentrification of the more desirable areas. Even if not STR, a limited number of housing units are being bought up as vacation homes or even primary residences by those with means, driving up prices and squeezing out the local population. I see that happening even where I live on the mainland. STR is just one of many factors.

I see both sides of this debate. If I were an owner, I would like to be able to do with my property as I please, and if STR was the most profitable for me, I'd like to be able to do it. I would also be upset if the rules of the game are changed after I've made an investment. However, if I wanted to actually live there, I'd be upset about the lack of any housing at reasonable prices, either for rent or for purchase. I would not be able to compete with short term renters willing to spend a fortune for a week or two of lodging.

On the other hand, supply and demand will drive prices up regardless of how the property ends up being used. I looked at Kahoma Village next to Cannery Mall a few years back. They were supposed to be houses for local residents. At over $600K, they were already expensive, but they sell for over $1M these days as people with money like the location and are willing to pay whatever it takes to own a house there.

I think overall, the local area will benefit from less STR of what would otherwise be long term housing units. Hopefully housing prices will come down if a law like this is enacted. However I think this will be fought in court for some time to come. Housing will still remain unaffordable for local workers, even if prices come down some.

I don't think true timeshares will be subject to this law. It is one thing to stop full ownership properties from being short-term rentals vs changing the basic ownership structure of a timeshare.
 

easyrider

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I don't think true timeshares will be subject to this law. It is one thing to stop full ownership properties from being short-term rentals vs changing the basic ownership structure of a timeshare.

I wonder how this works. Would condos with a hotel zoning be exempt and condos with a r-5 zoning that were originally built and approved to be timeshares lose their STR status ?

Bill
 

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It is all speculation at this point. We'll have to see what the proposed law actually says.
 

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I don't think this will negatively affect timeshares. Could help with managing MFs because employees and staff can live close-by. Could make for more housing for locals which is good.

Have been reading that hotel and vacation developers have been considering Lahaina for new resorts. Maui will likely get a lot of $$$ from developer fees to support local housing.

Not good for vacation condo owner prices. Glad I don't own one.
 

easyrider

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Glad I don't own one.

Interesting is many points system timeshares have a small amount of inventory in resorts like Papakea, Valley Isle and others condo buildings in Maui and throughout Hawaii. I guess these could be sold off.

Bill
 

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I did not know that. It won't affect the major 100% timeshare buildings like the Westins, Hyatt and MOC.
 

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It seems to me the solution is to just incentivise building low cost housing. Make sure zoning and the like is enforced so you can't buy a house and turn it into STR, you have to build new in a properly zoned area for that. Changing after the fact is always going to be a huge PITA and lots of court battles. I still feel like the main problem is just not building enough housing.
 

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There are also two projects on Molokai, the 120-unit Ke Nani Kai condo completed in 1983 as part of Kaluakoi Resort, and the 126-unit Wavecrest condo developed in 1975 and initially sold mostly to Hawaii residents who wanted to “get away” to Molokai.

From the news story. Does @slip know about this?
 

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From what I have been reading elsewhere this is expected to be held up in the courts for years.
 

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slip

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From the news story. Does @slip know about this?
Yep, I've been aware for quite some time. It doesn't affect me at WaveCrest since we live here. The rest we'll have to see. I agree with the others. I think it will be held up in the courts for a very long time.🤙🏻
 

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I saw a list that included Hono Koa a while back and posted it here. We own three weeks at the "resort" but it isn't really a resort, just an apartment, probably exactly what Maui wants. I didn't see a detailed list in that article. Would be nice to know if they are still targeting our little condo resort. Is Maui just going to take a place like Hono Koa by force?
 

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It seems to me the solution is to just incentivise building low cost housing. Make sure zoning and the like is enforced so you can't buy a house and turn it into STR, you have to build new in a properly zoned area for that. Changing after the fact is always going to be a huge PITA and lots of court battles. I still feel like the main problem is just not building enough housing.

As Yoda always said, "The nail, hit it on the head you have."

If I were made dictator of Hawaii county, I would have every single-story strip mall razed to the ground, one-at-a-time, starting with the Keauhou Shopping Center. Rebuild three-story mixed-use buildings with business as usual on the ground floor, and two floors of residential above that. Just that first project would create 350,000 square feet of residential space. Investors can't buy apartments. And they're not going to get rented to out-of-state tourists as vacation properties, either.

The property owners at Keauhou Shopping Center would get three times the rent -- which should make them happy about loss of use from the whole raze-and-rebuild thing. I suggested doing that for my coffee tasting room. I need to tear this place down and rebuild it. "We don't allow mixed use" said the planning department.

As it stands, getting a permit to do ANY building is about as much fun as a multi-year root canal. And what's being built? Vacation palaces. Because that's where the money is. Locals will never see the interior of these houses unless they happen to be on the construction crew.
 

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From what I have been reading elsewhere this is expected to be held up in the courts for years.

After the fact it can go to courts. Local municipalities set zoning regulations and decide on non-conforming land use issues. Starting on July 1, 2025 for West Maui and Jan 1 2026 for all of Maui, all housing that is still used for vacation rentals in apartment zoning will no longer be able to rent short term.

Since it is a government referendum, which are in a way the laws, once passed, the referendum would go into effect before the lawsuits go to courts, imo.

Bill
 

Luanne

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After the fact it can go to courts. Local municipalities set zoning regulations and decide on non-conforming land use issues. Starting on July 1, 2025 for West Maui and Jan 1 2026 for all of Maui, all housing that is still used for vacation rentals in apartment zoning will no longer be able to rent short term.

Since it is a government referendum, which are in a way the laws, once passed, the referendum would go into effect before the lawsuits go to courts, imo.

Bill
Bill how are you so sure this will be true? There are condos on that list, like Maui Hill where we own, that are partially timeshare, partically fully owned condos, and partially rental units managed by Aston. How will anyone decide which units will no longer be available? Currently the entire resort is designated "apartment".
 

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I saw a list that included Hono Koa a while back and posted it here. We own three weeks at the "resort" but it isn't really a resort, just an apartment, probably exactly what Maui wants. I didn't see a detailed list in that article. Would be nice to know if they are still targeting our little condo resort. Is Maui just going to take a place like Hono Koa by force?
Cindy, I think this is the list you are referring to.

 

easyrider

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Bill how are you so sure this will be true?

Mostly because I can read, lol.

It could go a few ways. If the referendum doesn't pass, which might happen, nothing happens except awareness to the situation. If it does pass, a different government could be voted in at the end of this year and could change it. My guess is the regular people that actually live on Maui want this to happen. The big resorts probably want this to happen. The large land owners probably want this to happen. I think it's going to happen.

To use the properties that lose STR status, a rental term would be for at least 30 days, which could work for many retired persons.

Bill
 

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As I understand it, they want to remove "Transient Vacation Rentals as a permitted use within the A-1 and A-2 Apartment Zoning Districts.". See the list linked by Luanne above for the zoning of various properties.
 

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As I understand it, they want to remove "Transient Vacation Rentals as a permitted use within the A-1 and A-2 Apartment Zoning Districts.".

I read elsewhere they are "un-grandfathering" them. Someone will surely correct me if I'm wrong.

It's always Maui. Anytime something is happening that may reduce visitor numbers, it's almost certainly going to have a Maui dateline. Assuming two visitors per affected unit (and it's probably more than that) and generously assuming only 80% annual occupancy, that's four million fewer visitors. Maui has been throwing legislative pizzas at the wall for years hoping something sticks. I wish them luck.
 

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The property owners at Keauhou Shopping Center would get three times the rent -- which should make them happy about loss of use from the whole raze-and-rebuild thing. I suggested doing that for my coffee tasting room. I need to tear this place down and rebuild it. "We don't allow mixed use" said the planning department.

Exactly city planners are more interested in making sure cars have a place to park for free rather than people having a place to live. A place to live should be cheap. A place to park should be very expensive.
 

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Exactly city planners are more interested in making sure cars have a place to park for free rather than people having a place to live. A place to live should be cheap. A place to park should be very expensive.

I think that will prove to be an unpopular opinion. It also never fails that any time Maui slings one of these legislative pizzas at the wall, tourists clutch pearls and become indignant about the possible increase in cost.
 

easyrider

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As I understand it, they want to remove "Transient Vacation Rentals as a permitted use within the A-1 and A-2 Apartment Zoning Districts.". See the list linked by Luanne above for the zoning of various properties.

I think you are right Henry.

The referendum passed on March 5, 2024 and gives the counties powers to tighten zoning regulations. The referendum defines short term rental to any accommodation rented for under 180 days. The referendum leaves it up to the county to decide zoning issues. Mayor Bissen wants to remove all Transient Vacation Rentals out of the apartment zoned districts on Maui.

Bill


SECTION 1. The legislature finds that the holding in Hawaii Legal Short-Term Rental Alliance v. City and County of Honolulu, No. 22-cv-247-DKW-RT (D. Haw., 2022), denied the city and county of Honolulu from implementing Ordinance No. 22-7, insofar as it prohibited thirty- to eighty-nine-day home rentals, or the advertisement of such rentals, in any district on Oahu. Notwithstanding, it is the legislature's intent to honor and wholeheartedly support the home rule authority provided to the counties relating to zoning, to ensure that the counties are able to "guide the overall future development" of their local jurisdictions in a manner they deem fit, using the "tools available to the county to put [their] general plan into effect in an orderly manner", as stated in section 46-4(a), Hawaii Revised Statutes.

Accordingly, the purpose of this Act is to amend existing law governing the zoning authority granted to counties to allow the counties to:

(1) Regulate by zoning ordinance the time, place, manner, and duration in which uses of land and structures may take place; and

(2) Amortize or phase out transient accommodations uses in residential or agricultural zoned areas.



SECTION 3. Section 237D-1, Hawaii Revised Statutes, is amended by amending the definition of "transient accommodations" to read as follows:

""Transient accommodations" means the furnishing of a room, apartment, suite, single family dwelling, shelter, or the like to a transient for less than one hundred eighty consecutive days for each letting in a hotel, apartment hotel, motel, condominium or unit as defined in chapter 514B, cooperative apartment, dwelling unit, or rooming house that provides living quarters, sleeping, or housekeeping accommodations, vehicles with, or advertised as including, sleeping accommodations, or other place in which lodgings are regularly furnished to transients."

SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.


SECTION 6. This Act shall take effect on July 1, 2040; provided that section 3 shall take effect on January 1, 2025.
 
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