Maui Mayor Richard Bissen has proposed phasing out vacation rentals to address the severe housing shortage exacerbated by the 2023 wildfires. A report by University of Hawaii economists suggests that while this policy could increase housing affordability, it would also have negative effects on the economy, including a decline in visitor spending and job losses. The mayor believes that the economic models fail to capture the real-life experiences of residents struggling with housing affordability.
The Maui County Council’s Housing and Land Use Committee may consider incorporating the mayor’s proposal into a bill in the near future. However, there are concerns about the legal implications and costs associated with implementing such a policy. Currently, about one-third of Maui’s visitors use vacation rentals, which offer cost-effective and convenient accommodation options.
The mayor’s proposal would potentially add over 6,000 vacation rental units to Maui’s long-term housing stock, leading to a significant increase in supply. However, this could also result in the loss of visitor accommodations, jobs, and tax revenues. The report suggests alternative approaches, such as increasing taxes on vacation rentals, taxing empty homes, and implementing zoning and permitting reforms.
One suggested approach is to cap the number of vacation rental licenses and auction them off, similar to the management of taxi medallions. This could potentially push less profitable units out of the vacation rental market. Overall, the report highlights the trade-offs associated with the mayor’s proposal and suggests exploring various strategies to achieve the desired housing boost with minimal economic disruption.
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