financial impact
This potential annual losses in the billions represents a significant portion of Maui’s economy, which is heavily reliant on tourism. In terms of tax revenue, the loss impacts a substantial portion of the county’s tax base, exacerbating the financial strain already felt from recent economic challenges. This includes a significant hit to the General Excise Tax, Transient Accommodations Tax, and Property Tax, essential for funding public services and infrastructure.
Banning STR’s – Breakdown of the Financial Landscape
The Minatoya rule allows many of our rentals to be used as vacation rentals, providing a crucial income stream for property owners. This income supports local businesses and services, driving our economy. Removing this rule would cut off this income, causing financial instability for property owners and dramatically reduce spending in our local economy, which would lead to EVEN MORE business closures and further our economic downturn.
Condos Affected: 7,100
Tourist Spending
Guests Per Day: 12,000 (80% occupancy x 2 guests)
Tourist Revenue Lost Annually: $Billions
Tax Losses – Annually
General Excise Tax: $100 Million lost annually
TAT: $72.5 Million lost annually
Property Tax adjustments: $63.9 Million lost annually
Taxes Lost Annually: 200+ Million
Local Labor Market
Additionally, this does not account for the loss of more than 10,000 local jobs, a number that will likely be much higher drawing data from the Hawaii Department of Business, Economic Development & Tourism (DBEDT).
This loss is more than just numbers; it’s a blow to local businesses, jobs, and our community’s vibrancy. While we need affordable housing, sacrificing our economy is not the solution.
Community Displacement
Job losses and economic instability would force many residents to leave Maui in search of employment, further undermining community stability. Additionally, converting short-term rentals to long-term rentals doesn’t guarantee affordability for locals, potentially leaving these properties vacant and failing to address the housing needs of our community.
Instead of restricting vacation rentals, we should focus on real solutions: increasing our housing supply and diversifying Maui’s economy. Investing in infrastructure, technology, and education can provide sustainable growth and reduce our dependency on tourism.
IS THIS AFFORDABLE HOUSING?
Converting short-term rentals to long-term rentals doesn’t guarantee affordability for locals, potentially leaving these properties vacant and failing to address the housing needs of our community.
We need to look at what affordable housing really is.
WEST SIDE BUILDING
Built in: 1974
TVR started in: 1974
Units in Building: 28
Parking Spots: 28
Other Attributes
Restricted parking
Limited Storage
Example Unit – 2 Bedroom, 2 Bathroom – 720 SF
- AOAO Fees: $1,900 (increases ~4% annually)
- Insurance: $300
- Electric: $197
- Special Assessments: $400
- +Mortgage: $3,000 – $4,000
AFFORDABLE HOUSING? Here is the cost to own a 700 sf, 50 year old condo with very limited parking or storage.
$5,700 – $6,700 PER MONTH*
*This does not factor in skyrocketing insurance rates, annual AOAO fee increases, construction cost increases and a higher rate of maintenance for an older building.
KAPALUA BAY – Another Example
Maui’s affordable housing crisis is real, how do you solve it after the Lahaina Fire?
Will eliminating short term rentals be the solution?
Maui’s Mayor Richard Bissen is proposing legislation to eliminate short term rentals in Apartment Zoning.
In this video Jesse G. Wald will explore one of the properties that would be impacted by the legislation… Kapalua Bay Villas. (Jesse G. Wald)
