Hawaii lawmakers take aim at vacation rentals after Lahaina wildfire amplifies Maui housing crisis (2024)

HONOLULU — Amy Chadwick spent years scrimping and saving as a single mother of two to buy a house in the town of Lahaina on Maui. But after a devastating fire leveled Lahaina in August and reduced Chadwick’s home to white dust, the cheapest rental she and her now-husband could find for their family and dogs cost $10,000 a month.

Chadwick, a fine-dining server, moved to Florida where she could stretch her homeowners insurance dollars. She’s worried Maui’s exorbitant rental prices, driven in part by vacation rentals that hog a limited housing supply, will hollow out her tight-knit town.


Most people in Lahaina work for hotels, restaurants and tour companies and can’t afford $5,000 to $10,000 a month in rent, she said.

“You’re pushing out an entire community of service industry people. So no one’s going to be able to support the tourism that you’re putting ahead of your community,” Chadwick said by phone from her new home in Satellite Beach on Florida’s Space Coast. “Nothing good is going to come of it unless they take a serious stance, putting their foot down and really regulating these short-term rentals.”

The Aug. 8 wildfire killed 101 people and destroyed housing for 6,200 families, amplifying Maui’s already acute housing shortage and laying bare the enormous presence of vacation rentals in Lahaina. It reminded lawmakers that short-term rentals are an issue across Hawaii, prompting them to consider bills that would give counties the authority to phase them out.

Gov. Josh Green got so frustrated he blurted out an expletive during a recent news conference.

“This fire uncovered a clear truth, which is we have too many short-term rentals owned by too many individuals on the mainland and it is b——t,” Green said. “And our people deserve housing, here.”

Vacation rentals are a popular alternative to hotels for those seeking kitchens, lower costs and opportunities to sample everyday island life. Supporters say they boost tourism, the state’s biggest employer. Critics revile them for inflating housing costs, upending neighborhoods and contributing to the forces pushing locals and Native Hawaiians to leave Hawaii for less expensive states.

This migration has become a major concern in Lahaina. The Council for Native Hawaiian Advancement, a nonprofit, estimates at least 1,500 households — or a quarter of those who lost their homes — have left since the August wildfire.

The blaze burned single family homes and apartments in and around downtown, which is the core of Lahaina’s residential housing. An analysis by the University of Hawaii Economic Research Organization found a relatively low 7.5% of units there were vacation rentals as of February 2023.

Lahaina neighborhoods spared by the fire have a much higher ratio of vacation rentals: About half the housing in Napili, about 7 miles north of the burn zone, is short-term rentals.

Napili is where Chadwick thought she found a place to buy when she first went house hunting in 2016. But a Canadian woman secured it with a cash offer and turned it into a vacation rental.

Also outside the burn zone are dozens of short-term rental condominium buildings erected decades ago on land zoned for apartments.

In 1992, Maui County explicitly allowed owners in these buildings to rent units for less than 180 days at a time even without short-term rental permits. Since November, activists have occupied the beach in front of Lahaina’s biggest hotels to push the mayor or governor to use their emergency powers to revoke this exemption.

Money is a powerful incentive for owners to rent to travelers: a 2016 report prepared for the state found a Honolulu vacation rental generates 3.5 times the revenue of a long-term rental.

State Rep. Luke Evslin, the Housing Committee chair, said Maui and Kauai counties have suffered net losses of residential housing in recent years thanks to a paucity of new construction and the conversion of so many homes to short-term rentals.

“Every alarm bell we have should be ringing when we’re literally going backwards in our goal to provide more housing in Hawaii,” he said.

In his own Kauai district, Evslin sees people leaving, becoming homeless or working three jobs to stay afloat.

The Democrat was one of 47 House members who co-sponsored one version of legislation that would allow short-term rentals to be phased out. One objective is to give counties more power after a U.S. judge ruled in 2022 that Honolulu violated state law when it attempted to prohibit rentals for less than 90 days. Evslin said that decision left Hawaii’s counties with limited tools, such as property taxes, to control vacation rentals.

Lawmakers also considered trying to boost Hawaii’s housing supply by forcing counties to allow more houses to be built on individual lots. But they watered down the measure after local officials said they were already exploring the idea. Short-term rental owners said a phase-out would violate their property rights and take their property without compensation, potentially pushing them into foreclosure. Some predicted legal challenges.

Alicia Humiston, president of the Rentals by Owner Awareness Association, said some areas in West Maui were designed for travelers and therefore lack schools and other infrastructure families need.

“This area in West Maui that is sort of like this resort apartment zone — that’s all north of Lahaina — it was never built to be local living,” Humiston said.

One housing advocate argues that just because a community allowed vacation rentals decades ago doesn’t mean it still needs to now.

“We are not living in the 1990s or in the 1970s,” said Sterling Higa, executive director of Housing Hawaii’s Future. Counties “should have the authority to look at existing laws and reform them as necessary to provide for the public good.”

Courtney Lazo, a real estate agent who is part of Lahaina Strong, the group occupying Kaanapali Beach, said tourists can stay in her hometown now but many locals can’t.

“How do you expect a community to recover and heal and move forward when the people who make Lahaina, Lahaina, aren’t even there anymore?” she said at a recent news conference as her voice quivered. “They’re moving away.”

Hawaii lawmakers take aim at vacation rentals after Lahaina wildfire amplifies Maui housing crisis (2024)


What is the problem with affordable housing in Hawaii? ›

Across Hawaii, there is a shortage of rental homes affordable and available to extremely low income households (ELI), whose incomes are at or below the poverty guideline or 30% of their area median income (AMI). Many of these households are severely cost burdened, spending more than half of their income on housing.

How many vacation rentals are on Maui? ›

Are there legally operated vacation rentals in Maui County? An estimated 16,000-plus TVRs may operate legally in the County, many in multi-unit buildings, along with several hundred single family units.

How many Hawaiians lost their homes? ›

Green said 3,700 homes were destroyed, and only a few houses survived the fires that rapidly spread Aug. 8. In the aftermath, Hawaii faces a unique issue in its response. The governor explained there were 561 impacted families that both owned and lived on their properties — everyone else was renting.

What is the supply and demand of vacation rental in Hawaii? ›

For the full year of 2023, Hawai'i vacation rental supply was 8.8 million unit nights (+17.2% vs. 2022, -14.5% vs. 2019) and demand was 4.9 million unit nights (-0.7% vs. 2022, -35.5% vs.

What would be the only downside to living in Hawaii? ›

The most obvious drawback to living in Hawaii is our cost of living. Because everything needs to be imported, the cost of goods is significantly higher than any mainland market.

How many people live permanently on Maui? ›

Maui County, HI is home to a population of 165k people, from which 91.9% are citizens. As of 2021, 17.8% of Maui County, HI residents were born outside of the country (29.4k people). In 2021, there were 1.03 times more White (Non-Hispanic) residents (48.8k people) in Maui County, HI than any other race or ethnicity.

What is the annual income in Maui? ›

Maui Salary in Hawaii
Annual SalaryHourly Wage
Top Earners$44,155$21
75th Percentile$40,500$19
25th Percentile$31,200$15

What is the cheapest month to stay in Maui? ›

If you're looking for the best deals on accommodations, spring and fall are the cheapest months to visit the island because demand is down. This means the island is less crowded as well, which is another benefit of visiting during these months. Our personal preference is April - May.

What happened to people in Lahaina? ›

On Maui, the historic town of Lahaina was destroyed, with 1,700 buildings burned. At least 55 people have been killed in the fires, but Gov. Josh Green has said the number of dead was likely to rise. In Hawaii over the past three decades, many sugar plantations, pineapple farms and ranches shuttered.

Does Maui have a homeless problem? ›

According to the 2023 federal point-in-time count, a total of 6,223 people experienced homelessness in the state of Hawaii. The majority, 4,028, were on Oahu, and 704 lived on Maui.

How many homes destroyed Lahaina? ›

In Lahaina, West Maui, more than 2,200 homes, apartment buildings and other structures were damaged or destroyed.

What is a good ROI on a vacation rental property? ›

Generally, a good ROI for rental property is considered to be around 8 to 12% or higher. However, many investors aim for even higher returns. It's important to remember that ROI isn't the only factor to consider while evaluating the profitability of a rental property investment.

How much income to expect on a vacation rental? ›

Average Annual Host Revenue By State (United States):2021/2020
6 more rows

Where is the best place to invest in Hawaii? ›

When it comes to investing in Honolulu, neighborhoods like Waikiki, Kailua, Ko Olina, Kahala, and Hawaii Kai are among the best due to their high tourist appeal, luxury properties, and strong rental markets. Emerging areas like Kailua Kona also offer promising growth potential for investors.

Why is poverty a problem in Hawaii? ›

Hawaii's poverty rate is high compared to the rest of the nation in large part because of the high cost of housing. Four in 10 low-income people in Hawaii are homeless or pay over half their income for rent.

Why is homelessness a big problem in Hawaii? ›

income & Land prices disparity. The price of housing in Hawaii is a large factor in why the homeless population is swelling. Hawaii's housing costs are extremely high and average incomes fail to meet criteria for rentals.

Why is affordable housing bad for the economy? ›

Economic impacts: The affordable housing crisis can have negative impacts on the state's economy, as it can make it difficult for businesses to attract and retain employees who cannot afford to live near their place of work.

Why is housing so expensive in Hawaii? ›

With low supply comes high demand- and even higher prices. A major factor that influences the housing market in Hawaii is the competition- especially for single-family homes in Honolulu, Pearl City, and Maui County.

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