{"id":199978,"date":"2024-06-28T08:19:46","date_gmt":"2024-06-28T18:19:46","guid":{"rendered":"https:\/\/www.hawaii.edu\/news\/?p=199978"},"modified":"2024-06-28T08:19:46","modified_gmt":"2024-06-28T18:19:46","slug":"vacation-rental-proposal-maui-county","status":"publish","type":"post","link":"https:\/\/www.hawaii.edu\/news\/2024\/06\/28\/vacation-rental-proposal-maui-county\/","title":{"rendered":"Vacation rental crackdown may lower condo prices in Maui County"},"content":{"rendered":"Reading time: <\/span> 2<\/span> minutes<\/span><\/span>

\"land<\/p>\n

Maui County officials are considering a proposal that could dramatically increase the county\u2019s long-term housing stock by restricting transient vacation rentals (TVR<\/abbr>). According to a new University of Â鶹´«Ã½<\/span> Economic Research Organization<\/a> (UHERO<\/abbr>) blog, if enacted, the policy could expand Maui’s long-term residential housing supply by 13%.<\/p>\n

The proposals outline several potential actions and outcomes that could make significant impacts on the housing supply and\/or county taxes are detailed below.<\/p>\n

Minatoya List<\/h2>\n

Condominium units operating as vacation rentals as of 1989 were permitted to continue renting in the short-term market, also known as the Minatoya List<\/a>. The list covers 7,167 units, however, some of these units are not currently operating as a vacation rental, as indicated in property tax filing information. UHERO<\/abbr> identified 6,172 units that are both operating as TVR<\/abbr>s and appear on the list. These 6,172 properties would be directly affected by the policy change, as they would be forced to cease operating as TVR<\/abbr>s.<\/p>\n

Maui County has a total stock of 63,000 housing units according to property tax records. Currently, 47,400 units are used for local housing, while 13,000 are used as TVR<\/abbr>s, and an additional 2,500 operate as time-share units. Moving 6,172 units from TVR<\/abbr>s to the long-term supply would expand the supply of long-term housing on Maui by 13%.<\/p>\n

Potential lowering of housing prices<\/h2>\n

Authors of the UHERO<\/abbr> blog, Justin Tyndall and Emi Kim, wrote that an expansion of housing supply would likely lead to lower prices and rents.<\/p>\n

“In months when the inventory of available condo units was below 1,000, annual price appreciation averaged 10%. In months where inventory exceeded 1,000 units, average appreciation was -9%,” according to the blog. “In April 2024, there were only 500 available condos on Maui. If even a small share of the Minatoya List units end up on the for-sale market, we would expect to see significant\u2014possibly double digit-declines in condominium prices on Maui.”<\/p>\n

Policy consequences<\/h2>\n

While housing may benefit, UHERO<\/abbr> said the shift could trigger a substantial loss of property tax revenue for the county and could negatively impact the recovery of tourism on Maui by lowering accommodation capacity.<\/p>\n

“These drawbacks could have significant consequences for Maui\u2019s local population in terms of reduced county services, higher taxes, or a weakening labor market,” Tyndall and Kim wrote. “While falling home prices are a benefit to those struggling to find housing, incumbent homeowners could lose equity if the price of homes fell county-wide, which could have broader economic impacts.”<\/p>\n

Possible alternative approach<\/h2>\n

Rather than banning Minatoya TVR<\/abbr>s, the blog suggests significantly increasing the property tax rate for TVR<\/abbr>s. A drastic increase in the rate could potentially increase county property tax receipts, and at the same time may incentivize some owners to sell their units or convert them to long-term rentals. Using the existing property tax system rather than banning Minatoya units might also encounter fewer legal barriers to implementation.<\/p>\n

Support for Lahaina families<\/h2>\n

The 6,172 units that would be added to the long-term supply of housing are a mix of small and mid-size condominium units. According to U.S. Census Bureau data, half of the households in Lahaina had a household size of two or fewer people, and two-thirds had three or fewer people. These families affected by the Lahaina wildfire could be accommodated by the Minatoya List properties.<\/p>\n

Read the entire blog on UHERO<\/abbr>\u2019s website<\/a>.<\/p>\n

UHERO<\/abbr> is housed in UH<\/abbr> M\u0101noa\u2019s College of Social Sciences<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

If enacted, the policy could expand Maui’s long-term residential housing supply by 13%<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[301,197,1467,1363,1597,1026,9,343],"class_list":["post-199978","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-research","tag-college-of-social-sciences","tag-economics","tag-manoa-excellence-in-research","tag-manoa-research","tag-maui-wildfires","tag-social-science","tag-uh-manoa","tag-uhero","entry","has-media"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t