Addressing Maui’s Housing Shortage

“You cannot be serious” encapsulates the sentiment of the majority of owners, business people, economists, employers and employees in Maui’s tourism industry. This, in response to Mayor Bissen’s ill-researched, half-baked proposed bill on May 2 to eliminate short-term usage of some 7000 apartments in Maui to address Maui’s housing crisis. The obvious solution to a housing shortage is to build more housing. Taking away housing stock from what is Maui’s primary industry, tourism, is not resolution to our housing crisis.

With almost immediate repercussions, the proposed bill has been painful on both sides of the debate. We are seeing a slowdown in tourism, and a devastating loss to businesses and employment. Restaurants and shops are closing in the wake of the consequences of the mayor’s disruptive targeting of Minatoya List apartments. (Please email me for a copy of the condos at threat on this list).

Even before a conclusion is reached, many owners of these short term vacation rentals have had enough and have decided to sell their units. This has created a sudden deluge of inventory in the condo market. The discussion to be had about opportunity in the market is, however, topic for another blog.

On June 25, the Maui Planning Commission held its first public meeting to hear testimony

Mayor Bissen stated “We recognize that this bill is only part of the solution, and as we move forward, our team will be open to feedback, and will explore strategic tax policy and zoning changes that support our objective.”

“We are looking forward to hearing testimony from our community and working with our Council to pass legislation that will prioritize the needs of our residents, protect the best interest of our County, and most importantly our community.”

Maui Now Reports

Brian Perry of Maui Now reported “The commission’s hearing drew overflow crowds into the Maui County Council Chamber on the eighth floor of the Kalana O Maui Building. The room has a capacity of 200, and before testimony began around 10:30 a.m., a representative of the Maui Fire Department said the room was over-capacity. He asked people who were standing in walkways and exits to leave the room. Outside, on the building’s front yard, chairs and a large-screen TV had been set up for people to watch the proceedings of the Maui Planning Commission.” Without question, this is a highly contested, emotional and damaging issue.

By the end of the day, testimony was about 4-to-1 who opposed the passing of the bill.

A follow up commission meeting inviting further debate and testimony is scheduled for July 9. Brian Perry continued in his June 25 article, “After testimony is completed, the commission will be able to deliberate and determine its recommendation on the bill to the Maui County Council. The commission has the options to recommend passage or denial of the bill as submitted, approval of an amended version or deferral for more study.

Those testifying in opposition predicted deep and profound economic impacts for Maui County

The vacation rental management company’s and their teams are immediately impacted. Financially this is devastating with business closures resulting in unemployment across the board impacting small business owners, maintenance people, housekeepers, account operators.

Both sides of the argument acknowledge the dire need for residential housing, especially in the wake of the August wildfires. However eliminating short-term rentals from apartment districts is neither practical nor financially viable for the County. Ironically, the Real Property Taxes procured from this property classification are the largest contributing group to housing in Maui.

Before grandstanding on May 2, the mayor should have done his homework.

Unfortunately putting the cart before the horse has started a fire of its own. Far reaching colossal financial damage to the people of Maui County has affected everyone. Today, we see another restaurant close, the beloved Ron Ponzo’s Ekolu in Kihei.

Those in support of the bill

The other side of the argument are the residents pushing for people over profits and local communities over the needs of visitors.

The reality of this scenario, converting Maui’s short term rentals into long term usage, is simply not a resolution at all. Many of these apartment buildings offer small units which are not suitable for housing families. The families displaced by the wildfires last August deserve a home, not a decades old one or two bedroom apartment with one parking space intended for short term use.

“Pray tell us: how’s that working out, so far?”

Paul Brewbaker, Ph.D., CBE of TZ Economics submitted his testimony in a 58-page report headed “YOU CANNOT BE SERIOUS.”  Of particular note Paul states:

“Here’s the question: how do 5 or 10 or 15 thousand additional Maui workers who lose their jobs in pursuit of performative anti-tourism denialism masquerading as “housing policy [sic]” pay their rent, if they don’t have a job? We’re all dying to hear how workers pay for the “new” housing that Maui will magically create by extinguishing their jobs and their businesses.”

For Paul Brewbaker’s insightful reporting of facts interposed with his inimitable style and much needed humor in the face of this challenge, click here,

https://drive.google.com/file/d/1QM0wDK70cZ5FKfTMIR1rP4RjJ5Yq9OmU/view

In short, “The solution to a housing shortage is to build housing.”