Maui’s New Law to Curb Vacation Rentals Balances Housing Needs with Tourism Industry Impact

Published on December 22, 2025

Last week, Maui County’s Mayor signed Bill 9 into law, a measure designed to phase out thousands of vacation rentals across the island. The bill, which had been approved by the county council earlier, is part of a larger effort to free up long-term housing for residents, particularly in the aftermath of the devastating Lahaina wildfires in August 2023.

The wildfires, which displaced hundreds of families and destroyed much of the historic town of Lahaina, have heightened the urgency of addressing the island’s ongoing housing shortage. Bill 9 is seen as a crucial step in tackling this issue by limiting the number of properties that can be rented out for short-term vacation stays. However, the plan has faced several challenges, as it also impacts the tourism industry, a key economic driver for Maui.

Maui’s Vacation Rental Crisis and the Need for Housing

Maui, one of Hawaii’s most popular tourist destinations, has long faced a housing crisis. With a population of around 160,000 residents, the island struggles to provide affordable housing for its locals, as a significant portion of its housing stock is dedicated to short-term vacation rentals. These properties, often rented out through platforms like Airbnb and Vrbo, have made it more difficult for residents to find long-term rental options or purchase homes, especially in high-demand areas like Lahaina, Kihei, and Wailea.

The impact of the Lahaina wildfires exacerbated the problem, as many residents lost their homes and are now competing for the limited housing available on the island. The local government’s plan to phase out vacation rentals in residential areas is intended to provide more housing options for these displaced residents, as well as help alleviate the overall housing shortage.

Bill 9: Aiming for Balance Between Housing and Tourism

Bill 9 calls for the reduction of vacation rentals on Maui by limiting the issuance of new short-term rental permits. The bill’s primary focus is on properties located outside of designated resort areas, which have historically been reserved for tourism. The hope is that by eliminating vacation rentals in residential neighborhoods, long-term housing will be freed up for local residents, especially those who have been impacted by the recent fires.

In addition to addressing the housing crisis, the bill seeks to curb the rapid growth of vacation rentals in neighborhoods that are not equipped to handle large numbers of transient visitors. Many residents have expressed concerns about the increasing number of vacation rentals in residential areas, citing noise, traffic, and a loss of community cohesion as some of the negative impacts. By regulating vacation rentals, the county hopes to strike a balance that preserves the integrity of Maui’s neighborhoods while still supporting the island’s critical tourism industry.

Tourism Industry Concerns

While the intent behind Bill 9 is to address the housing shortage, the measure has met with resistance from many within the tourism industry. Vacation rentals have become an integral part of the island’s tourism economy, offering visitors a unique and often more affordable alternative to traditional hotels. Many of these rentals are located in scenic areas, providing guests with an opportunity to experience the island in a more intimate way.

Industry stakeholders argue that reducing vacation rental options could have a significant impact on Maui’s tourism revenue, which is a critical source of income for the island’s economy. Tour operators, hospitality businesses, and property owners have raised concerns that limiting vacation rentals could drive tourists to other destinations, ultimately reducing the number of visitors to Maui. Additionally, some property owners fear that the new regulations could devalue their investments and lead to financial losses.

The Hawaii Tourism Authority has also expressed concerns about the potential fallout from the reduction in vacation rental availability, particularly as the state continues to recover from the impact of the COVID-19 pandemic on its tourism sector. However, some proponents of the bill argue that it will have minimal effect on the overall number of visitors, as tourists will still have access to a wide variety of lodging options, including traditional hotels, resorts, and timeshare properties.

Challenges in Implementing the Plan

As Maui moves forward with the implementation of Bill 9, there are several challenges to overcome. One of the primary concerns is how to enforce the new regulations and ensure compliance among property owners. The county is expected to face difficulties in monitoring vacation rentals, particularly those listed on platforms like Airbnb, where some property owners may try to bypass the new rules. There is also the challenge of managing the transition for property owners who depend on short-term rental income, as they may be faced with significant financial hardships.

Moreover, the bill’s focus on limiting vacation rentals in residential areas has raised questions about the impact on neighbourhoods that have already become accustomed to the presence of tourists. While some residents may welcome the reduction in short-term rentals, others may find that it affects the local economy, particularly in areas that rely heavily on tourist spending.

Looking Ahead: What’s Next for Maui’s Housing and Tourism Sectors?

Maui County’s decision to reduce vacation rentals is part of a broader effort to address the housing crisis in Hawaii, a challenge that has only intensified in the wake of the Lahaina wildfires. As the county continues to work through the logistics of implementing Bill 9, the key will be finding a balance between providing long-term housing for residents and preserving the island’s vital tourism industry.

In the coming months, the county will likely refine its approach, working with local stakeholders to develop strategies that mitigate the impact on both residents and tourists. While vacation rentals may be reduced, tourism will continue to be a cornerstone of Maui’s economy, and efforts will need to be made to ensure that the island remains a desirable destination for visitors.

As Maui navigates these complex issues, the focus will remain on building a sustainable future where both residents and tourists can thrive. The ultimate goal is to provide housing solutions for the community while maintaining the island’s reputation as a world-class travel destination.

Conclusion

Maui’s vacation rental reduction plan, embodied in Bill 9, aims to address the island’s housing shortage by reducing the number of short-term rentals in residential areas. While this measure seeks to prioritize long-term housing for residents, especially those affected by the Lahaina wildfires, it faces challenges related to enforcement and the impact on the tourism industry. As Maui works to balance these competing needs, the future of both its housing market and tourism sector remains a topic of significant discussion and concern.