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What is the Maui Short-Term Rental Phase-Out (Ordinance 5650)?
Maui's Short-Term Rental Phase-Out (Ordinance 5650) is a law designed to address Maui's housing crisis by converting short-term rental units (STRs) back into long-term residential housing. Originally known as Bill 9 and later passed as Bill 49, the ordinance specifically targets properties in apartment-zoned districts, often called the 'Minatoya list.' It revokes their legal non-conforming status, prohibiting rentals for periods shorter than 90 days.
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How it works
The ordinance functions by amending Maui County's zoning code. It sets a timeline for affected property owners to cease their transient vacation rental operations.
These owners must then either rent their properties to long-term tenants, occupy the units themselves, or sell them. The phase-out is implemented over a specific period to allow for a transition.
It is important to note that this law is targeted and does not impact all STRs on Maui, such as those located in designated hotel or tourist resort zones.
Why it matters
This ordinance is highly consequential for property owners, the tourism industry, and the local community. For affected owners, it represents a major shift in property use and a potential loss of significant rental income, forcing a transition to the long-term rental market.
For the community and government officials, it is viewed as a critical measure to alleviate a severe housing shortage and stabilize the cost of living for residents. The law is controversial, sparking debate between housing advocates and those in the vacation rental industry who are concerned about its economic impact and property rights.
See the official website for current details.
Examples
- A property management company specializing in vacation rentals in West Maui must pivot its business model after 60% of its managed units fall under the phase-out ordinance, forcing it to enter the long-term rental market.
- A real estate investor from the mainland decides against purchasing a condo in an apartment-zoned area of Maui after their agent explains that Ordinance 5650 would prohibit its use as a lucrative short-term rental, making the investment less attractive.
- An owner of a condo in a Kihei apartment district is notified that under Ordinance 5650, they must cease short-term operations by January 1, 2026, and can only offer leases of 90 days or more thereafter.
- Following the implementation of Ordinance 5650, a local teacher searching for housing finds an increase in available annual leases in Napili as former short-term rentals are converted to long-term housing stock.
Official resources and references
Frequently asked questions
Which specific properties does Ordinance 5650 affect?+
What is the primary objective of phasing out these short-term rentals?+
When does Ordinance 5650 take effect?+
Are there any exceptions for affected property owners?+
Related terms
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Long-Term Rental
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Maui Vacation Rental Association (MVRA)
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