One of the major issues facing Maui real estate today is the topic of Transient Vacation Rentals in areas not zoned for hotels or apartments. Here are our thoughts:

In the past, while operating a vacation rental outside hotel zoned areas was illegal, Maui County actively and publicly chose not to enforce the statute. As a result homebuyers in areas including Haiku, Maui Meadows and along the Maui oceanfront factored into their decision making the likelihood of renting their properties. This had two major impacts. First, it promoted tourism in that it created an alternative for those visitors who prefer to avoid resorts, timeshares and crowds. The success of these TVR's clearly demonstrate there is a significant desire for these operations among tourists. Second, this rental capacity almost certainly helped drive property values higher than they would otherwise have been.  There seemed to be little complaining from neighbors about these operations.

Recently, the Maui County Council and the Mayor have decided to enforce the on the books laws regarding TVR's. What has the impact of this been? It has, without question negatively impacted tourism and part of the quiet on the island today can be attributed to this political choice. This in turn has caused layoffs in tourism related businesses, higher unemployment and will cause a decrease in tax revenue. The other major impact has been the need of certain owners to now sell in a distressed manner and therefore a decline in real estate values. Now this may well be the plan of the current administration. If so it is working. We have declining real estate values, fewer tourists, fewer jobs, less overall economic activity and less variety on our island.

It is clear the current enforcement has been a disaster for the island. So what is the answer? Check back in a few days for our proposal.