Legal Vacation Rentals Are Crucial to Maui’s Vitality as a Whole
Legal vacation rental properties are vital to Maui. They provide many jobs for local people, are the single largest property tax contributor to Maui County, help to fund our affordable housing fund, and are a leader in sustainable tourism.
The industry as a whole has been completely ostracized by our local media and many others with an utter neglect for factual and complete information. My goal in writing this post is to illuminate the facts about this industry and the positive impacts that it provides. With this, this is not to minimize the negative effects of tourism which I acknowledge are very real and because I was born and raised here on Maui, I care greatly about. While sharing this information, I also want to acknowledge my own personal bias: I own two legal short-term vacation rental properties (both are zoned hotel but are fee simple resort condos), I represent many buyers and sellers of these properties in my real estate practice, and my team runs a short term vacation rental operation business. I have chosen to invest in these assets to help build wealth for my family and I am proud of what we offer as a service as it assists our clients with doing the same and is also an extremely vital component of our local economy here on Maui.
The properties that we reference here classified as Short-Term Rentals are comprised of legal vacation rental condos zoned both Hotel and Apartment (codified allowed use by Maui County), permitted residential home short-term rentals, and Bed & Breakfast residential short-term rental properties.
Legal Vacation Rentals – Largest Contributor to the Maui County Affordable Housing Fund (AHF).
They raised $12.1 Million for the fund in the current fiscal year. For perspective, Hotel/Resort raised $3.3 Million for the AHF in the current fiscal year. Vacation Rentals have contributed a total of $31.5 Million in the last 5 years. That is more than the resort, timeshare, homeowners and second homes all combined. Legal Vacation Rentals are by far the leader in funding affordable housing projects on Maui.
I personally, as well as many of my colleagues, have helped work to help build homes for Habitat for Humanity and other entities where funds like these are absolutely imperative to fund building this housing.
#1 Contributor of Property Tax in Maui County
From a property tax standpoint, legal vacation rentals generate the most property tax revenue as a whole, which is the County’s primary source of operating its $1B+ budget.
Contrary to wide publication, The Honua Kai Resort and Spa not the Grand Wailea Hotel, is the County of Maui’s largest one property generator for Real Property Tax Revenue. In fact, the Grand Wailea is not even the second leading producer- that distinction is currently held by the Kaanapali Ali’i Resort.
We are currently representing 37 properties in our program at this time and if we took an average of our assessed value at $1.5M per unit, the properties that we manage are generating over $650K in annual Maui County Property tax revenue.
Local Ownership and Operation
Many of these legal vacation rentals are owned by Maui residents to help them build personal wealth as well short-term income to help offset the extremely high cost of living on Maui county. Real estate is the strongest historical financial vehicle for families to improve their overall well being. The vast majority of the management companies that operate these rentals are locally owned and thus the revenue generated stays on Maui and is infused into the local economy. Our team gives back substantially to many local entities including but not limited to: the Hawaiian Island Land Trust, the Maui Food Bank, Ke Hale o Ke Ola Homeless Resource Centers, and the Hawaii Life Charitable Fund.
I would venture to estimate that the General Excise Tax, State of Hawaii Transient Accommodations Tax, and Maui County Transient Accommodations Tax revenue generated by legal vacation rental properties generates hundreds of millions of dollars for the State and County. These taxes amount to roughly 17% of gross income to the various entities and using this calculation our Stice Team Vacations program alone is generating over $1M per year in these specific tax funds.
The Rainbow House in Kaanapali Coffee Farms (above), which is the neighborhood that we live in, is the only legally permitted short-term vacation rental home in our community. The owners of the property had to undergo a rigorous process to have this permit granted in the first place and have ongoing stipulations in which they need to follow. There have been other STR homes as well as B&B properties that have applied for permits in our neighborhood, but due to strong direct neighbor opposition, these permits were not granted. This is why it is very important to understand that the immediate local community does have a strong input on said matters.
Strict Rules and Regulations for Legal TVRs
There are already very strict rules and regulations related to the Vacation Rental Industry here on Maui that have been in place since 1989. The Maui Vacation Rental Association (which I serve on the board) MVRA.net is an adamant supporter of Legal Vacation Rentals that have gone through the vetting process and doesn’t tolerate any illegal vacation rental activity. In fact, the County of Maui has worked very hard on its enforcement and enforcement tools. Zoning and Enforcement division reports quarterly with numbers. For the last year, they have remained under 30 complaints.
Creating Thousands of Local Jobs
Legal vacation rentals create thousands of high-quality jobs on Maui through the various vendors that are employed: contractors, electricians, AC technicians, plumbers, cleaners, security companies, painters, etc. You very likely know at least one, if not many, individuals who regularly work in a legal vacation rental property.
Like myself, both of our children were born here in Maui. Nothing would make me happier than teaching our children about the right way to operate this business in hopes that they will someday chose to take it over if they decide that is right for them.
Vacation Rentals Increasing Residential Real Estate Values – Hard Case to Make Accurately
Short-term vacation rental condos and residential condos are completely different in terms of their operational structures and there is really no correlation between the values of them. Maui housing prices are high because of a lack of supply and very strong demand. Who wouldn’t want to live in Maui? The real question is, who can afford to live here?
It is my personal opinion, which is shared by many long-term residents, that our biggest issue facing affordable housing here is due to the County itself. Its various departments create a very inefficient, laborious, and expensive system to construct new housing. It is estimated that Maui County needs roughly 15,000 new affordable residential dwellings to fit the needs of our current local population. Nothing would please me more to see these homes developed in a well-thought-out and high-quality manner.
It is my opinion that sales of short-term rental properties directly have a direct correlation on the sales prices of other short-term rental properties, not residential homes or condos.
Vacation Rental Permits are Non-Transferable
STR and B&B permits are not transferable through a property sale which negates the contention that these properties are being sold as investment commodities and driving up overall price levels. What’s more, you must own your property for 15 years minimum before applying for a permit for STR and 5 years minimum for B&B.
Strong Supporter of Sustainable Tourism
The MVRA is a strong supporter of responsible, sustainable and regenerative tourism. We have a strong emphasis on prioritizing visitor awareness and respect for the land, our people, our forests, and oceans. Reef safe mineral sunscreen, minimizing single-use plastic, supporting county resolutions like Malama Maui County and Rise Above Plastics.
At the very top of our in-residence guest placards, we share: Adopt the Hawaiian culture of respect (kuleana). Respect the beautiful landscape, ocean, and land. Respect the people you encounter, the wildlife, and the property.
Providing Varied Accommodations for Travelers
The legitimate vacation rental industry on Maui provides accommodations for interisland, domestic, and international travelers. Enjoyment while staying at a different type of property other than hotel rooms, while supporting community-based hospitality with dollars generated staying in the community. For those of you who travel, I am thinking that you probably enjoy having a variety of different options to enjoy time with your loved ones — the same applies here.
Mahalo for Your Consideration
Mahalo for taking the time to read my article here. While sharing the positive aspects about legal vacation rentals here in Maui, I realize that the system is far from perfect and constant input and improvement is imperative. I invite to share your thoughts below in a constructive and polite manner.
Work with a True Vacation Rental Specialist
- Licensed since 2006 at age 23; Third Generation Realtor
- Top Selling Broker in the Entire State of Hawaii age 40 or under.
- $70M Sold in last two years and a very consistent track record of vacation rental condo sales.
- Born and raised on Maui; Seabury Hall and Babson College educated.
- Honua Kai and Kaanapali Shores Homeowner Investor and Ka’anapali Coffee Farm property owner.
- Facts. Analysis. Performance.
- Expert negotiator and astute contractual knowledge.
- Comprehensive pricing Analysis- more valuable/insightful than an Appraisal.
- Complimentary In-house design and staging services by Laura Lancaster of WIBU Interior Designs.
- Commitment to stellar “white glove“ services.
- Driven, Knowledgeable, assertive, determined, and fun to work with.
- Solution-oriented and able to navigate very challenging issues.
- Listens well and has strong communication skills.
- Introduced and established Hawaii Life Real Estate Brokers, Hawaii’s Top Real Estate Firm to Maui in 2009.
My wife and I have owned an investment property at Honua Kai since 2014, we just purchased our second at Kaanapali Shores in 2023, I have represented countless buyers and sellers on Vacation Rental Properties in Hawaii, and we operate a top-performing vacation rental program operating within numerous resorts in Maui.
Jeremy Stice R(B) at Your Service
As the director of Hawaii Life’s West Maui Vacation Rental portfolio and one of Hawaii Life’s top-selling Brokers, my team and I are here at your service. I was born and raised here in Maui, am a third-generation Realtor, and my wife and I have called West Maui home since 2010-we enjoy sharing our passion for it with all who are interested. I make a commitment to pick up my cell phone as best as I can, return voicemails, text messages, and email in a timely fashion. I also work 7 days a week so feel free to call me anytime you need me. I am here at your service, I look forward to sharing my passion and expertise with you. Want to follow my blog via email updates? Please enter it below. This will not be used for any other reason than automatic blog updates that I post. Subscribe to the Jeremy Stice Blog Roll Here.
You might also be interested in these past articles:
- Maui Island Wide Vacations offered by The Stice Team of Hawaii Life Vacations
- The Hawaii Life Stice Team: Committed to Meeting and Exceeding your Maui Vacation Rental Needs
- New Hoolei Luxury Vacation Rental Offering in Wailea Maui
- Important Updates for Property Insurance for Vacation Rental Condos in Hawaii
- Properly Transition a Hawaii Vacation Rental Property During a Purchase Part 2
- Properly Transition a Hawaii Vacation Rental Property During a Purchase Part 1
- Maui 1031 Exchange Golf Course Living Kapalua Golf Villas to Beachfront Mahana at Kaanapali
- Maui Vacation Rentals Outpacing General Maui Market & Becoming More Valuable
- Key Amenities of a Succesful Hawaii Vacation Rental Property
- Sapphires to Diamonds – Ranking Maui’s Top Luxury Vacation Rental Properties
- New Hawaii Vacation Rental Loan Program with 20% Down Payment
- 3 Ways to rent and optimize your Hawaii Vacation Rental Property
- How to properly prepare for owning a Hawaii Vacation Rental Property
- 5 Ways to Protect your Hawaii Vacation Rental Investment Property
- Invest in a Hawaii Vacation Rental Property with as Little as 20% Down
- Maui County Publishes Maui County Short-Term Vacation Rental List
- Purchasing a Maui Vacation Rental? 3 Reasons to Call Us First!
- Maui Realtor Interviewing for Your Services Today
- Earn a Part Job in Hawaii by Purchasing a Vacation Rental Property
- Toolkit For Purchasing a Hawaii Vacation Rental Property
- How Technology Facilitates Maui Property Sales via the Internet
- Invest in Maui Property via an Internet Purchase with Jeremy Stice & Hawaii Life