Important Things You Need to Know About Vacation Rental Properties on Maui


March 10, 2020

Aloha! ?

I know many of you who receive my Monthly Newsletter either own a short-term (vacation) rental unit on Maui or aspire to own one in the future. As a reminder, and as defined by the County of Maui, short-term rentals are any time period less than six months. You may or may not have heard rumblings about legislation that is just now in the “discussion” stage that could change the landscape of vacation rentals on Maui in the foreseeable months for the foreseeable future.

At this time, let’s refer to them as the 800 pound gorilla(s) in the room. I use the plural because there are two separate discussions; one directed at short-term rental single-family homes and the other, much bigger issue, directed at vacation rentals of all types including condos.

Let me start with the meeting that was held this past Friday, March 6, in the County Council (legislative body) chambers. It was expected that Council members would seek testimony from the public regarding a discussion to phase out permits for single-family home vacation rentals by not renewing them (the last will expire in 2024) when they come due. Such was not the case. The meeting was more than well attended and became heated at times. At last count, there are only 229 such homes currently permitted on the entire island. A bit hard to imagine how big a problem it can really be.

 

 

A lovely vacation rental home in Wailea

Opponents, of course, of short-term rental homes (STRH) express concerns of negligent owners, late night parties, cars blocking driveways, late night parties—oh, did I already say that…? Point is, I’ve lived here for nearly 25 years and I can tell you late night parties on Maui are about as rare as a good snowfall.

County Council was very clear, though, that this is merely a discussion at this time and no bill has been drafted.

Like any complicated topic, though, there are pros and cons to support both sides. Of bigger concern is an attempt, once again, to re-classify apartment-zoned condos (in other words, not hotel zoned) that were nonetheless built to be resorts back in the 70’s and 80’s and have been used as short term rentals since their inception.

I say “once again” because every ten years or so, depending on the make-up of the County Council at a given time and their particular slant on the subject it comes up like a “bad penny”. In the past, the Realtors Association of Maui (RAM) has flexed its muscles and political clout and the whole thing fades off into the sunset for another period of years.

But it is by no means a small matter. Approximately 8,000 condo units currently operated as STR’s and zoned Apartment could be affected. Without getting into too much detail here is the basic narrative:

In the 1980’s when the Japanese economy was booming, buyers from Japan were scooping up condos and even building new ones in an effort to get into what they thought was a lucrative vacation rental market on Maui. In a very short-time, long-term rentals were virtually extinct and a housing shortage was the immediate result. So in 1989, the County Council initiated a law that would disallow all but properties that were zoned Hotel from being rented short-term.

Due to some conflicting language in the existing code the law was not passed, but two years later in 1991 the Council did pass an ordinance restricting short-term rentals for all properties built after 1991 that were not zoned “Hotel”. For about 10 years after that ordinance was passed it was largely ignored.

Then a new administration came along and basically buckled to the pressure being applied by the non-vacation rental owners who wanted the ordinance enforced. Richard Minatoya, Deputy Corporation Counsel, then wrote an opinion that negated the 1991 County Council ordinance and basically “grandfathered in” units built before March 4, 1991 and have allowed those owners to continue short-term rentals since that time. Thus we now operate under the auspices of the Minatoya Opinion. And this is what once again may be challenged.

Meanwhile, the Realtor’s Association continues to work with the County to codify the Minatoya Opinion to protect against future challenges.

Click here to read the Minatoya Opinion letter and List of Properties that could be impacted.

With both of these “discussions” the likelihood of a bill being even drafted is extremely slim. Passage of such bills would reduce the tax base by many millions of dollars. Jobs related to the Visitor Industry would cease to exist. The County would be virtually bankrupt.

If you have questions or concerns about any of this, give me a call.

Moving right along, I will be featuring two properties every month going forward that I think are unique and/or special in their own right—one under $1 million and one over. As you may recall, I’ve been experimenting with different formats over the last few months and I hope you like this latest version.


Under $1,000,000


MLS #385096—This little south Maui condo is unique for a couple of reasons. First, the location—right across the street from the iconic Mana Kai with it’s fabulous grassy lawn beachfront, great restaurant and arguably Maui’s best Happy Hour, that you can partake of after enjoying an afternoon on one of Maui’s longest stretches of sandy beach. Secondly, the complex itself is a bit of a hidden treasure—quiet, private, with a ‘homey” feel you won’t get from the big condo buildings. Kind of a “know your neighbor” thing, you might say. A November 2019 remodel has given this unit a fresh, crisp new look that comes fully equipped with all you and your guests will need for a fab Maui vacation. Recently reduced to $633,000!!!

Over $1,000,000


MLS #385414—The “A” building at Makena Surf was one of the two buildings last built when the property was developed. Whereas all the other buildings were completed in 1985 using wood frame construction, the “A” and “C” buildings (1992) are concrete and offer larger floor plans than the original five. Makena Surf is one of the few properties that sits right out on the sand in south Maui with totally unobstructed access and views of the ocean. Some would consider the fact that all buildings are 3-stories high and do not include elevators as a drawback, but this ground floor unit does not present that problem. Wiggle those toes in the sand! Functional now, but with your personal touches could become a real gem! $2,488,800!!!

For more selections please visit my website at www.MauiRealtyAssociates.com and use my customizable property search option.

Click here for complete February statistics.

And my new feature, click here for Kathy Rosales’ Monthly Financial report.


 

 

DIANA ROSS IS COMING! DIANA ROSS IS COMING!

Maui does it again! Another top tier entertainer will be gracing the island for two fabulous Mother’s Day shows on May 10 and 11 at the fabulous outdoor Yokouchi Pavilion at the Maui Arts and Cultural Center. The weather is rumored to be pretty fantastic in early May on Maui so an amazing evening under the stars is virtually guaranteed.

Book your trip now, and plan to pick up a couple of condos for your portfolio while you’re here!

As I mentioned last month, a whole new look and Marketing Campaign is in the works as we speak. I am chomping at the bit to roll it out, including a facelift to my website, but these things do take time. In the meantime, stay well and keep warm if you’re in the cold country–and keep Maui Dreamin’! Realtors—you know the drill; I love writing those Referral checks!

Mahalo Nui Loa!

Michael Blaz
Broker/Owner
Maui Realty Associates
(808) 283-9093 cell
(808) 879-5510 fax
Michael@MauiRealtyAssociates.com
www.MauiRealtyAssociates.com

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