Mayor Richard Bissen’s bold and controversial proposal to turn more than 7,000 short-term rentals into much needed long-term housing took a major step forward Tuesday night.

The Maui Planning Commission voted 5-0 in favor of recommending the County Council approve the legislation with some modifications following an all-day meeting filled with passionate testimony on both sides of the issue.

“Our community is screaming for this,” said commissioner Ashely Lindsey from Wailuku.

The approval came with recommendations for the council to consider the economic impacts of the proposal using a study by the University of Hawaii Economic Research Organization that is expected to be completed by the end of the year. It also recommended considering the social, cultural, environmental and quality of life impacts.

As proposed, 2,200 units located in apartment districts in West Maui would be phased out as short-term rentals by July 1, 2025 and the remaining units would be phased out by Jan. 1, 2026. The affected properties are known as the Minatoya list, with their use as vacation rentals having been grandfathered in under a 2001 legal opinion by a former county attorney.

The commission agreed on the quick phase-out in West Maui due to the displacement of about 13,000 people from the Aug. 8 wildfire in Lahaina. But it added an official comment for the council to note that the commission discussed making the phase-out timeline up to three years longer for the properties outside of West Maui.

The commission also made a recommendation to exclude the properties on the Minatoya List that are designated for hotel use under community plans and those properties that are already partially zoned hotel, which accounts for 931 units. This was to address the testimony from property owners who said their buildings were originally built as resorts intended for vacation rentals.

Planning Commission Vice Chair Dale Thompson, who has a family-owned property on the Minatoya list, did not participate in the meeting. And there were still three vacancies on the nine-member commission, including the South Maui seat where most of the affected units are located.

“I think we have all had sleepless nights about this,” Planning Commission Chair Kim Thayer said at the end of Tuesday’s nearly 12-hour meeting that was conducted in a hot room without air conditioning.

“I know we are not the final decision on this … and are purely making a recommendation to council,” she said. “But we are an important part of the process.”

Over two meetings a month apart, the commission heard nearly 17 hours of testimony from about 280 people, and reviewed hundreds of pages of written comments about Bissen’s proposal made on May 2. The council members will receive a more than 5,000-page packet with the transcripts of the meetings and written comments.

“This might be a record amount of testimony,” Thayer said when the last testifier spoke. “It was remarkable so many people came up to testify for the first time ever.”

She said zoning is not meant to be static, but to change with the needs of the community.

“We’ve been going on a certain trend, from purely subsistence to commercialization of our land. We’ve gone through plantation agriculture … to now tourism is our main industry,” Thayer said. “We are not unique in kind of being at a crossroads. … Now is our time to look at evolving.”

Thayer and the other commissioners acknowledged there will be negative impacts.  

The testifiers were fairly split between those who think the elimination of nearly half of the short-term rentals on Maui will create long-term housing and those who think that it will create an economic disaster — and not become the affordable housing that is the intended goal.

“This is taking out a wrecking ball,” Joshua Tremblay told the commission. “Is it right to create a devastating problem for someone else? The solution isn’t to create problems for someone else but to create housing.”

Those against the bill cited the loss of jobs, tax revenue, tourist spending and potential lawsuits. They said just charging a long-term renter their break-even cost would be unaffordable to most due to skyrocketing homeowner association fees and major maintenance costs that come with older buildings.

In the month since people testified at the first official opportunity to weigh in on the proposal, the issue has become even more divisive on Maui.

Steve Baker, the board president of the Realtors Association of Maui, resigned via a letter to members in which he said he and the organization’s staff had been threatened in relation to its stance against the proposed bill.

On social media, one post called owners of short-term rentals who did not rent long term as “terrorists who should be dealt with accordingly.” The post went on to say that “holding housing hostage is a threat to health and public safety.”

The testimony on Tuesday included remarks by some who called short-term rental owners evil and greedy and comments by some opponents of the proposal that were deemed insensitive by fire survivors.

When Justin Kekiwi, a supporter of the proposal, was testifying about the comments online “getting nasty,” economist Paul Brewbaker, who also was online in the virtual meeting, put up his middle finger.

Kekiwi said people who own and operate short-term rentals in the apartment districts should just sell their units.

“It is just sad. So those kind of people don’t belong here, and we don’t want you here,” he said. “Sell your units. Give them back to us. Give them back to the people.”

“They are being bullies,” Kekiwi added. “They’re trying to trick you guys with lawyers and fast action lawsuits. You guys have your own attorneys. … Don’t be scared.”

Several testifiers against the proposal cited Brewbaker’s 2021 white paper, which was revised in November 2022. It said the “hypothetical economic impacts” of eliminating 7,000 short-term rentals to Maui County would be the loss of 14,126 jobs, and annual reductions of $1.67 billion in tourism money, $747.7 million in employee earnings and $137.6 million in tax revenue.

Bissen addressed the divisiveness at the commission meeting.

“My deepest apologies to those who feel as if the purpose for this was to divide our community,” he said. “That was never the purpose.”

He said the negative reaction to the proposal, with some people feeling targeted, is also the reason it was not addressed in the past.

“It’s intended for the best of the greater good, but it will impact people individually,” Bissen said.

The mayor, in reaction to one testifier saying a survey showed only 6% of the owners of the 7,000 units would convert them to long-term rentals, said he would gladly take 500 units.

The Molokai Planning Commission has already recommended approval of the proposal. It noted that if the County Council doesn’t approved it for the rest of the county that it would like it approved just for Molokai.

The Lanai Planning Commission did not approve or deny the recommendation, but it added a variety of comments for the council to consider.

It’s not likely the County Council will take up the proposal until the end of the year, after it receives the UHERO report and another study that it budgeted $300,000 to do. The council is taking up the scope of work for a request for proposals for that study during a committee meeting Wednesday morning.

“This is not a decision that is taken lightly at all,” Thayer said. “There is, you know, emotion and heart and passion and lives. … This is going up to council and everybody will get to testify all over again.”

Civil Beat’s coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.