Quote from @Mark Waite:
Thanks for sharing Henry. I live full time on Maui and am a full time real estate broker so I'm very attuned to what is going on.
My recommendation for anyone is to educate yourself, whether its Hawaii or elsewhere, because if you are aware of how STRs are regulated in Hawaii, this is far easier said that done. Even the Attorney General has advised that passage would likely result on a lawsuit that would not be favorable to the state. The reason being that the State has allowed the four counties to regulate STRs, and why each county does it differently.
The argument behind this is very weak. The reason there is a housing shortage has nothing to do with STRs and everything to do with politics. I live on Maui, and every affordable housing project gets analyzed with a microscope. The time and regulatory oversight kills developers and why very few want to build affordable housing. Nearly 1/3 of every dollar spent for development goes to regulatory costs. Insane in a market where construction costs are already high
It is unfortunate to see articles such as the AP article because they simply show one side of the story, not the full story. Its articles such as these that are having a impact on an economy that is 80% driven by tourism. You should also be aware that the hotel industry carries a lot of clout. Don't believe me? Then ask why the property tax rates for hotels on Maui hasn't increased in over two years, yet they continue to raise it for STR's as well as non-owner occupied residential properties.
Please keep it all in perspective and do your homework. Not everything you read is completely factual.
Well said, my friend. STRs are a double edged sword, and while I understand the concern about affordable housing, it's actually the tax dollars from the STRs that fund the affordable housing communities on our island. Taking away STRs makes building affordable housing nearly impossible. Like you mentioned, 80% of our economy is based on tourism, so take a macroeconomic view on this, and all the subsidies we see in health care, construction, government jobs, low property taxes, etc. are all because they're being paid on the backs of tourists. Many builders have decided to pack up and leave the islands (like the Spencer 'Ohana) after spending decades building affordable homes. They can't do it anymore. The county doesn't want to work with them and the red tape is just too thick.
Sadly, I don't know what the solution is, but I can guarantee that if more STRs get shut down there will need to be an increase in taxes coming from somewhere. People don't want tourists? OK, now living here will be even more expensive. We typically have an operating budget of $600-$700m in the county of Maui. It's costing us a billion dollars just to move debris from Lahaina to Olowalu. If we move it again to another location, another billion. If it goes off island it's been estimated to cost upwards of $10b. Where is the money going to come from to make this happen? Tourism is already down 30% since last year on Maui, and down 13% across the state.
I actually think STRs and tourism in general is part of the solution for Hawaii residents. There's always going to be loud opposition to this, but I think if you want to secure the best future for locals, you're going to need the money that tourism brings in. Maybe the way its appropriated needs to be revisited, but where else are you going to find an industry that makes sense in the middle of the Pacific where we have so many limitations? Don't scare away tourists or limit them any more. We'll just be cutting off our own limbs. Maui will survive, but it may take a while to get back on track. STRs have always been and will always be the scapegoat that is easiest to prey upon, but they're not the root of the problem, in my opinion.
