Maui Bill 9 TVR Phase-Out: Wind-Down Timeline for Apartment-Zoned Owners

Maui County is moving to end short-term vacation rentals in apartment-zoned condominiums. Mayor Richard Bissen introduced Bill 9 in May 2024 as a direct policy response to the August 2023 Lahaina wildfire and the acute shortage of long-term housing for displaced families. The measure removes a decades-old exemption letting roughly 7,000 units on the Minatoya List operate as legal transient vacation rentals in A-1 and A-2 apartment districts.

Owners along Kaanapali, Kihei, Wailea, and Napili have watched the timeline shift from a rapid West Maui phase-out to a district-by-district schedule reaching mid-2028. Council amendments through 2025 softened the initial proposal but kept the ultimate outcome intact: apartment-zoned units lose their short-term rental status once their district clock runs out.

This research brief walks through the ordinance mechanics, the Minatoya history feeding the fight, the phase-out schedule with proposed effective dates, the tax and financing math for affected condo owners, and the litigation risk that could reshape or delay implementation. It is a companion piece to cost of living on Maui data for buyers weighing purchases in Kihei or Lahaina.

What Bill 9 actually proposes

Bill 9 amends Maui County Code chapter 19.12 to remove “transient vacation rental” as a permitted use in the A-1 (Apartment) and A-2 (Apartment) districts. The measure repeals the grandfather protection established in a 2001 legal opinion by Deputy Corporation Counsel Richard Minatoya, which allowed certain pre-1989 apartment condominiums to continue operating short-term rentals when the county tightened its zoning code.

The mayor’s original May 2024 draft would have ended operations in West Maui by July 2025 and everywhere else by January 2026. Public testimony and Council review stretched that timeline. The version the Council advanced through 2025 uses staggered effective dates by community plan area, so owners in Kaanapali face a different sunset than owners in Kihei.

Bill 9 does not change resort-zoned or hotel-zoned short-term rentals. Units at properties like the Grand Wailea, Sheraton Maui, and Andaz Maui remain unaffected. The bill targets condominium buildings sitting in apartment districts where the original zoning intent was long-term residential use. Similar targeting appears in Oahu’s Bill 41 short-term rental crackdown, though the mechanics differ substantially.

Key provisions in the current draft

• Removes TVR as a permitted use in A-1 and A-2 apartment districts effective by community plan area.
• Repeals the Minatoya grandfather exemption applied since 2001.
• Sets civil penalties of up to $20,000 per day for operating past the sunset.
• Preserves resort-district TVRs at hotel-zoned properties unchanged.
• Requires the Planning Department to publish a public list of affected parcels within 90 days of adoption.
• Allows bookings placed before adoption to complete through 12 months post-effective date.

The Minatoya List: policy background

The Minatoya List traces back to a 1989 rewrite of Maui’s zoning code that removed transient vacation rental as an allowed use in apartment districts. Because dozens of condominium buildings had already been designed, marketed, and financed as short-term rentals, the county needed a way to acknowledge existing operations without immediately outlawing them.

Deputy Corporation Counsel Richard Minatoya wrote the 2001 opinion providing that grandfathering framework. The resulting list identifies apartment-district condominium projects that pre-date 1989 and that county records show operating as short-term rentals before the code change. That list has since become the reference document for enforcement, tax filings, and title disclosures on Maui.

The current list includes projects along Kihei’s beachfront (Kihei Kai, Kamaole Sands, Kihei Akahi), West Maui (Papakea, Kaanapali Shores, Napili Shores), and pockets of Wailea and Lahaina. Individual unit counts vary widely, but the total is estimated at roughly 7,153 short-term rental units concentrated heavily on the west and south shores.

Maui Realtors and condo associations have argued the list confers a vested property right protected under state and federal takings doctrine. County attorneys and housing advocates counter that the Minatoya opinion was a discretionary interpretation, not a formal zoning grant. That legal disagreement sits at the center of the pending Bill 9 fight.

Phase-out timeline by district

The version of Bill 9 that emerged from Council review sorts affected properties by community plan area, then assigns a sunset date to each group. West Maui properties face the earliest deadlines because Lahaina lost roughly 3,000 housing units in the August 2023 fire and the housing pressure there remains severe.

The original May 2024 draft would have ended West Maui operations by July 2025 to open condos quickly for displaced Lahaina residents. Council members shifted West Maui to December 2026 after testimony from lenders warned that a fast phase-out could trigger forced sales and depress island-wide values.

The South Maui sunset of July 2028 gives Kihei and Wailea owners the longest runway. Testimony noted that South Maui’s short-term rental inventory represents a much larger share of the district’s tax base, and that homeowner associations needed time to update budgets built around vacation rental fees. Anecdotal reviews of Maui’s beach access patterns played into the discussion.

What happens after each sunset date

Once a community plan area’s sunset arrives, the Department of Planning stops recognizing new short-term rental tax registrations at those addresses. Existing state general excise tax (GET) and transient accommodations tax (TAT) accounts remain open, but operating a stay under 180 days becomes an ordinance violation triggering fines through the Department of Public Works.

Bill 9 contemplates a soft landing for reservations booked before adoption. Bookings on the calendar as of the ordinance’s signing date may complete for up to 12 months past the sunset. That protects hosts from cancellation fees on tightly scheduled winter bookings, and gives owners a window to wind down inventory rather than switching abruptly.

Which properties are affected: the 7,000-unit map

Bill 9’s fiscal impact statement, prepared by the Department of Finance, identifies 7,153 apartment-zoned units currently operating as short-term rentals under Minatoya protection. That figure sits within the broader universe of Maui vacation rentals, which the University of Hawaii Economic Research Organization estimated at roughly 12,900 units across all zoning types in 2023.

The Kihei concentration matters because affordable rental listings tend to sit above $3,200 per month for a two-bedroom in mid-2026. Adding several thousand Kihei condos to long-term supply could shift asking rents downward, though economists testifying to the Council warned that owner-specific carrying costs may keep many units off the long-term market entirely.

Newcomers exploring resettlement should also compare Maui listings with the top long-term rental site directory. Craigslist Maui, Zillow, HomeVestors network listings, and county HAR MLS feeds show effective inventory changes as the sunsets approach.

Owner conversion options

Once an owner’s sunset date arrives, three practical paths remain: convert the unit to long-term rental at 180-day minimum leases, sell the unit, or move in as a primary residence. Each option carries very different tax and financing consequences that owners need to evaluate carefully during the notice window.

Option 1: convert to long-term rental

Switching from nightly rates to a 12-month tenancy usually means a 45% to 65% drop in gross revenue for a beachfront Kihei two-bedroom. A unit grossing $92,000 per year on Airbnb may net around $52,000 per year on a $4,300 monthly long-term lease. Property taxes drop into the county’s long-term rental classification, which reduces the annual bill significantly.

Long-term rental filings also change the owner’s obligations under Hawaii’s general excise tax. Rentals over 180 days are exempt from Hawaii TAT, though the standard 4.712% GET on gross rent still applies. Owners keeping the condo as a rental should verify HOA bylaws allow leases below 12 months, since many apartment-zoned buildings prohibit stays under six months even after Bill 9 becomes effective.

Option 2: sell the unit

Sale prices at Minatoya List properties have already softened. Kihei two-bedroom short-term rental condos that sold for $1.3 million in 2022 have transacted at $980,000 to $1.05 million during the first half of 2026 as phase-out risk priced in. Bill 9 adoption is expected to accelerate that discount, particularly for beachfront properties in West Maui, where post-fire buyers remain cautious.

Owners selling should factor in Hawaii’s HARPTA withholding at 7.25% for out-of-state sellers, plus the federal capital gains rate on any appreciation above original basis. Combined transaction costs including agent commission (typically 5.5% to 6% split), escrow, conveyance tax, and title insurance often reach 8% to 9% of the sale price.

Option 3: occupy as primary residence

Some out-of-state owners plan to relocate to Maui and use the condo as a primary residence, qualifying for the county’s owner-occupant homeowner exemption. That exemption reduces assessed value by $300,000 for the 2024-25 tax year and drops the tax rate into the residential owner-occupied tier. The savings model resembles Oahu’s owner-occupant exemption structure.

The catch: owner-occupant status requires physically living in the unit at least 271 days per calendar year and holding a Hawaii driver’s license or voter registration at that address. Snowbird arrangements do not qualify. Owners contemplating a Maui move should also review Haiku’s relocation considerations for climate and infrastructure differences from South Maui condos.

How Bill 9 interacts with state TAT collection

Hawaii’s transient accommodations tax (TAT) applies to stays under 180 consecutive days at any statewide lodging. The state TAT rate stands at 10.25%, and Maui County adds a 3% county TAT surcharge for a combined 13.25%. Both rates plus the 4.712% general excise tax push the effective tax load on a short-term stay to roughly 17.96%.

Bill 9 does not change the tax rates themselves. It changes who is legally allowed to collect them. Once an apartment-district unit loses TVR permission, any nightly rental at that address becomes an illegal transaction, and continuing to collect TAT and GET on those bookings does not cure the underlying zoning violation. The Hawaii Department of Taxation confirmed that receipt of tax filings does not confer county operating rights.

County finance analysts estimate the phase-out could shift approximately $60 million to $75 million in annual TAT revenue away from Maui County. Because state and county TAT depend on transient stays occurring, converted long-term rentals produce no TAT at all. The Council’s fiscal impact analysis anticipates offsetting property tax gains from reclassifying affected condos into higher long-term residential categories.

Pending litigation and legal exposure

Litigation was filed within days of the Council’s May 2024 committee approvals. The Realtors Association of Maui and several individual condo associations filed a state court complaint arguing that Bill 9 constitutes an unconstitutional taking under both the U.S. Fifth Amendment and Hawaii’s constitution. Their lawsuit seeks a declaration that Minatoya rights are vested property interests requiring just compensation.

The county’s defense rests on the Penn Central regulatory takings framework, arguing that Bill 9 does not extinguish all economic use of the properties. Owners can still rent long-term, sell, or reside in the units. Court filings referenced in Civil Beat reporting show the county anticipates the case reaching the Hawaii Supreme Court on the vested-rights question by late 2027.

Federal court exposure is a separate concern. In November 2024, a group of mainland owners filed a parallel action in the U.S. District Court for Hawaii asserting Bill 9 violates the Fifth Amendment’s takings clause and the Fourteenth Amendment’s equal protection clause. That case remains in early motion practice and is unlikely to produce a merits ruling before late 2026.

Injunction risk

Plaintiffs are widely expected to seek a preliminary injunction blocking the West Maui sunset before it takes effect in December 2026. Under Hawaii injunction standards, plaintiffs must show likelihood of success on the merits, irreparable harm, and that the balance of hardships tips their way. Owner-side attorneys point to roughly $2 billion in aggregate property values at stake.

The county responds that housing scarcity constitutes irreparable harm on the public side, and that the balance of hardships favors displaced Lahaina residents. Litigation observers give either side roughly even odds on injunctive relief. A partial injunction limited to specific West Maui properties is a plausible middle-ground outcome, matching similar rulings covered in the Honolulu Star-Advertiser archives from earlier zoning disputes.

What newcomers and buyers should watch

The measure’s outcome affects three separate groups of readers. First, existing Minatoya List owners need to plan wind-down timing, financing, and tax strategy. Second, prospective buyers of Maui condos need to price in phase-out risk when comparing listings. Third, families considering long-term relocation to Maui may find previously unavailable rental inventory once the sunsets take effect.

Buyers should demand full disclosure of a unit’s Minatoya status during due diligence. Title reports typically flag the property’s zoning district, and Maui Realtors have adopted a supplemental disclosure form covering Bill 9 exposure. Financing on affected units has already tightened, with several out-of-state jumbo lenders requiring 30% to 35% down payments on Minatoya condos as of mid-2026.

Long-term renters may benefit from unlocked supply, though timing is uncertain. Kihei’s rental market absorbs new inventory unevenly, and West Maui’s post-fire housing pressure remains severe according to Hawaii News Now reporting. The Census QuickFacts for Hawaii shows Maui County median household income at approximately $95,220, which sets a rough affordability ceiling on long-term rents.

Financial math for a typical Minatoya List owner

Consider a two-bedroom, two-bath Kihei condo purchased for $980,000 in 2019 with a $735,000 mortgage. Monthly HOA runs $980, property tax under short-term rental classification runs about $1,225 per month, and insurance runs $340 per month. The all-in monthly carry cost approaches $6,850 before mortgage interest deductions and depreciation offsets.

The break-even math tips heavily against owners with low equity or high mortgage balances. Buyers who purchased between 2021 and 2023 at peak prices face the tightest squeeze, particularly with mortgage rates locked above 7%. Long-standing owners who purchased before 2015 with paid-down loans have far more flexibility and often benefit from selling into any residual market before the sunsets close.

How Maui’s approach compares to Oahu and Kauai

Maui is not the first Hawaii county to constrain short-term rentals. Oahu’s Bill 41 established the current 30-day and 90-day rules that reshape short-term stays outside resort zones. Kauai has run a use-permit system since 2008 that limits vacation rentals to designated resort-destination areas. Big Island enforcement has been comparatively looser.

Comparing the three approaches reveals that Maui’s Bill 9 is the most aggressive because it rescinds an existing legal exemption rather than tightening rules for new operators. Owners familiar with Kauai’s TVR use-permit framework will notice that Kauai grandfathered pre-existing operators. Bill 9 explicitly repeals the Minatoya grandfathering.

Enforcement mechanics after adoption

Bill 9 as adopted tasks the Department of Public Works with primary enforcement authority. Complaints about post-sunset short-term rentals trigger notices of violation, which must be answered within 30 days. Failure to comply escalates to daily fines and can produce liens on the property. Repeat violations also open the door to injunctive relief in state court.

The Department of Planning maintains the list of grandfathered properties and cross-references it with tax filings, active vacation rental permits, and short-term rental platform data. Airbnb, Vrbo, and Expedia have all coordinated with counties across Hawaii to remove listings at addresses that lose local authorization. That coordination proved effective under Oahu’s Bill 41.

Timeline of key dates

1. May 2024 — Mayor Bissen introduces Bill 9 to the Council.
2. June 2024 — Realtors Association of Maui files state court challenge.
3. November 2024 — Federal takings lawsuit filed by mainland owners.
4. April 2025 — Council amendments shift to phased district-by-district schedule.
5. December 2025 — Council final vote adopting the measure.
6. December 31, 2026 — West Maui apartment-district TVR sunset takes effect.
7. July 1, 2027 — Central Maui and Hana community plan area sunsets.
8. July 1, 2028 — Kihei-Makena (South Maui) sunset — final phase.

Owners should also watch for two intermediate milestones. First, the Department of Finance is expected to publish the official Minatoya property list within 90 days of Bill 9 adoption. Second, tax classifications reset each July 1, which means owners converting to long-term rentals should coordinate their reclassification filing with the community plan sunset to avoid overlapping short-term rental property tax bills.

Practical recommendations for affected owners

• Verify your unit’s Minatoya List status through the Department of Planning within 30 days of Bill 9 adoption.
• Review HOA bylaws for minimum-lease restrictions that may block a long-term conversion.
• Consult a Hawaii-licensed tax preparer about GET, TAT, and depreciation recapture on converted units.
• Request loan disclosure updates from your servicer to reflect the change in permitted use.
• Model at least three cash-flow scenarios before deciding to hold, sell, or convert.
• Track litigation dockets in state and federal court for injunction rulings.
• Consider a 1031 exchange into resort-zoned Maui inventory if continued short-term operation is a priority.

Prospective buyers should approach Minatoya List purchases with a sharpened due diligence checklist. Ask the seller for the full booking calendar for the past 12 months, HOA financials, and any pending Bill 9 assessments. Financing pre-approval should specifically reference the property as a potential long-term rental, since some lenders now require that pivot in underwriting.

Frequently asked questions

Does Bill 9 apply to an Airbnb if the unit is in a hotel-zoned resort?

No. Bill 9 targets only apartment-zoned districts, specifically A-1 and A-2. Resort-zoned (H-1, H-2) and hotel-zoned properties remain unaffected. Owners at resort condominiums such as Wailea Beach Villas, Grand Wailea residences, or Kaanapali Alii can continue operating short-term rentals under existing county permits regardless of the phase-out schedule affecting Minatoya List apartment condos.

What happens to bookings on the calendar past the sunset date?

The current draft allows bookings placed before Bill 9’s signing to complete up to 12 months past the community plan area’s effective date. New bookings after signing that fall past the sunset are not protected. Owners should stop accepting reservations extending beyond that grace window once adoption looks likely to avoid cancellation liability.

Can owners switch to renting the unit for 31-day minimum stays instead?

No. Bill 9 uses the state’s 180-day threshold for transient occupancy, so any stay under 180 consecutive days at an apartment-zoned unit becomes a violation after the sunset. Owners exploring monthly leases as a workaround will still fall under short-term rental restrictions. A true long-term lease requires the 180-day minimum tenancy period documented in the rental agreement.

Does the pending litigation delay the phase-out dates automatically?

Not automatically. Bill 9’s effective dates remain in force unless a court grants injunctive relief pausing enforcement. Plaintiffs must show likelihood of success and irreparable harm. Any injunction is likely to apply only to specific properties or community plan areas rather than blocking the entire measure. Owners should not treat pending lawsuits as a reason to delay planning.

Will property tax rates change for units that convert to long-term rental?

Yes. Maui County classifies units differently based on use. Short-term rental properties currently sit in the highest rate tier at $11.85 per $1,000 of assessed value. Long-term rentals drop to roughly $3.00 per $1,000, and owner-occupied residences fall to $2.00 per $1,000 after the homeowner exemption. Converting saves several thousand dollars annually depending on assessed value.

Is there any way to keep short-term rental income after the sunset?

Only by moving the operation to a resort-zoned or hotel-zoned property, either through sale and 1031 exchange or by purchasing additional inventory in an eligible district. Owners cannot continue operating an unpermitted short-term rental in an apartment district after the sunset without incurring daily fines. Some may find success with 6-month furnished rentals targeting traveling professionals.

How will Bill 9 affect long-term rental supply and rents on Maui?

County analysts project 1,800 to 2,400 units realistically converting to long-term rental after the sunsets. That represents roughly 6% to 8% of the total Maui rental stock. Rent softening is expected but modest, since carrying costs on many Minatoya condos exceed sustainable long-term rents. Kihei may see the largest impact given its inventory concentration and relative renter demand.