The Law That Reshaped Maui's Investment Landscape

 

Maui County Bill 9, signed into law in 2023, represents the most significant shift in short-term rental (STR) regulation the island has seen in decades. The law was designed to address the housing shortage by converting investor-held vacation rental units back into long-term housing stock — but its practical effects on the real estate market have been far-reaching, and many property owners are still trying to understand what exactly changed and what it means for them.

If you own a condo in Maui, are considering buying one, or are an investor evaluating Maui properties, this is the most important legal development you need to understand before making any decision.

What Bill 9 Actually Changed

Prior to Bill 9, short-term rentals (defined as rentals of less than 180 days) were allowed in certain zoning districts — most notably in hotel and resort zones — and many condo buildings in areas like Kihei, Kahana, and Kaanapali operated as de facto vacation rental buildings, even outside formal hotel zones.

Bill 9 tightened the rules in several key ways:

  • Non-conforming use permits (NCUs) were not renewed for properties in residential zoning districts that had previously operated STRs under grandfather provisions
  • New STR permits are not being issued in apartment (A) and residential (R) zoning categories outside of designated resort and hotel zones
  • Existing STR operators in non-conforming areas were given a phase-out period, but that grace period has now expired for most permit categories
  • Owner-occupant exemptions allow homeowners to rent a room or ohana unit in their primary residence under certain conditions, but this is narrow and does not cover investor-owned vacation units

Which Properties Are Affected

The impact is not uniform. Whether your property is affected depends almost entirely on its zoning designation and location:

  • Hotel zone (H) and resort zone (R): Short-term rentals generally remain permitted. Buildings in Wailea, Kaanapali, and Kapalua that are in hotel-zoned areas are largely unaffected.
  • Apartment zone (A) in Kihei and Kahana: These were the hardest hit. Many buildings that had operated informally as STRs have lost their ability to continue doing so.
  • Condominium Hotel (CH) designation: Properties with this specific designation retain STR rights, but the designation is narrowly applied and cannot be retroactively applied to most buildings.
  • Residential (R) zoning: Effectively banned from new STR permits.

What Current Owners Should Do

If you currently own a Maui condo that has been operating as a short-term rental, you need to take stock of your situation immediately. Here is a practical checklist:

  1. Verify your zoning: Pull up the Maui County GIS portal or work with a local agent or attorney to confirm the exact zoning designation of your parcel.
  2. Review your permit status: Check whether you hold an active STR permit and whether it is still valid under current law. The County's Real Property Tax and STR permit databases are publicly searchable.
  3. Consult a local attorney: The nuances of Bill 9 enforcement are still evolving. An attorney familiar with Maui County land use is essential for any owner in a gray area.
  4. Evaluate your long-term rental yield: If STR operation is no longer available to you, run the numbers on long-term rental. Maui's long-term rental market is tight, and yields — while lower than STR peak years — are often stronger than mainland investors expect.
  5. Consider your exit strategy: If the investment thesis for your unit was built entirely on STR income, and that income is no longer permissible, have an honest conversation with your agent about whether holding, renting long-term, or selling makes the most financial sense.

What This Means for Buyers and Investors

For buyers evaluating Maui condos as investment properties, Bill 9 has created a bifurcated market. Units in genuinely hotel-zoned buildings with active STR rights are commanding a significant premium — and rightly so. Units in apartment-zoned buildings that previously operated as informal STRs have repriced downward as the investment thesis evaporated.

This creates opportunity for buyers who understand the zoning landscape. Long-term rental demand in Maui is substantial — the island has a chronic housing shortage, and well-located 1BR and 2BR units in Kihei or Wailuku will find tenants quickly. The return profile is different from STR, but the risk profile is also lower.

At maui.realestate, we track STR permit status and zoning for every condo building we work with. Before you buy or sell a Maui condo, make sure you're working with someone who understands what these rules actually mean for your specific property.

Frequently Asked Questions

Are short-term rentals banned in Maui?

Not entirely. STRs remain legal in hotel-zoned and resort-zoned properties. What changed is that many residential and apartment-zoned properties that had operated STRs under grandfather provisions or informal tolerance are no longer permitted to do so. If your building is in a hotel zone with a proper STR permit, you are likely unaffected.

Can I still rent my Maui condo on Airbnb?

It depends on your zoning and permit status. If your unit is in a hotel-zoned building with an active STR permit, yes. If your unit is in an apartment or residential zone without a grandfathered permit, you are not legally permitted to operate a short-term rental — and the county has increased enforcement activity.

How does Bill 9 affect property values?

It has created significant downward pressure on condos in non-hotel-zone buildings that were previously valued based on STR income projections. Some Kihei and Kahana condos have repriced 10%–20% lower as a direct result. Conversely, legally-permitted STR units in hotel zones have retained or increased in value due to their now-scarcer status.

Christopher Barca

Your Top Maui Real Estate Agent

Christopher Barca, a founding member of Compass Hawai’i and one of Maui’s top agents, brings 19 years of real estate expertise and over 24 years of island living. With a background in film location management and education from Manhattan’s School of Visual Arts and the University of Hawai’i, he offers unmatched market knowledge, a keen eye for design and architecture, and a talent for showcasing a property’s true potential. As a member of the Compass Sports & Entertainment Division, Chris provides world-class marketing and guidance for everyone from first-time buyers to seasoned investors, all while staying laid-back, passionate, and deeply connected to Maui’s business and creative communities.