Key Points: How Bill 9 Impacts Short Term Rentals in Kihei
- Pricing Pressure Since May 2024 – After Maui County introduced Bill 9, short term rentals in A-1 zoned complexes (Minatoya Condos) such as Kihei Resort, Maui Banyan, Maui Vista, and Pacific Shores have already shown signs of pricing shifts. Properties that are actually selling might even be trading at 50 cents on the dollar compared to their peak!
- Buyer Uncertainty Driving Negotiations – Properties that once commanded quick offers are now seeing longer days on market and deeper negotiations as buyers weigh the risk of a potential rental ban.
- Comparisons Matter – Non-impacted, hotel-zoned condos in Kihei and around Maui continue to hold stronger value, highlighting the growing gap between “safe” vacation rental properties and those with uncertain futures.
- Spillover Effect – Having said, most every other market sector of Maui real estate has experienced a trickle down effect on pricing, inventory and days on market from this proposed legislation. The only segment that bucks that trend is “entry level” single-family homes (<$1.1M).
- Supply and Demand – Even with a team as experienced as ours (with over 150 years practicing real estate combined), we have never seen such a dramatic shift from seller’s to buyer’s market. 3 years ago, it seemed there were 10 buyers for every 1 condo. Now it feels like there’s 10 condos for every 1 buyer!
- Opportunity for Long-Term Buyers – While uncertainty has softened pricing in some A-1 zoned properties, it may also present an entry point for buyers who plan to hold long term and prioritize lifestyle over short-term rental income.
- Misinformation is Rampant – Don’t trust everything you read or hear online, especially with social media. We’ve heard from countless prospective buyers that Maui is banning all short term rentals. That is simply not true. Even this proposed phase out of ~7,000 units hasn’t be codified yet, and could potentially be held up in court for years.
The Maui County proposal to ban short-term rentals in apartment-zoned condominiums, known as Bill 9, has sent shockwaves through the Maui condominium market as a whole since its proposal. Looking at a granular level, Kihei condo prices have fallen sharply and inventory has surged, even though the bill has yet to be fully approved. Sellers of affected condos are slashing asking prices to attract the few buyers still in the market, while many would-be buyers are holding back amid the uncertainty. Below, let’s examine how the looming ban has affected prices at specific Kihei complexes and across Maui’s apartment-zoned vacation rentals as a whole.
Bill 9 and the “Minatoya List”: Short-Term Rentals in Apartment Zones
Bill 9 aims to phase out short-term vacation rentals (STRs) in Maui’s apartment-zoned properties, targeting an estimated 6,100–7,000 condominium units. Roughly 13% of Maui’s housing stock. These units are primarily in the Apartment District (zoned A-1 or A-2) and have been operating as vacation rentals under an old “Minatoya List” exemption. The Minatoya List refers to the list of apartment-zoned condo complexes (buildings permitted before April 20, 1989) that were grandfathered to allow short-term rentals despite not being in hotel/resort zones. It’s named after the county attorney whose legal opinion in the 1990s established their STR eligibility, later codified in the county code. If Bill 9 passes, those decades-old allowances would be repealed, eliminating vacation rentals in all Minatoya List condos after a designated date.
Kihei has one of the largest concentrations of these impacted condos. In fact, over 60% of Kihei’s legal vacation-rental condo units are on the Minatoya List. This includes many popular condominium resorts built in the 1970s and 1980s. Notable examples range from smaller properties such as Kihei Resort (64 units), to mid sized complexes like Pacific Shores (136 units) and Maui Vista (280 units), and larger resorts like Maui Kamaole (316 units) and Kamaole Sands (428 units). All of these currently allow short-term vacation renting and drew significant investor interest largely due to their rental income potential. Under Bill 9, however, any condo on the Minatoya List would lose the right to do short-term rentals. Owners would have to either switch to long-term tenants or leave units vacant for personal use. A drastic change to their investment model.
Mayor Bissen’s proposal was motivated by Maui’s housing shortage (exacerbated by the displacement of residents after the Lahaina fire in August 2023) and the idea that ending STRs in these areas could return units to the long-term housing pool. The initial draft called for a “sunset” date as early as July 1, 2025 for West Maui Minatoya List condos and January 1, 2026 for the rest of Maui. After public pushback and deliberations, lawmakers have since discussed a more gradual phase-out.
Amendments now set the ban’s effective “drop-dead date” at July 1, 2028 for West Maui and 2030 for South Maui and other areas. Even with the extended timeline, the core outcome is the same: short-term rentals in Kihei’s apartment-zoned condos would be outlawed within a few years. As of July 25, 2025, Bill 9 has advanced out of committee (with a 6–3 vote on July 24, 2025) and is awaiting full County Council approval. In the meantime, the mere prospect of this ban has thrown the Kihei condo market into turmoil.
Market Shock: Inventory Surges and Prices Plunge
Buyer demand for Kihei vacation condos collapsed in the months following the Bill 9 announcement, as uncertainty clouded the future profitability of these properties. According to Realtors Association of Maui’s data, the median sales price for condos island-wide plummeted nearly 25% year-over-year, from a record $965,000 in April 2024 (right before the ban was proposed) to about $727,000 in April 2025. This erased much of the pandemic-era price appreciation for condos. By June 2025, condo prices were down roughly 30% year-over-year. For comparison, Maui’s single-family home median price remained relatively stable in the same period (down ~6%), highlighting how the price decline has been concentrated in the condo sector, particularly those used as vacation rentals.
At the same time, unsold inventory has flooded the condo market. Many owners, fearing the worst, put their units up for sale after the mayor’s proposal. The number of Maui condos listed for sale jumped from 536 in April 2024 to 910 by April 2025 – a 70% surge in inventory. As of July 2025, there was over a 15.3-month supply of condos on the market (up 43% from a year prior, see graph below). Undeniable evidence of a strong buyer’s market. Would-be buyers have grown skittish, and many are waiting in limbo until there’s a definitive outcome on the rental ban. This standoff has left a glut of listings sitting on the market and forced sellers to compete by cutting prices.
Crucially, the downturn is heaviest in the apartment-zoned vacation rental complexes targeted by Bill 9. Many Kihei resort condo values have already fallen by roughly a third since early 2024, purely from anticipation of the ban. Sellers in these complexes are frequently accepting offers 10% or more below their asking prices, and about 75% of recent condo sales have closed under the list price (a complete reversal from the hyper-competitive market of 2021–2022). In effect, the short-term rental condos have shifted abruptly from a seller’s market to a buyer’s market.
Even before any law is enacted, the financial hit is tangible. A University of Hawaiʻi economic study had projected that banning these vacation rentals could eventually cause condo values to drop 20–40%. Shockingly, the market is now experiencing that decline preemptively. The same study warned of broader economic fallout if Bill 9 passes – an estimated 15% reduction in visitor spending (around $900 million annually, referenced in the table above), between 1,900 to 3,800 jobs lost and a devastating 4-8% loss of Maui’s GDP (see table below) due to fewer tourists. Those impacts remain speculative, but the immediate effect on property values is already unfolding, as investors factor in the potential loss of rental income.
As Realtor Association of Maui president Lynette Pendergast observed in June, “Things are up in the air… Had the decision been made months ago, this feeling would not be so prevalent”. The County Council’s slow deliberation (postponing votes through late 2024 and mid-2025) essentially prolonged the uncertainty, deepening the chill on the market. In the absence of clarity, buyers remain cautious and prices continue to soften, creating opportunities for savvy bargain-hunters but headaches for sellers.
A Case Study of Kihei Resort
To see the price effects up close, just look at this specific Kihei condo developments on the Minatoya List. Kihei Resort, a quaint 64-unit complex in North Kihei, is a quintessential example of the downturn. Normally, Kihei Resort has been one of the more “affordable” short-term rentable condos in South Maui. Popular for its lower entry prices and steady rental occupancy. But since Bill 9’s proposal, sales activity there has nearly ground to a halt. From July 2024 through August 2025, only 2 units at Kihei Resort sold, compared to 9 units sold in the previous year.
With demand evaporating, the median sales price at Kihei Resort plunged from $740,000 to about $522,500 year-over-year – a 29% drop in value. Homes that would have fetched in the $700,000 range from 2022 until May 2024, are now priced in the $500K-$600K zone. Additionally, those few sales took much longer to occur: the median days on market for Kihei Resort listings spiked from 49 days to 169 days (nearly 6 months) over the past 15 months. This illustrates how buyers are hesitant and sales are painfully slow unless prices are aggressively reduced.
Indeed, current listings at Kihei Resort show significant price cuts. For instance, a 1-bedroom unit originally listed at $685,000 was recently marked down by $110,000 to a current asking price of $575,000. Another 1-bedroom is asking $550,000 after a smaller $90,000 reduction. Despite such discounts, these units have sat on the market for over 215 days on average. Seven months on market, in what used to be a fast-moving vacation condo niche, underscores the sea change. Where Kihei Resort condos once often attracted multiple offers and sold quickly in past years, now buyers have the upper hand and are negotiating hard. The situation is similar at most every Kihei complex that relies on short-term rental investors.
Wider Context: Hotel-Zoned Condos Hold Relatively Steady, Future Outlook Uncertain
It’s important to note that not all Maui condos are suffering equally. The carnage is largely confined to the Minatoya List properties. In comparison, hotel-zoned condos, which are exempt from Bill 9, have remained relatively stable in price and demand. Complexes like Kihei Kai Nani, Kihei Akahi, or upscale developments like Ho’olei in Wailea or the Montage Residences in Kapalua continue to legally welcome short-term renters and thus retain more investor appeal. I do want to point out a spillover effect, however. Let’s take a look at the data…
In the 15 months from the start of 2023 to mid May 2024, there were 100 hotel-zoned condos sold in Kihei. The median sales price of $1,074,500 was actually $27,500 more than the median list price, and days on market was 76. In the 15 months since mid May 2024, there has been 75 hotel-zoned condos sold in Kihei, a 25% decrease. The median sales price of $950,000 was $48,000 less than the listing price, and days on market was 108. Comparing the two 15 month time frames, this is a price decrease of 12% and condos sat on market for 42% longer. While the shift isn’t nearly as pronounced compared to their Minatoya counterparts, it’s clear there has been some trickle down into this segment of the market as well.
As of writing, the fate of Bill 9 is still being decided, and the real estate market remains in limbo. The Maui County Council is expected to hold final readings and votes on the bill later in 2025. If it passes, legal challenges by affected owners and condo associations are likely – they argue the ban could constitute an illegal taking of vested property rights, among other issues. The implementation timeline (now pushed to 2028 for West Maui and 2030 for South Maui) might also change as the political process continues. In the interim, market sentiment is unlikely to recover until a clear outcome is known.
While broader macroeconomic factors (inflation, high interest rates, rising carrying costs) are also impacting Maui real estate, the STR ban proposal is the single biggest factor turning the condo market upside-down. Every week that goes by without resolution potentially prolongs the soft prices. Some of the owners we talk to are holding out hope that the Council will vote down Bill 9 or carve out exemptions. Maybe they’ll enact a provision allowing STRs in South Maui’s tourist areas. Might there be an amendment providing a path to rezone certain properties to hotel use. Any such compromise could breathe life back into Kihei condo values. On the other hand, if the ban is approved in full, the current “fire sale” environment might continue until all investors who are unwilling to convert to long-term rentals have sold off.
What is the Future for Short Term Rentals on Maui?
The mere prospect of Maui’s short-term rental ban has already driven Kihei condo prices down and flipped the market dynamics. Apartment-zoned vacation condos that were once hot commodities are now selling at discounts of 25–50% from their peak, with far more units available and far fewer buyers. Kihei’s A-1 zoned condos have essentially become collateral damage in Maui’s effort to solve its housing crisis.
Whether this translates into affordable housing for locals, or simply economic pain and lost equity, remains to be seen. For now, sellers of these condos face a tough reality: to find a buyer, they must price low and be patient. Conversely, astute buyers see an unusual window of opportunity to purchase Maui real estate at a relative bargain, albeit with the caveat of uncertain future use. All eyes are on the County Council’s next moves. The final decision on Bill 9 will shape Maui’s housing policy. It will dictate the future trajectory of Maui’s condo market, either allowing it to recover or forcing a longer-term readjustment in values.
Frequently Asked Questions (FAQs)
Q: What exactly is Bill 9?
A: Bill 9 is proposed Maui County legislation aimed at phasing out short-term vacation rentals (STRs) in A-1 zoned apartment districts — better known as the “Minatoya List.” If passed, it would gradually convert thousands of STRs into long-term housing.
Q: How many condos in Kihei could be affected?
A: Kihei has some of the highest concentrations of Minatoya List condos on Maui. Complexes like Maui Banyan, Maui Vista, Pacific Shores, and Kihei Resort are among those most directly impacted.
Q: How has the market reacted so far?
A: Since the bill was introduced in May 2024, many A-1 zoned condos in Kihei have seen slower sales and downward pressure on pricing, while hotel-zoned condos have held relatively firm. Buyers are factoring in the risk of losing short-term rental income.
Q: Are hotel-zoned condos safer investments?
A: As things are today, yes. Condos with official hotel zoning are not included in Bill 9, which means they will continue to remain eligible for vacation rentals for the foreseeable future. These properties are currently viewed as more stable and desirable by investors.
Q: What does this mean for buyers who want a condo in Kihei?
A: If you’re an investor seeking STR income, hotel-zoned properties are the safer bet. If you’re buying primarily for personal use or long-term rental, softened prices in Minatoya List condos offer valuable opportunities.
Q: When would the changes take effect?
A: Bill 9 proposes a phased rollout, starting in 2028 in West Maui and 2030 for the rest of the island, including Kihei. However, the bill must still pass through further council readings and could face legal challenges.
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