Ask a title company in Kihei how long a condo closing takes right now and you will hear a new phrase: permit status letter. Escrow officers on South Kihei Road have started building an extra ten to twenty days into their timelines to wait for one, a document from Maui County's Short-Term Rental Department confirming whether a specific unit still has the legal right to rent nightly. A few years ago nobody asked for this. Today it is close to standard.
That delay is not a bureaucratic quirk. It is the physical evidence of something that has quietly reorganized the entire Kihei condo market. The headline you have probably seen, that roughly 7,000 Maui condos are being phased out of short-term rental use, is true and also nearly useless for making a purchase decision. It treats every affected unit as if it faces the same future. It does not. Kihei's condo inventory has split into three distinct tiers, and which tier a building sits in, not the average price decline or the citywide unit count, is the number that should drive your search.
The Line That Actually Matters
The legislation behind all of this is Ordinance 5909, known as Bill 9, which Mayor Richard Bissen signed into law on December 15, 2025 after the Maui County Council approved it 5-3. It targets 6,208 apartment-zoned units on what's called the Minatoya List, condos that have operated as vacation rentals for decades under a 2001 legal interpretation but were never zoned as hotels. For Kihei specifically, the phase-out deadline is January 1, 2031, five years later than West Maui's 2029 cutoff.
Over 60 percent of Kihei's vacation rental condos sit on that Minatoya List. But being on the list does not mean a building's fate is settled, and that is the part the headline number flattens. Kihei has 26 condo complexes facing that January 2031 deadline, and only eight of them were named in the county's Exhibit 2 shortlist, the list of properties a Temporary Investigative Group identified as good candidates for continued rental use. The other eighteen have no such shortlist behind them. The gap between those two outcomes is already showing up in price, and it is a wider gap than the citywide averages suggest.
| Tier | Zoning status | Example Kihei complexes | Bill 9 exposure |
|---|---|---|---|
| One | Hotel or resort zoned | Maui Banyan, Royal Mauian, Mana Kai, Kihei Akahi | None. Never subject to the phase-out. |
| Two | Minatoya List, named in the county's Exhibit 2 shortlist | Eight of Kihei's 26 affected complexes, including its largest | Phase-out applies unless the specific building is reclassified into H-3 or H-4. Category exists as of June 2026, but building-by-building reclassification is still working through Planning Commission review. |
| Three | Minatoya List, no rezoning path identified | Smaller or non-flagged Minatoya properties | Phase-out applies with no current safety net. |
Tier One Never Entered the Blast Radius
Maui Banyan, Royal Mauian, Mana Kai, and Kihei Akahi are hotel or resort zoned. None of them were ever on the Minatoya List, which means Bill 9 does not touch them at all. Owners in these buildings can operate exactly as they did before the ordinance passed, with no 2031 deadline hanging over the title. That certainty has kept pricing in these buildings comparatively stable while Minatoya-list properties absorbed the shock. It is also why hotel zoning has historically carried a real premium in Maui's condo market, a pattern that predates Bill 9 and has only gotten sharper since.
Tier Two Is a Bet That's Currently Stuck
This is where most of the confusion lives. In the fall of 2025, that Temporary Investigative Group recommended that around 4,500 of the affected units statewide be moved into two new hotel zoning categories, H-3 and H-4, that would let them keep renting short-term. The Maui, Lanai, and Molokai Planning Commissions were asked to weigh in first, and in February 2026 the Maui commission voted 8-1 to recommend denying the framework outright, with the other two commissions following with similar recommendations. That denial meant the Council needed a supermajority of six votes out of nine to move forward anyway.
It found that supermajority. On June 19, 2026, the Council passed Bill 88 on a 7-2 vote, overriding the commissions' recommendations and formally creating the H-3 and H-4 hotel zoning categories.
Creating the categories was the easier part. Actually moving a specific Kihei building into one of them requires a second round of Council resolutions, and each of those gets routed back through the Planning Commission for its own review. That process restarted on July 24, 2026, when the Council voted 7-1, twice, to refer roughly 2,056 apartment-district units into the new hotel zones for reclassification, covering categories like timeshares, leaseholds, and properties the county says already function like hotels. That is a fraction of the 4,500 units the TIG originally flagged as candidates, and until a specific Kihei complex clears that same Planning Commission review a second time, its Minatoya-list status, and the 2031 deadline attached to it, still stands.
One board president in Kihei captured the mood well when asked about the possibility of legal action if the phase-out proceeded as written:
"We're waiting to see if it does pass, and if it does, along with our attorney, we'll take a look at it. I can't say that we've made any final decision."
That was Cindy Bulger, board president at the 188-unit Hale Kamaole, speaking before Bill 9's passage. The same posture, watch and consult counsel, describes where a lot of Tier Two buildings sit today. Nothing is resolved. Everything is being watched.
All nine Council seats and the Mayor's office are on the ballot in the November 2026 election, which means the body deciding whether to revisit that supermajority threshold could look different by the time Kihei's 2031 deadline gets closer. For a Tier Two buyer, that is not background noise. It is part of the asset's risk profile.
Tier Three Has No List and No Vote Pending
Some Minatoya-list buildings were never flagged by the TIG as candidates for hotel rezoning at all. These properties are working toward the 2031 deadline with no current mechanism to avoid it, short of a court ruling striking down Bill 9 entirely.
Two lawsuits are pursuing exactly that. Malter v. Maui County, filed December 19, 2025 by owners at Kaanapali Royal, and Lynam v. County of Maui, filed three days later on behalf of owners across five South Maui condos, both argue that Bill 9 amounts to an unconstitutional taking of property rights without compensation. Earlier this year, the constitutional claims in at least one case remained active with hearings scheduled into late April, and no ruling or injunction had been issued in either case.
Kamaole Sands, a 440-unit complex built in 1983 on the site of a former mango orchard, illustrates why size alone tells you nothing about which tier a building falls into. It is one of the largest vacation rental complexes in Kihei, and its owners have previously faced maintenance assessments running into the tens of thousands of dollars per unit for major plumbing work, costs that were only manageable because rental income was covering them. If that income disappears on schedule in 2031 with no rezoning in place, the math on those assessments changes for whoever owns the unit at the time. Being large and well known does not put a complex on any protected list. Only its actual Exhibit 2 status does, and that has to be verified building by building, not assumed from reputation.
What the Price Gap Is Actually Telling You
Citywide, Minatoya-list condo prices in Kihei have fallen somewhere between 25 and 29 percent from their pre-Bill 9 peak, depending on which tracking source you use. That range matters less than what sits underneath it. Hotel-zoned Tier One buildings have held value through the same period, while the steepest declines have concentrated in Tier Three properties with no rezoning path and, in some cases, active litigation clouding their long-term use.
Days on market for Kihei short-term rental condos have stretched to around 134 days, well beyond what a normal beach-town condo market would show, as buyers and sellers argue over who absorbs the regulatory risk in the asking price. Appraisers have their own version of this problem. Sales from 2021 and 2022, before the market began pricing in Bill 9, no longer function as reliable comparables. Anyone valuing a Minatoya-list unit today is leaning on 2023 and 2024 sales that already reflect a market adjusting to uncertainty, which makes appraisal a genuinely harder exercise than it used to be in this segment.
The Tax Math That Trips Up Mainland Buyers
For anyone still planning to hold and rent a Kihei condo through 2031, the yield math has a line that's easy to miss. Maui STR operators pay a combined 14.962 percent in General Excise Tax and Transient Accommodations Tax on gross rental revenue, before any income tax. On $65,000 in gross annual rental income, roughly the midpoint of what a typical Kihei STR condo generates, that's $9,725 off the top every year. Buyers running projections off a listing agent's gross income figure without netting this out are working from an inflated number.
Before You Write an Offer
A few questions are worth asking before you get attached to a specific unit:
- Is the building hotel or resort zoned, or is it on the Minatoya List? This is the single fact that determines everything else.
- If it is Minatoya-listed, has it been named in any of the county's Exhibit 2 rezoning resolutions, or is it still waiting?
- Has the HOA board discussed litigation, and what is the special assessment history? A building with deferred maintenance and disappearing rental income is a different kind of asset than one without either issue.
- Has the seller's title company already pulled a permit status letter, and does the closing timeline account for the extra ten to twenty days if not?
None of this makes a Minatoya-list condo a bad purchase. Some buyers are specifically looking for the pricing gap this uncertainty has created, and a Tier Two building with a plausible rezoning path can be a reasonable bet at the right price. The mistake is shopping the Kihei condo market as if it were still one market. It isn't anymore, and the zoning line drawn through it is the fact that should show up first in every conversation about value.
If you're weighing a Kihei condo purchase and want a clear read on where a specific building actually stands, Chaston Marcos can walk through the zoning history, Exhibit 2 status, and current comparable sales for the property you're considering. Let's Connect.
A Few Questions Worth Asking Directly
Does this affect condos in Wailea or West Maui the same way? The mechanism is the same statewide, but the deadlines differ. West Maui's Minatoya-list units phase out by January 1, 2029, two years ahead of Kihei and the rest of the county. Wailea has its own mix of hotel-zoned and Minatoya-list buildings, and the same tier logic applies there.
If I already own a Minatoya-list condo in Kihei, what should I do right now? Confirm whether your building has been named in any Exhibit 2 rezoning resolution, and talk with your HOA board about where they stand on potential litigation or a wait-and-see approach. Those two facts matter more right now than the 2031 date itself.
Could the lawsuits or the 2026 election change any of this before 2031? Possibly. Both pending lawsuits challenge Bill 9's constitutionality, and a new Council seated after the November 2026 election could revisit the supermajority threshold needed to advance rezoning. Neither outcome is something a buyer should count on, but both are worth watching if you're holding a Tier Two or Tier Three property.
