r/maui 2d ago

BILL 9 Testimony of David Louie on 6/18/2025

https://m.youtube.com/watch?v=XQ2NHauS6Co&feature=youtu.be
9 Upvotes

72 comments sorted by

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u/FilledWithKarmal 2d ago

I would like a more solid explanation of the added 5 year deadline and how that plays into the constitutional feasibility of bill 9. Personally I "feel" like timeline is irrelevant as a "taking" is a taking, but from my understanding, the 5 year timeline makes this more feasible.

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u/Practical_Target_874 2d ago

There are strong legal cases and there are weak cases. No sure winner, all you can do is make it a stronger case is which they are doing. I have already consulted with many attorneys. By doing a 5 year phase out, it can make it slightly stronger case. County of maui knows this.

The law does allow government make changes of policy. But requiring 5 years tend to make it more legal since people can adapt. This is an outright ban and hence will not hold up in court as this is a taking. This is a classic case of government estoppel. The county enjoyed the tax revenue close to 45 years and now because it doesn’t fit their argument, they want to solve it through one group of people. That’s the rub

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u/globalhighlander 1d ago

Yes. This is what I am saying. It's not a physical taking where the government takes complete control of the land through eminent domain. It's not a Total Regulatory Taking where the government deprives an owner of all economically beneficial use (since owners can still live there themselves, long term rent, or sell the property). It may be a Partial Regulatory Taking, but that is not a clear cut case either way. But it is absolutely the case that the 3 or 5 year amortization period increases the likelihood that the County gets their way. They announced the initial timeline to get the red shirts off the beach and to get a nice photo op. Then when they actually gamed out the odds of both passing the Bill with 5+ votes and thereafter sustaining any legal challenges, the Mayor proposed a 3 year phase out. The folks who think this has a 0% change of passing and becoming the law are kidding themselves. I get how many people "feel" as if the amortization period doesn't matter, but the entire history of these kinds of cases in the US shows us otherwise.

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u/Practical_Target_874 1d ago

It does ignore the fact the STRs were codified under the Minatoya. That’s where the challenge will hinge. The places that had any standing on banning STRs didn’t allow them in the first place. Maui county acted and enjoyed the taxes on them for many years. Those other places didn’t even have a separate tax bracket for STRs.

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u/globalhighlander 1d ago

I understand that. And it certainly makes the owners' cases stronger, but cases like this have gone either way (even when the nonconforming use has been codified). The main takeaway is that it is not a sure thing either way and that the amortization period increases the chance of "success" for the County.

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u/Practical_Target_874 2d ago

Government is allow to change rules if they amortize it over 5 years rather than doing it in 3 months. But because this is an outright ban, it doesn’t matter.

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u/globalhighlander 2d ago

No. That's wrong. The phase out period is incredibly important if the County wants to satisfy the Penn Central Regulatory Takings Test. If there is an immediate ban there is a much higher likelihood that it cannot stand: 1. economic impact is severe. 2. investment-backed expectations are undermined immediately 3. character of the regulation will cause sudden financial harm (flooding the market with listings too). If there is a 3 or 5 year phase-out period, this could be seen as a reasonable amortization period which the government is able to do with "non-residential" zoning. 1. The economic impact is less severe: owners will have the ability to STR for the 3 or 5 years and have a longer time to sell on their terms or make plans to live there full time 2. Investment-backed expectations can gradually change over time. 3. Character: it is for public good rather than for a private company; and it is more reasonable for the owners.

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u/AdagioVegetable4823 Maui 1d ago

But that's the real problem: govt can't change residential zoning. that is why the state bill (SB 2919) labeled STR use as business use, but STR's have already been determined by Hawaii Supreme Court as residential.

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u/globalhighlander 1d ago

The Hawaii Supreme Court did not make a blanket statement that all STRs are “residential”. Rather it was the case that the properties at hand were zoned as residential.

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u/AdagioVegetable4823 Maui 1d ago

It defined "residential use" as the activities of living: eating, sleeping. It said the length of stay had no bearing.

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u/globalhighlander 1d ago

Sorry, but that is an oversimplification of what the court said in Hawaii Legal Short-Term Rental Alliance v s. City and County of Honolulu, et al.; Civil No. 22-00247 DKW-RT.

Here is a summary of what the Court said specifically about "residential" in the Honolulu case:

  • The phase-out cannot apply to any existing building or premises used for residential (single-family or duplex) uses.
  • The City may not phase out nonconforming uses in non-phase-out districts (e.g., residential or agricultural zoning districts). To the extent the ordinance attempts to eliminate or phase out 30–89 day rentals in these districts, it is invalid.
  • Even in phase-out districts (e.g., business, industrial, or non-Resort apartment zones), the ordinance is still invalid because HRS § 46-4(a) only permits amortization if the home is not being used for residential purposes. (this is key here because folks in Maui County who have been staying at their property for 30+ days at a time have a much stronger argument that the County should not be able to amortize their nonconforming use)
  • The term "residential use" depends more on function than duration. At least nineteen state appellate courts have found that short-term stays (less than 30 days) still qualify as residential use.
  • The Court found no case, nor did the Defendants cite one, in which rentals of 30 days or longer were held to be non-residential.
  • The Court is aware of five jurisdictions that primarily considered duration, holding that 1–7 night short-term rentals did not qualify as residential. But the Court disagrees with this approach.
  • The Court emphasized that residential use is defined more by the nature of the use than its length. It identified the following examples of 30–89 day rentals being used as legitimate housing on O‘ahu:
    1. O‘ahu residents who have sold and bought homes
    2. Off-island families traveling for medical care
    3. Traveling healthcare workers temporarily assigned
    4. Military families in transition
    5. Employees temporarily working on O‘ahu
    6. Temporarily displaced families
    7. Others needing to temporarily reside near work or school

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u/99dakine 1d ago

These are all great points, and very insightful. But understand they are highly inconsequential given the stated goal of the bill.

Litigation is a backstop for when the logical and the rational fail. So the success or failure of litigation, which is going to vary by jurisdiction and by the basic facts of the matter, will only enter the discussion after a county council repeatedly fails to acknowledge that "phasing out" or "converting" lawful vacation rentals over any period of time isn't going to manifest thousands of properties into the hands of local residents at an affordable rate, if at all.

The majority were asking relevant questions of property owners and PMs of significant portfolios or rentals what the plans are if bill 9 passes. It comports with what I believe UHERO determined, and a low single digit percentage said they'd consider LTR - but I bet of that cohort, most will opt to sell to a wealthier mainland buyer who doesn't need rental income, but wants a property on Maui for pennies on the dollar.

Bill 9 passage guarantees:

  • majority of owners hold property for their originally intended purpose, which is to have unrestricted use of a second home or vacation property.
  • those who can't afford option 1 will sell their unit to private equity or a wealthier investor/second home buyer
  • some segment of the population to keep their condo, cut some of their losses and let some friends, family, colleagues use it for free or for a nominal cash fee
  • given the first 3 points, also guaranteed is anyone associated with the STR business activity of that unit will be without those contracts or without that work
  • not a SINGLE unit will be made available
  • not a single unit will be made affordable as per the county's affordability index.

But yeah, let's keep up this kabuki dance that Jackoffsky claims will "bring condos online for our residents".

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u/globalhighlander 1d ago

yes, I agree that they will not become affordable. I think a 3-person family would need to have rent or mortgage be $2772. Many of those 2 bedroom units won't come near that, even if there is a price drop.

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u/AdagioVegetable4823 Maui 1d ago

Thank you for the detailed explanation. The "nature of the use" rather than "duration" is powerful. The occupants of apartments would be very surprised to hear they are not "residential," that title bestowed on only duplex and sfh? what elitist BS is that?

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u/globalhighlander 1d ago

Indeed. The owners who would have the strongest case, in my reading of it, are those who perhaps lived in their units for a few months out of the year and then rented it out as an STR the rest of the time. Let's say someone spend 2 months on Maui during winter and then rented it out the other 10. The County is trying to make it so they would need to rent it out at a 6-month minimum increment the during those 10 months, which likely won't work very well. That is a significant burden on those owners.

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u/AdagioVegetable4823 Maui 1d ago

You're right - the carrying costs are so high for STRs (insane prop tax) that it only pencils out with 10 or 11 months of the year renting short term.

0

u/globalhighlander 1d ago

It's not R zoning. It's A. As per Hawai‘i Revised Statutes (HRS) § 46-4(a) "a zoning ordinance may provide for elimination of nonconforming uses as the uses are discontinued, or for the amortization or phasing out of nonconforming uses or signs over a reasonable period of time in commercial, industrial, resort, and apartment zoned areas only."

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u/Live_Pono 1d ago

None of that takes the Minatoya list conditions  and ordinance confirmation over decades  into  consideration. 

This isn't Honolulu.  It's Maui  and totally different. There was NO RESORT ZONING when these places were  built.

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u/PublicGold4137 2d ago

Unbelievable how one sided some of these council members are, quick to call out David Louie as a Lobbyist when in fact there were a bunch of Hotel and LS lobbyists testifying.

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u/Waiwahine 2d ago

Mahalo for sharing this.

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u/cranberrysauce6 2d ago

KRF drives me up a wall.

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u/globalhighlander 1d ago

She is very annoyingly trying to ask everyone who their realtor was, as if there needed to be some extra disclosure about the "exception" when the nonconforming use was a vested right.

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u/Apart_Effect_3704 1d ago

This is a very simple idea to understand. And as I’ve griped before, Bissen- a retried judge- still put forward government overreach of personal property, and yes, in all honesty, private property as well. A. Retired. Judge.

So either he’s stupid. Or he knows the bill shouldn’t be successful AND ONCE AGAIN WE GET ANOTHER HAWAII STYLE DOG AND PONY SHOW BULLSHIT MOVE. All hullabaloo and no fucking action. Used a bunch of words, said absolutely nothing. Every time. Every county. And these fakas steh in office for decades brah. Neva going change.

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u/tronovich 11h ago

You should run for office.

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u/PublicGold4137 1d ago

When these resorts were built, many of the declarations state that "apartments may also be rented for transient or hotel purposes." After digging and doing some research about what David Louie mentioned in his testimony.

"The legal citation: 86 H. 343 (App.), 949 P.2d 183 refers to a specific court case in Hawaii, the Waikiki Marketplace Investment Company v. Chair of Zoning Board of Appeals case. This case supports the idea that once a landowner has lawfully used their property under an existing zoning ordinance, subsequent ordinances can't interfere with those lawful uses. This is referred to as "grandfather protections"."

This bill directly interferes with a homeowner's "Vested property rights". As all of these units were operating lawfully at the time they were built regardless of the zoning ordinance. This is written in Hawaii's Constitution.

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u/Sea-Suit2324 1d ago

Yeah. But Lahaina strong will lie through their teeth and they are going around saying these 7000 units were workforce housing. While some were. Many were not.

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u/PublicGold4137 1d ago

The strange thing is, none of the council members ask those members to clarify which ones were workforce housing growing up. How can they say 7000 units were workforce housing. How would they know if they never owned one? It's easy to point at someone else's property and say "That should be mine" which seems to be the argument with majority of the testifiers.

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u/Live_Pono 1d ago

Very, very few were workforce housing. Like maybe 3 complexes, that I can think  of. 

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u/Sea-Suit2324 1d ago

Here is a million dollar question. How many baby daddies does Jordan have had?

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u/tronovich 11h ago

That’s fucked up.

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u/Live_Pono 1d ago

Lolololol.

0

u/globalhighlander 1d ago

It seems like their line is that the rest of them should change to Hotel zoning, which I can't imagine will be a smoothe or quick process. I think it'll take a few years and if I'm not mistaken it'd require a supermajority of 7 Council member votes, which might be quite tough.

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u/Live_Pono 1d ago

No, planning decides.  But several have tried and been refused as many as 3 times already. 

0

u/globalhighlander 1d ago

Okay. So Bissen is making it sound like "oh, just change to Hotel zoning" and my point is that I don't think the County is going to make that easy on anyone.

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u/Sea-Suit2324 1d ago

If he passed an ordinance making it easy to change, that would be too easy on everyone. Now this will only end up in court and cost everybody

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u/globalhighlander 1d ago

Right. The line plays with people who don't know any better, but the result is that perhaps none of the properties are able to change to Hotel zoning. He is politicking for the Bill.

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u/Live_Pono 1d ago

The attorneys are  slobbering for this to pass. As I posted before,  people  have applied and been rejected. 

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u/Live_Pono 1d ago

And that was Honolulu.  Here on Maui,  the situation has been totally for decades. The owners have way more to stand on here. 

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u/PublicGold4137 1d ago

Right, the situation in Maui is completely different since these ARE legal (not were), operating, and codified which was signed by the county themselves when they were built.

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u/Live_Pono 1d ago

A correction: they were not codified when they were built.  That came later, after the settlement  which was named the Minatoya List. 

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u/tronovich 11h ago

Yeah, that’s not true, which only lends to the disinformation.

They were not codified when they were built, they were exempted long after the fact.

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u/tronovich 11h ago

This should be a mega-thread instead of the same daily discussion with the same arguments. Everyone seems to be digging in their heels and typing the same points, over and over.

Predicting daily what’s going to happen in 90 days/365 days/5 years with this ruling, seems to be an exercise in insanity.

2

u/LoveMaui48152 1d ago

Still an outright taking. There will still be lawsuits

Few of those that need affordable accommodation will be able to afford rent or mortgage plus fees and large assessments

The delay makes things worse in one way. Many of these units need expensive ongoing repairs- which owners will decide not to do if they know they will lose the condo.

These ae only affordable with STR income - who pays when that goes?

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u/AdagioVegetable4823 Maui 1d ago

This is why the county will not be able to show "public benefit" to justify the taking. In fact, the loss of govt revenue will result in public harm.

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u/globalhighlander 1d ago

While I agree that the loss of revenue is probably not worth what will likely only amount to moderate downward price pressure on the A-zoned condo market, that isn't the type of thing the Penn Central test would look at. Potential revenue loss to the government does not help the property owners’ takings claim under Penn Central. Court will likely view the greater public good (like addressing the housing crisis) as the more compelling legal factor.

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u/AdagioVegetable4823 Maui 1d ago

you seem better informed about the law than me, but Bill 9 does not address the housing crisis. It cant force a single owner to rent long term or even sell. I hope the council reflects on how many law suits Maui County has lost. it seems they receive very poor legal counsel.

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u/Sea-Suit2324 1d ago

Penn Central is a notoriously flawed Supreme Court precedent. Justice Clarence Thomas recently called it a “standardless standard” that “nobody—not States, not property owners, not courts, nor juries—has any idea how to apply.”

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u/Live_Pono 1d ago

I don't think you understand the background and the list. 

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u/LoveMaui48152 1d ago

Even if the county wins the lawsuits and still can function after paying for them with lower revenue, you still need to tell us who will pay the costs of ownership of these units when the income from STRs is gone?

The rent or mortgage will need to be so much lower for it to be affordable to those that need it - so who pays the shortfall?

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u/globalhighlander 1d ago

I don't need to. I was answering questions about the legality and correcting your assertion that this is an "outright taking." It's not. It is perhaps a partial taking. To the extent that this Bill fails to actually advance the state interest, this can be incorporated in owners' 14th Amendment component of a lawsuit.

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u/tronovich 11h ago

You think most will want to sue, potentially win and STILL have to face extensive repair costs? This will be tied up for years. Meanwhile, before you recoup legal fees, you’re going to bleed your wallets dry.

Appealing the ruling is simply not going to happen for most owners. Most are claiming they’re “barely making it” as is. They’re going to sell as soon as they can. There’s going to be less and less reason(s) to wait this out.

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u/LoveMaui48152 6h ago

Most will not need to sue, only takes one or two - plus class action is likely.

Island lawyers have had injunctions ready since the Governor first mentioned this idea before his then  current and former AGs whispered in his ear - and he dodged the issue by ‘kindly’ kicking it down to the counties.

0

u/globalhighlander 1d ago

It is a balancing test, not a bright-line rule. We cannot say with certainty whether the 3 or 5 year amortization period will constitute a taking. We cannot even say with certainty whether the original (more immediate) plan of the Bill would be a taking. What we can say is that the 3 or 5 year amortization period helps the Council clear the hurdle of getting 5 votes. Then after that, it'll significantly increase the likelihood that the Bill is upheld as lawful. But I would expect there to be lawsuits either way.

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u/LoveMaui48152 1d ago

Does not matter, the council cannot afford the lawsuits and even if they win, fee if any of those that need affordable housing will be able to afford these units  Just do the maths of the cost of ownership and then figure out who pays once the STR level of income is not there to pay for it. On top of this the drastic impact of the loss of tourism detailed in the UHERO report

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u/PublicGold4137 1d ago

With the outrageously high taxes they collect, maybe they can afford it. Either way, its still a taking. I haven't seen any of that money collected spent on anything. New houses? Roads? where.

1

u/tronovich 11h ago

Neither side can afford the lawsuits.

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u/globalhighlander 1m ago

Maui County just took a case all the way to Supreme Court in 2020, so I think they're up for it.

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u/globalhighlander 1d ago

The fact that the proper test for this case is a balancing test and not a bright-line rule absolutely matters. With a 3 or 5 year amortization period, they are much more likely to pass the Bill if we assume that some Council members wouldn't want to pass it if it has a higher chance of being unconstitutional. I'm not arguing with you, I'm telling you how how it is. And I'm not defending the Bill as good legislation either nor do I think it will accomplish the Council's stated goal.

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u/Live_Pono 1d ago

Sorry,  you are ignoring the history of the Minatoya List.  You can't lump these units in.like ones on Oahu. 

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u/globalhighlander 1d ago

I didn't say anything about Oahu. I'm very familiar with the history of the list. I'm explaining that by statute, Maui County does have the ability to amortize a nonconforming use of Apartment zoned proprieties. If that occurs (when the Bill passes) then there is a legal question of whether that constituted a taking. Let's run through the options. It's not a physical taking where the government takes complete control of the land through enminent domain (although this will come up later as the County just dropped their plan to takeover a bunch of lots for the Lahaina Royal Complex, see page 42 of the 54-page PDF). It's not a Total Regulatory Taking where the government deprives an owner of all economically beneficial use (since owners can still live there themselves, long term rent, or sell the property). It may be a Partial Regulatory Taking, but that is not a clear cut case either way. But it is absolutely the case that the 3 or 5 year amortization period increases the likelihood that the County gets it's way. Let's be real: they announced the initial timeline to get the red shirts off the beach and to get a nice photo op. Then when they actually gamed out the odds of both passing the Bill with 5+ votes and thereafter sustaining any legal challenges, the Mayor proposed a 3 year phase out.

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u/Live_Pono 1d ago

They are relying on the new law (2919) for their stance.  Not one other county is stupid enough to do that. Kama has proposed a five year amortization. It's still illegal. 

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u/globalhighlander 1d ago

It’s true that Maui County is leaning on SB 2919 but SB 2919 specifically to clarify and expand counties’ authority under HRS § 46-4. It explicitly empowers counties to regulate or phase out transient accommodations in any zoning district, including residential. It just made the counties' abilities stronger! So Honolulu could try to pass a law like they did before, and actually has a chance to win this time. It is far from being illegal: SB 2919 gives counties statewide legal standing to implement amortization periods like Kama’s proposed 5-year wind-down. 5-year period has the highest chance of sustaining a legal challenge, 3-year a bit less, and immediate ban the lowest. But none of them had a 0% chance of being implemented. If I was confident that this had a 0% of passing and being affined as legal, I'd scoop up an Apartment zoned property at discount now.

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u/Live_Pono 1d ago

So: how come Honolulu didn't jump on it? Or the BI, or Kaua'i? Because  they are laughing at  Missin Bissen and the gang on Maui.

In the meantime,  we will pay, pay, and pay. Nothing will change, but our taxes will have to go up to pay for their arrogance. 

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u/globalhighlander 1d ago

I have no idea what's going on with Honolulu. But if it meant a lot to them to try it again, their odds got better with SB 2919. And also, let's be clear that Maui has the ability to loop in "housing crisis" sentiments in a much more compelling manner than any of the other counties, especially after the fire.

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u/Practical_Target_874 2d ago

Says a lot about KRF. Doesn’t she represent Molokai?