A pair of Hawaii bills that would give counties expanded powers to ban short-term rentals have passed through the House and Senate and are now in reconciliation. An upcoming vote in the House is expected.
The bills aim to let counties phase out short-term rentals that are not owner-occupied, with the goal of reducing high housing costs and homelessness in the state.
House Bill 1838 has been sent from the Senate to the House with amendments, while Senate Bill 2919 passed out of committee to the full Senate this week.
The main problem with short-term rentals, most popularly Airbnb and VRBO, is that they allocate homes that could provide permanent housing for residents to vacationers and short-term visitors instead.
Housing in Hawaii is more than 2.5 times the national average, and the U.S. Department of Housing and Urban Development said there were over 6,200 homeless as of January 2023.
“Short-term rentals in Hawai’i have proven to be more profitable than renting to local families, but this profit often comes at the cost of the communities where they’re located,” Director of Taxation Gary S. Suganuma said during March testimony about the bill.
In Lahaina, for example, 25 percent of all housing units are listed as short-term rentals, a University of Hawaii research group found. In surrounding areas that percentage is as high as 87 percent.
The 2020 U.S. Census determined that more than half of all native Hawaiians are living outside of the state.
The wildfires in Maui in August 2023 have made the problem worse, displacing thousands of people from their homes, including affordable housing units.
About 3,000 households are still living in hotels and other short-term accommodations indefinitely as decisions about rebuilding are made.
Hawaii Governor Josh Green has said he may shut down all short-term vacation rentals in West Maui if property owners don’t offer 18-month leases for 3,000 of the 27,000 short-term units currently listed in Maui to house all those in need.
“There are 27,000 short-term rental units on Maui alone, and if we can dedicate just 10 percent of these homes to displaced Lahaina families, we can house them all,” Green said. “This is the right thing to do, and I urge you to join us.”
The government is prepared to pay the rent for those families and at higher rates than normal subsidized housing because of the crisis.
On the other side of the issue, short-term rental owner Joshua Montgomery pointed out recently on the “Think Tech Hawaii” YouTube channel that 49,000 people are employed in the state by short-term rentals and that the rentals generate $4.8 billion in visitor spending each year, including $720 million in tax revenue.
Vacation rental profits stay in the neighborhood, he said further, while hotels are owned mostly by companies “off the island.”
Montgomery said that short-term rental owners have been organizing. He heads up the Ohana Aina Association, which represents transient accommodations in Hawaii.
“If our elected officials—especially here on the Big Island—think that they can continue to push us around in the absence of an organization, they’ve got another thing coming to them,” he said.
“November’s coming pretty quick,” he added, “and I’m looking forward to seeing a lot of these folks who are in elected office in our rearview mirror.”
Sen. Jarrett Keohokalole, an author of the Senate bill, pointed out that the vacation rentals have radically changed communities in Hawaii in the last 20 years, causing residents to leave the area in some cases.
He told SFGate it was ironic that the House bill attempts to amend a 50-year-old statute preventing residential land from being phased out. The original bill aimed to prevent counties from turning over homes to sugar plantations, which at the time strained residential housing resources just like the vacation rentals are doing.
