Hawaii Considers Ban on Short-Term Rentals to Address Housing Crisis

Hawaii is grappling with a severe housing crisis, and lawmakers are exploring a controversial solution: phasing out short-term rentals like Airbnb and Vrbo properties.

A Perfect Storm of Problems

Two bills currently in the state legislature, House Bill 1838 and Senate Bill 2919, aim to restrict vacation rentals that aren't occupied by the owner. This proposal comes amidst a confluence of factors:

  • Rising Housing Costs: Hawaii residents face some of the nation's highest housing costs, exceeding the national average by more than 2.5 times.
  • Homelessness Epidemic: The state struggles with homelessness, with over 6,200 people experiencing homelessness on a single night in January 2023.
  • Tourism's Impact: Residents have long expressed concerns about the impact of tourism on housing accessibility. Development of luxury homes and resorts is seen as a contributing factor. This issue was exacerbated by the devastating Maui wildfires in August 2023, which destroyed numerous affordable housing units.

The Case for Regulation

Supporters of the bills argue that short-term rentals have become a significant contributor to the housing shortage. Homes converted to vacation rentals reduce the availability of long-term housing options for residents. In some areas, like Lahaina, short-term rentals comprise a substantial portion of the housing stock (up to 87% in some neighborhoods).

Proponents believe restricting these rentals will:

  • Increase the availability of long-term housing units for residents
  • Help curb rising housing costs
  • Prevent further out-migration of Native Hawaiians and other residents forced out by a lack of affordable housing options

Opposition and Potential Challenges

The Maui Chamber of Commerce, along with some property owners, oppose the legislation. They argue that it could:

  • Violate property owner rights
  • Lead to legal challenges against the state
  • Have unintended consequences

Seeking Solutions

Governor Green has acknowledged the severity of the housing crisis by issuing emergency declarations to address issues like rent control, construction of homeless shelters, and expedited permitting for new housing developments, including affordable housing.

The debate over short-term rentals highlights the complex challenges Hawaii faces in balancing tourism, economic needs, and the well-being of its residents.