Short-term rentals: Appleseed study uses misinformation and poor methodology

A recent report released by Hawaii Appleseed Center for Law and Economic Justice relies on questionable methodology and misinformation to draw false and exaggerated conclusions. Unfortunately, this inflammatory approach does little to foster a constructive conversation about creating common sense and enforceable short-term rental laws in the islands.

On Oahu, for example, a 30-year moratorium on short-term rental permits has been in place and regulations have not been updated over that span. Because these rules are unreasonable, enforcement has been ineffective and everyone on all sides of the debate agree the system is broken. Yet, Appleseed advocates for a continuation of the same approach. Airbnb believes the industry should be regulated with rules that reflect the realities of today’s economy and tourism industry, but at the same time, preserves neighborhood character and affordable housing.

Let’s set the record straight and ensure that readers have the facts and a better understanding of the short-term rental community in Hawaii. To start, here are some key facts about alternative accommodations and Airbnb in Hawaii:

>> Alternative accommodations in Hawaii generate $5.1 billion in economic impact for the state and support 34,000 jobs per the Hawaii Tourism Authority (HTA).

>> HTA also found that Airbnb is only the third-largest short-term rental platform in the islands.

>> According to an annual survey of hosts, two-thirds report that renting short term has helped them afford to stay in their homes. That amounts to nearly 6,000 people who are able to use their homes — normally their biggest expense — to earn extra money in order to remain in the place they call home.

>> More than 1,000 hosts in Hawaii have avoided eviction or foreclosure by sharing their homes.

The HTA agrees that short-term rentals can be a powerful tool to help people stay in their homes. According to its analysis of the short-term vacation rental market from December 2016: “The ability to retain home ownership tends to be positively impacted by income generated by shared accommodations.” While Appleseed’s report claims that the majority of vacation rental units are operated by nonresidents, this finding is not rooted in fact and the authors note, “[…] available data is not sufficiently detailed to determine the full extent of nonresident ownership.”

We can certainly all agree that more needs to be done to address the state’s affordability crisis, but vilifying middle-class residents who share their home is not the right path forward. According to the American Community Survey, the state has added only 40,000 units of new housing since 2000. During that same window of time, nearly 70,000 people have moved to Hawaii. As new housing construction lags, home prices increase. Blaming people who rent out their home to help pay the bills misses the bigger picture.

Lastly, while the authors of the report like to claim that Airbnb units with 80 percent occupancy rate would bring in more revenue than a long-term rental, they fail to capture the reality that typical Airbnb hosts rent their home for 55 nights out of the year. This amounts to an annual occupancy rate of approximately 15 percent. The idea that all 8,700 Airbnb hosts across islands are reaching 80 percent occupancy and making more on the short-term rental market than they would on the long-term rental market is simply false.

Over the course of the last three years, we have sought to work with local lawmakers to develop and implement a comprehensive set of policies to modernize the regulatory framework for short-term vacation rentals, support the state’s largest industry, and protect housing stock for of Hawaii’s residents. We remain committed to working state and local leaders to see this through, and will continue to advocate for our host community who rely on the supplemental income earned through Airbnb to make ends meet.

Matt Middlebrook is public policy manager for Airbnb.