The City and County of Honolulu would benefit from developing sensible regulations for short-term vacation rentals, and putting effort into collecting taxes and other fees that can go toward improving infrastructure and the environment for residents.

Short-term vacation rentals hugely benefit the local economy in neighborhoods where they are located. Currently, more than $120 million annually comes to Hawaii from general excise taxes (GET) and transient accommodation taxes (TAT) paid by short-term rentals — and $500 million yearly is spent on food and beverages, along with shopping and tourist activities by short-term renters. Most importantly, these dollars are largely spent in the communities where visitors are staying, outside the traditional tourist center of Waikiki.

Oahu’s hotel occupancy rate is strong — at 80-83%, with the average nightly rate near the highest in the nation at $278. The number of Oahu visitors is at record-high levels, and arrivals are well beyond the capacity of hotels. Alternative accommodations make it possible to host this growing number of guests.

I have a B&B with a legal 30-night minimum stay and have learned that guests opting for neighborhood rentals have reasons critical to their Oahu visit. Often, they are visiting relatives — grandparents from neighbor islands or the mainland requiring accommodations in neighborhoods close to family.

Another big reason is the need for family space at reasonable prices. The average number per group staying in short-term rentals is about four, versus two staying in traditional hotels. Many families can afford to come to Oahu only because short-term vacation rentals are available, with room for the whole family at half the price of a hotel, and that includes a partial kitchen.

Still another reason is that visitors grow tired of Waikiki. The average Oahu visitors have been here four times before, and have found areas like the Windward side and North Shore to be charming and friendly places to stay.

Considering this, stopping all or most vacation rental activity and building more hotels in Waikiki would not be viable. Tourists looking for short-term rentals would go to destinations other than Oahu, places that have affordable accommodations.

Concerns of local residents need to be considered, though, and it is true that tourists outside of the designated tourist area raise many crowding issues. Limits need to be set, but ridding Oahu of all vacation rentals would be far too costly.

Many neighborhood businesses relying on visitors would not be able to sustain themselves. Thousands of jobs related to these businesses and vacation rentals, such as cleaning staff and gardeners, would be lost. Many local vacation-rental owners count on the income to pay their mortgage and keeping these kamaaina in their homes is important.

The current version of the Council’s Bill 89 does not add any houses or apartments as vacation rentals in residential areas, and would limit home-sharing B&Bs to 1% of houses. Fines for not complying start at $1,000 a day. A plan for a reasonably limited number of vacation rentals with major attention on collection of taxes and other fees to support state and city infrastructure seems more useful.

Allowing platforms such as Airbnb and VRBO to collect GET and TAT would go a long way toward ensuring that all taxes are collected and remitted. To support the city, a larger portion of TAT could be earmarked for this purpose. Also, fees for annual registration and possibly increased property taxes for owners who earn over a designated amount each year would help the city maintain community facilities such as parks and public restrooms.

The vacation rental industry is critical to maintaining the vibrant economies of Oahu’s many tourist-popular neighborhoods — and it will be severely impeded by Bill 89.

Helen Petrovitch, M.D., of Kailua, works for a nonprofit research institute.