Two bills up for final votes by the Honolulu City Council next week could destroy the short-term rental market and deal a serious blow to the visitor industry, according to the companies that own the websites where the bulk of the state’s vacation rentals advertise.
Airbnb’s public policy manager, Matt Middlebrook, sounded the alarm Tuesday, a day after the Council Planning Committee moved out two bills that would likely flip the vacation rental industry on its head.
“These overly restrictive proposals will limit the ability of Oahu residents to share their homes and completely eliminate vacation rentals on the island,” said Middlebrook. “Such policies not only hurt local families who depend on this extra income, it will also drastically reduce overall visitor accommodations on the island.”
Philip Minardi, who heads policy communications for Expedia Group Opens in a new tab, also said the bills were too restrictive. Expedia’s companies include vacation rental booking platforms Vrbo Opens in a new tab and HomeAway Opens in a new tab.
Minardi urged Council members to postpone the May 8 date for voting on the two measures. “The proposal, in its current form, will not only impact the local travel and tourism economy, but countless responsible homeowners and small businesses that have come to rely upon Honolulu’s vibrant
vacation rental ecosystem,” Minardi said in a statement.
Jim DiCarlo, who owns a cleaning business that works with vacation rentals, said the Council bills are “one-sided and shortsighted.” The proposals could jeopardize thousands of jobs held by Oahu residents and cost the state and city governments millions in tax dollars that would go to other destinations more friendly to vacation rentals, he said.
DiCarlo, a member of the Oahu Short Term Rental Alliance, said city officials need to recognize that vacation homes are the future of the visitor industry. “Keeping tourists corralled in high-tourist traffic areas is unrealistic and is indicative of muddied lobbying by hotel industry executives who want to create higher demand and increased rates,” he said.
Bill 89 (2018) Opens in a new tab, one of the bills
up for a final vote next week, would allow for an estimated 1,715 new vacation rentals across Oahu to receive permits. But those permits would be granted only to those who own and live in the home they’re renting, leaving “whole-home” vacation rentals in the cold.
What’s more, there are an estimated 8,000-25,000 vacation rentals on the island, so even if the permits were made available to whole-home units, the vast majority of vacation rentals would not be able to become legitimate.
Both Bill 89 and Bill 85 (2018) Opens in a new tab clamp down on illegal operators by requiring any advertisements to include either the street address of the property or a certificate number (which would apply to about 816 operators with nonconforming use permits issued up through 1989).
The two bills are supported by a diverse coalition including the American Hotel &Lodging Association and local hoteliers, the Unite Here Local 5 hotel and restaurant workers union, and the Hawai‘i
Appleseed Center for Law and Criminal Justice.
A March 2018 Appleseed study estimated there are 23,000 vacation rental units and that as many as 93% of them are whole-home operations.
Kekoa McClellan, a representative for the hotel association, disputed the claim by the vacation rental industry that the business is made up largely of small-scale local operators.
“The vast majority of these rentals are not coming from Tutu Kane renting out his back room,” McClellan said. “The vast majority of them are coming from whole-home rentals.”
One independent study showed 27% of total revenues generated by hosts with 20 or more units, he said. “That’s not home-sharing, that’s an illegal hotel dropped in the middle of a neighborhood.”
