The Hawaii Legislature is considering two bills related to short-term rentals: Senate Bill 2919 and House Bill 1838 would allow counties to effectively ban legal short-term property rentals. Hawai‘i Realtors does not support illegal actors, but these bills would not give counties more power to address illegal rentals. Rather, legal short-term rental operators would be impacted. Due to potential negative social and economic consequences, Hawai‘i Realtors strongly opposes these measures.
There are many misconceptions regarding legal short-term rentals in Hawaii. First, they are not just for vacationing tourists. They are also a vital resource for Hawaii’s families and workers, fostering community connections and contributing to a thriving local environment.
Lengthy hotel stays are often prohibitively expensive and impractical. This creates a barrier for mainland-based family members who wish to visit to care for loved ones. Legal short-term rentals provide a cost-effective, welcoming environment, allowing ohana to stay connected.
For those who live here in Hawaii, legal short-term rentals provide a convenient place to stay while their homes are uninhabitable due to damage, fumigation, renovation or between moves. Legal short-term rentals also provide an affordable option for construction workers, farm laborers and other seasonal employees who need a temporary place to live while working on other islands.
The same is true for visiting health care workers. With a reported 4,000 vacancies in the field statewide, our residents rely on traveling nurses and other medical professionals to close the gap. Eliminating legal short-term rentals could discourage health care workers from working here, and potentially make it even more challenging for our residents to get the medical care they need.
Many local families who provide legal short-term housing rely on their rental income to help pay hefty mortgages and secure financial stability. For some, losing this income will make it impossible to stay in their homes, especially kupuna on a fixed income. Legal short-term rentals also provide income for those who provide services to these homes, including property managers, cleaners, contractors, landscapers and maintenance vendors.
Some proponents of SB 2919 and HB 1838 argue that eliminating short-term rentals will alleviate Hawaii’s affordable housing shortage. But this is simply not the case. The true cause of our affordable housing crisis is onerous regulations, excessive red tape, and high building costs that make it difficult for developers to build new homes at the right price. Data from the University of Hawaii’s Economic Research Organization (UHERO) Hawaii Housing Fact Book confirms Hawaii has the most expensive housing in the nation and the total supply has not grown significantly. This is primarily attributed to the most restrictive housing, including lengthy permit delays, land use restrictions and legislative hurdles.
Hawai‘i Realtors strongly supports the provision of more affordable housing, but it must be the appropriate type of housing to best serve housing needs. For example, a studio or one-bedroom located in the heart of Waikiki would not be an appropriate home for a family of five.
Loss of revenue is another drawback of SB 2919 and HB 1838. Because legal short-term rental owners pay real property, general excise and transient accommodation taxes, phasing out these properties could have significant consequences for state and county budgets.
Our group opposes all illegal rentals. We advise our members and clients to follow current laws. Unfortunately, some property owners routinely violate these regulations. Rather than penalizing the legitimate small business owners who provide legal short-term rentals, the state would better serve its residents by cracking down on illegal rentals. SB 2919 and HB 1838 do not address this concern. Counties can already create and enforce reasonable regulations for this industry. Enhancing those efforts would be a much more effective use of government resources.
We urge our state legislators to preserve Hawaii residents’ right to own and operate existing legal short-term rental properties by voting against SB 2919 and HB 1838.
Julie Meier is 2024 president of Hawai‘i REALTORS®.
