This strikes at the fears of visitors who have preferred Hawaii vacation rentals for decades.The battle heats up. Where do you stand?
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140 thoughts on “Controversial Move to Ban Hawaii Vacation Rentals Proceeds”
I run a hosted short term vacation rentals. The people coming to my place spend on tours, csr rentals and restaurants. None of them would come to Hawaii if they had to pay the ridiculous hotel prices.
The default solution in Hawaii seems to be imposing more taxes on residents and small business owners. The approach is akin to a death by a thousand cuts for tax-paying, voting residents, favoring hotels that can build unrestrainedly, offering low wages, and forcing people to work multiple jobs just to scrape by. As relentless taxation continues, residents are compelled to move out of state. Small businesses are stifled in favor of large, multi-billion-dollar mainland corporations. There’s a common belief that the hotel industry aims to monopolize tourism revenue, offering minimal wages and benefits to locals. In contrast, short-term rentals provide income and employment for local families and vendors. Ban hotels instead.
I think it is important to note that not all hotels are owned by the brand and money is not necessarily funneled back to the mainland, for example the Grand Hyatt Kauai is owned by Kawailoa Development which is a subsidiary of a Japanese company.
Just enorce the bills already passed = problem solved and the billions of dollars that come in from short-term rentals to benefit the State continues. A minimum 90-day rental will cripple the State’s economy, especially on Oahu where monthly rentals are critical.
Ok, well if Hawaii needs housing, and looks to a government takeover of rental properties, does that mean they will also take over Time-shares? Aren’t they essentially condo’s with multiple owners? How is that different than a condo owner who rents out their unit on AirBB??
Why stop at single owner units?
I am not in favor of the government getting into my life any more than is called out for in the US constitution, but I can justify them imposing additional taxes on second homes or homes purchased as an investment in the rental market. Remember, the ability to deduct the interest on a second home was introduced long ago in order to allow members of congress and the government to have homes in their home state and DC. So there’s that.
It should be all about keeping the playing field level for everyone. Problem is, money from special interests is paid in order to carve out exceptions to Every. Single. Place, where desirable parcels of land exist. Rich people don’t like rules and they pay to exploit them.
Most of the vacant land on O’ahu belongs to the military, or is zoned agricultural. Hawaiian Homeland is for Native Hawiian domiciles, not tourists. Bishop Estate/Kam Schools land is hotels and stores mostly, although there is some effort to address the housing shortage of late. Most vacation rentals have been illegal on O’ahu for years, despite what ‘hosts’ say. It’s no fun having outside, absentee investors buy up the residential properties in your neighborhood and turn them into hotels. When its just a few, okay. When its 40% of your lifelong neighborhood , enough. Hard to have Aloha, when tourists act like everything exists for their vacation pleasure. This is not a theme park
It is important to the economy of Maui that this site provide a positive outlook on vacationing short or long term in Maui. When I read this, it scares people away! How about publishing articles about how many people are gainfully and happily employed at short term rentals. What would happen to them if these are shut down? Bring people in!
In summary – restricting vacation rentals in some parts of some islands may result in some of those properties becoming long term rentals or being sold to people who will live in them.
But how do you tell an NUC permit holder (legal since 1980) that they can no longer rent short term (to help with affordable housing supply), while allowing the timeshares and hotels built in 2010 to continue?
How are there 5 new boutique hotels in downtown Honolulu, and one new hotel in Kapolei, while the government threatens STR owners?
This could be handled better.
Well there goes my plans for returning home anytime soon, if these stupid bills go through! I have a family of 12, including children. We would rather stay in an AirBnB or VRBO. We are all together under one roof ~ and not scattered in rooms in a hotel.
Well, there will be lots of lawsuits, especially with the state trying to tell people what to do with their properties.
The housing shortage for local residents will not be solved by banning short term rentals. Hawaii is a state whose economy is driven by tourism!
Actually, it has been proven in Tahoe, CA. They limited permits for short term rentals 2 years ago and now housing costs have gone down a bit and locals are able to get housing. What did you do prior to there being houses to rent everywhere? How will it not solve the housing crisis? If there are 300,000 short term rentals, that’s 300,000 houses for people?
I want to push back against this Tahoe narrative.
It did, indeed cut prices, for a very short time. Then the tech bros from San Francisco took advantage of the low prices to scoop them up as second homes.
Now more than 40% of Tahoe’s housing inventory is simply vacant 50 weeks a year.
If we want more housing here in Hawaii the answer is very, very simple – Build More Housing. It isn’t vacation rentals keeping housing costs high, it is overbearing, corrupt and incompetent planning and permitting.
I always laugh when people say “we can’t build our way out of the housing crisis” it is like people saying “we can’t simply grow more food to get us out of our famine”.
Exactly right… someone else made a similar observation that if housing did become available from converting STR rentals to single family housing, the housing would still be too expensive for locals and would be bought up as second homes.
The Bay Area people moved to Tahoe in droves and bought second homes 2020-2022. Which drive the $600k home prices to over $1m because of bidding wars. Thinking they could just use it at a vacation home and airbnb when they aren’t using it. Now they are stuck because they paid too much for the house that they helped drive up prices. The County just put the ban on rentals in 2022 and it has helped significantly. Another round of limiting permits is coming. There is no room to build in Hawaii…not sure how you can build out of a housing crisis. Especially when there wasnt a big housing crisis prior to airbnbs, or the government printing a lot of money, or big corporations buying up homes (Marriott, etc)- and our population has decreased.
Hasn’t anyone looked out the window of their plane when flying over each island? There is not only a lot of land but the Queen gave the state 1000s of acres for her people of Hawaii. Why the heck has it taken over a century and the state has not offered up the land? This is a distraction. Rather than loss of tax revenue and chaos the state could start giving up land that isn’t theirs and put in utilities build homes! The problem is our government!
Sonja, I’m willing to listen to you. What exact county are you talking about? There are several in the Tahoe area. Do you have a link that supports what you are saying? I spent an hour or so looking for “2022 Tahoe short-term rental ban”, and could find nothing.
Please provide a link that outlines this ban and the results you have indicated (i.e. everyone owning an STR is now “stuck”, locals can now afford housing they previously couldn’t before the ban, etc.). I’m willing to learn, but everything I am reading is contrary to what you are saying.
I really wonder sometimes where people get their information. Do they listen to word-of-mouth from someone else and then just regurgitate it?
As Joshua said, the home prices went down 2%, and promptly went up 42%. People just scooped up the available housing, and now those houses sit empty. Here’s an article about it:
finance.yahoo.com/news/airbnb-investor-rips-south-lake-203000294.html
Banning short-term rentals in desirable vacation resort areas does Not make housing affordable for locals. That is what has been proven.
I agree with both you and Kim.
Kim makes a very good point about land… I just don’t see where a shortage exists.
I know from my 40 years in So. Kohala that the locals will not be able to pay the rent of these thousands of units-even working 3 jobs. Something isn’t right here-follow the money in most government decisions.
Private equity jumped on STR’s as a way to generate higher returns for their big investors, such as state and union pension plans. They are the players that own thousands of houses nationwide and in Hawaii. It is not a local family or auntie who rents out a condo or house who is creating the problems we see. If permits were given out one per household the problem could be solved.
Agree. They did that here in San Diego but then it became clear that there was a loophole regarding definition of resident or occupant which allowed one owner of over 100 homes to pay people to say they were owners and/or occupants, and that allowed this one person to keep all of the homes they owned. Obvious point is that the measure language must be crystal clear.
Anyone wanting to kill the Golden Goose should be prepared to have their GET and property taxes increased to make up for the loss of the GET, TAT and HCTAT that will no longer be generated. How much are You willing to pay to bankrupt vacation rental owners? Envy is a terrible thing
Hawaii has had short term rentals long before AirBnB. We are Not SF, LA, Paris, London … in fact … Big Island Is Not Maui, Kauai or Oahu. East Hawaii Island doesnt have Any hotels, resorts ot places for tourists other than vacation rentals. Puna needs vacation rentals to feed wha little economic inflows we might have, as we have SO few job opportunities or ways to support ourselves. A state bill, or even County Bill 121 is over reach and None of the reasons given for such heavy handed legislation Does Not Apply to East Hawaii Island.
This is all over reach by the government pandering to the politically popular mantra or Kill Vacation Rentals.
Its time to vote in sensible law makers, November is coming up quickly!
Question? The Governor is willing to pay out crazy money and cut taxes to homeowners that rent to fire victims. What if a homeowner sells to a fire victim?
My guess is this will bite Hawaii’s backside hard. How are they going to essentially reduce the price of dwellings so that someone on a service-economy wage can buy it? And if you don’t have tourism, what economy will you replace it with? I think, too, that this may fall under a challenge under the Constitutional prohibition against “takings” of property without compensation. If I own a house that I can VRBO and make X and because of that is valued on the Market at Y; if I am forced to sell it at a lower price to a local is not my property taken?
Hal,
While I agree with the first half of your comment, Hawaii cannot force someone to sell anything, let alone at a specified price and just to “a local”. It was fear of takings lawsuits that caused Kauai to grandfather in all of the STRs operating in non VDAs back in the mid 2000s. Not sure what is going on on Oahu since they unilaterally revoked STRs in non-VDAs.
BOH… it might be worth writing an article on hotel chains offering vacation home rentals, this seems to be a more recent development.
hyatt-homes-and-hideaways.com/rentals/results
I wonder how this will affect inventory and passing legislation to restrict vacation rentals, additionally locals might want shift some focus to major hotel chains now investing in this market. This goes well beyond individuals trying to invest in a vacation rental.
Last… I would like to echo what MJ said, I don’t think limiting or converting vacation rentals in desirable areas will create affordable housing or long term rentals that locals can afford, I think low cost housing needs to be built that is income based.
This right here is why we have a “housing crisis”. How can a normal home buyer compete with a company who can throw down $1m and outbid everyone, (increasing the comps in the area) just so they can add to their inventory and the house sits empty most of the time? And while I do not like any government encroaching on things, they really need to stop mega corporations from doing this, especially on the islands. Have you seen the Marriott vaca homes? They have rentals in residential neighborhoods in non-tourist areas in CA. No wonder Hawaii and CA have a huge homeless population. Tahoe limited and revoked vacation rental permits and it has helped locals. HI needs common sense leadership to balance community needs and tourism.
Yep… it looks like Hyatt is doing the same thing as Marriott, and if they are doing this, you know Hilton and others are or will be doing the same thing.
Just in case anyone didn’t visit the Hyatt site above, these are not all condos, there are single family homes that they are renting as well in the newer development by the shops at Kukui’ula. It will be really interesting to see how this plays out. I have to wonder if Hyatt was an investor in this development.
Banks are buying up properties and vacation rentaling them out. I tried to book some condos for Maui and Coldwell Banker had a bunch of them. Something stinks here.
Coldwell Banker is a real estate broker and management company, not a bank.
I am a little confused by your comment. Coldwell Banker has a division called Coldwell Banker Island Vacations. It is based in Maui, so the bulk of their short term vacation rentals are there. They also have a presence on the Big Island, and are growing on Kauai. All individual owners. I know, because our condo is listed with them on Kauai.
Coldwell Banker is a real estate company. They manage vacation rentals.
Banks may be buying str units. Or the buyers could be individuals.
Attempts to infringe on your 1st & 2nd amendment rights are ongoing from federal, state and local governments. Now Hawaii wants to infringe on your property rights. These legislatures are beyond clueless. This will never hold up in any sane appeals court. Plus, this doubles down on the incompetence of the Hawaiian government (i.e., no land management program) that allowed the Lahaina tragedy to happen…
Most often, when government tries to fix a market place problem it only worsens the problem with unintended consequences.
Regarding the housing shortage for locals: state and local governments could begin by examining what part its laws and rules play in the housing shortages.
If the consequences are foreseeable, then they are not unintended.
I’m Back!
Quite simple: low income housing renters typically don’t rent in Waikiki (i.e.). This is clearly a move by hotel lobbyists to get a corner on the tourist business.
Another important detail is tourist’s desire for a kitchen in their rental unit. Show me an hotel that is offering this. I have to ask B of H guys this: when you travel overnight interisland do you want at least a kitchenette, or do you have the luxury of always eating out? My mate and I are on special diets so that is not a convenient alternative to making our own meals.
Bottom line is this: If these bills pass, will there suddenly be a flood of Affordable rentals into the Hawaiian locals’ Oahu market? Will Hawaii only be for the wealthy?
Hi MJ.
Some level of kitchenette is always desirable.
Aloha.
My kid goes to HPU and lives near the campus, Rent is not to bad
2 bed 2 bath, With all utilities included even parking $3100 a month
Anyone near there needing a 4runner I shipped her one from CA 18 months ago, 285k miles 2000 4 runner limited $3000
This makes no sense.
Any attempt to fetter property owners for political reasons will fail in court.
So what could be done?
Be more restrictive in zoning. Residents want to be in residential areas not tourist ones and they need properties they can afford to rent.
Additionally introduce higher fees and taxes on commercial developments and use the funds to build some of the right sort of good homes in good areas.
Time the politicians stopped being political and looked at how they resolve the real problems.
The biggest problem on Maui is the politics! As the population has grown in recent years officials have ignored the need for housing for locals. If they had planned ahead, they would have recognized and acted on this issue. Poor Planning (or complete lack of it) has ultimately caused this problem. Instead, they point the finger at those of us that provide an alternative to greedy corporate hotels and pay exorbitant taxes to support Maui public services and quality of life. If this ridiculous illegal ban passes, the island economy will implode and ultimately make locals much worse off without jobs! They should Not have to leave their beloved home, friends and family! From Paradise to Poverty!! Yeah, give us some of that …..Duh!
There would not be so many mainlanders that have moved to Hawaii if there weren’t jobs for them. Many locals have chosen not to work which has left opportunities for more mainlanders to move here. Even after the Lahaina Fire and the multitude of job postings, many locals are choosing not to work. Many locals work 2-3 jobs because employers won’t give enough hours in order to skate paying medical insurance. Here are some issues that could be changed. Don’t pay people not to work. Make employers responsible to pay medical and there will be less mainlanders and more financially stable locals.
Yes, I support the two Bills to limit or ban short term rentals. Something has to be done to help locals find affordable housing, whether to purchase or rent. The prices are outrageous! And saying this, even as I’ve used a VRBO on a few occasions.
Isn’t there more expensive areas to live in every state, beach area etc? It’s no different here. There’s plenty of land the state is holding into that belongs to the Hawaiian people to build on! The properties approved for STRs will never be affordable enough for the majority of local people. These bills will do more harm than good causing more job losses and people on welfare won’t be able to qualify to buy a shack. Why does the government want the people totally dependent on them?
The hotel “tail” is wagging the STR “dog.” They are coming for your rentals.
Aloha,
“Lahaina Strong and others demand action against vacation rentals.”
I read on this blog that “Lahaina Strong” was demanding the elimination of fifty two thousand (no typo) vacation rentals. I say again, given that there are approximately seven thousand Lahaina fire victims, that amounts to about 7 vacation rentals for every man, woman and child. Nice.
Mahalo
Ask Lahaina Strong for an accounting of where all their money went!
As far as affordable housing goes, I believe this situation could have been partially solved long ago if the State had put a moratorium on building luxury condominiums and gave the green light to build more affordable condos. I would be curious to know how many owner occupants live in these luxury condos vs investors. I’d also like to know what percentage of these investors are non-US citizens. Take care of the locals first!
Julie:
No one has stopped anyone from building “more affordable” condos, whatever that means (shoddy construction? small floor plans?; unpopular locations?). Developers don’t make any money off them, so they don’t do it. If the state wants to provide “affordable condos” then perhaps they can hand out money to people to be able to afford market rents, or the state itself could unwrite the construction, like fed Section 8 housing.
Julie, on Maui, there Is a cap on all short-term rentals (except hotels) in all zonings. Those regulations were passed in 2021. They can’t build anymore STRs, and new permits will not be issued. So anyone concerned that STRs will grow unabated doesn’t need to worry.
As I said above, they made an exception for hotels, which are also “short-term rentals”. They are allowed add to their inventory, and new, permitted hotels are also allowed. Perfect example of the government catering to the hotel industry.
No air bnb or VRBO? No more Hawaii vacations for our family! Honestly Hawaii has probably lost us for good now.
Hang in there Jim. There are many of standing up for each others rights now. We need and welcome tourism! The Governor lifted the ban on rentals but it is good that no new STR permits will be given. This should apply to the hotel industry as well. Don’t give up on us please. We appreciate you!! Many of us still fell aloha!
A majority of displaced people were renters. So, they had no investment financially but wanted to live in Maui. The solution is oblivious, just move to where you can afford to live.
Exactly!! Amen! Now they get free rent, food, utilities and don’t have to work indefinitely.
And think of all the jobs that building these affordable houses would bring to the residents who now work in the tourist trade. How about the Habitat for the Community program. Teach the skills and benefit from these solutions.
Aloha Rob+Jeff When I look at all that open beautiful green land with nothing on it, why can’t someone affordable housing benefit built upon it? There are acres and acres of vacant space on the islands. If it is Govt, Federal,County,etc, open up some parcels and solve the housing problem. Why does it have to be so difficult to come up with a solution? It’s right there in front of everyones eyes. To those who it may concern: Stop being So greedy and let’s work together to live together in harmony and peace. Is that so hard to do?
Here’s the questions I never see asked.
If this passes what’s the estimate on how far the values will fall on STW properties? Are they going to fall far enough for locals to afford?
And how many residents on Hawaii can actually qualify for a mortgage? Even if they qualify is there enough liquidity to fund all these new mortgages?
Also why as a business person would I ever invest in Hawaii when in a blink lawmakers can pass a bill like these that will wipeout my investments?
So they pass the bill values fall, but locals still can’t afford I see a new wave of upper middle class mainlanders coming in for the kill.
Spot on, Richard C. There will be a slight drop, but “locals” will still have to compete with mainlander money, which is impossible to do.
On Maui, values won’t fall. There are condo complexes here that don’t allow short-term rentals, and none of the new complexes allow them.
The prices are similar to the STRs.
Some are willing to pay extra for No STRs in their complex, just as others are willing to pay extra to be able to rent out short-term. The prices are therefore in the same ballpark.
Even if there were a difference in price, we are talking about prices of 1.5-3M for the majority of STRs. They will not magically be low enough for the average family earning 80K to buy, let alone the 87% of renters displaced by the fires.
Building new housing partially subsidized by the government (i.e. our taxes) is the only thing that makes sense to me.
PatG
Maui’s median home price rose to $1,303,692 in March of 2024, up 9.5% from 2023 when the median was $1,191,000.
Backs your comment.
Please share how you got that information? ℹ️ have read the median is 772,500. I’d love to know how you came up with your figures.
Kim L:
Redfin says median was $1.075M in February. IDK if this includes condos or just SFRs:
redfin.com/county/667/HI/Maui-County/housing-market
From Realtor.com:
In March 2024, the median listing home price in Maui, HI was $1.5M, trending up 4.9% year-over-year. The median listing home price per square foot was $1.3K.
The prices just keep going up.
And here are the sales prices:
In March, the median sales price for single-family homes on Maui was $1,303,692, compared to $1,250,760 in February.
Ok, admit it, everyone: the big hotel lobby has been successful in convincing their government beneficiaries that demonizing private owners is in their best interest. This is just another opportunity for a power play by the money holders to purchase state and local government support like the were street walkers in downtown Honolulu. Very sad.
Government needs to built affordable housing . For locals Only
Be careful what you wish for. I live 30 miles from Oakland, Ca and have seen firsthand what govt ‘affordable housing projects’ look like and how they transform a region.
Of course, we can assume you don’t want these units built in your neighborhood.
If the bill passes, (on oahu) the first thing the c & c of honolulu will eliminate will be the approx. 900 NUC permitted properties outside of resort zones. This is the “low hanging fruit”. The vast majority of residents already support this.
To help the hotels as tourism plummets, they will come for str properties in waikiki later.
When tourism goes down, unemployment goes up.
Wages will go down. So families will struggle even more.
Well and simply said. I can’t undertand why this isnt obvious to all.
We owned a time-share on Kauai, which we gave to our daughter and son-in-law. Wonder how these bans will affect the time-share industry in Hawaii?
Perhaps the real goal here is to create workable solutions to help Hawaii residents acquire housing. I mentioned previously that country or state incentives to build Granny Suites might be a welcomed idea.
Let’s not turn condos against single family home owners, non VDA owners, or non owner occupied owners under the bus. It’s very convenient to turn against the small business owner. The only beneficiary of this mentality will be the hotel industry.
Zoning for vacation rentals has been at the center of this discussion for years. Most states, particularly Calunicornia where I live, have government agencies whose sole mission is to preserve access to public spaces, have had those agencies sell out to major corporations and billionaires (that’s how all of those prime properties are owned by hotel chains and islands are owned by software inventors). So they aren’t even doing what they were chartered to do.
The question we need to answer is simple. Should a business/person be able to buy a property and do what they want with it. Or should zoning restrict how a person uses their property. I think restricting the use of STR’s helps everyone build wealth and support it.
For existing housing stock, it seems that folks selling to off-island buyers are equally culpable. If you own a home in Hawaii and wish to sell it for whatever reason, why not ensure the buyer is another local? Or does a quick pay-day trump all other considerations? Priced out of Hawaii? Your fellow neighbors share some of the blame.
For developers selling to off-island buyers, perhaps there is legislation that could put a stop to that – but not if aunty and unko keep getting donations and support that influence their votes.
I fail to see how a $500,000 to $10,000,000 2 bedroom vacation rental condo will help the housing crisis for local Hawaiians. Local Hawaiians cannot afford that. What Hawaiians will lose are their jobs created by the tourism industry – from retail jobs to the service industry. No income from jobs makes housing even more difficult.
What Hawaii should do is for the state to acquire land by buying and the use of eminent domain and to RFP/competition from real estate developers to build all sort affordable housing for Hawaiians. And to prevent the sale of huge amounts of land that will never be used for the good to the Bezo’s, Zuckenberg’s and of this world. They really don’t need it – it could be used for new local housing.
Does the local government think by banning vacation rentals, the housing market will suddenly drop to affordable housing rates. Is the government prepared to pay present housing prices, and then drastically lower them so as to make them ‘affordable’ for local families? One thing I’m sure that will happen is that thousands of people will not pay the exorbitant hotel rates and choose to vacation elsewhere. Might be a good idea if the government changed their perception of what is causing the problems and look at themselves in the mirror.
Aloha Jeff and Rob. I’m thinking someone has a plan with the legislation, and it won’t make winners of the locals. Let’s say people decide to get out of STR and offer houses for sale. The price may go down but still out of reach for the locals. Then a large corporation like Blackrock will swoop in and buy all of them at a bargain and raise the prices. The wealthy investors will have more wealth and Hawai’i will still have homeless. I don’t see a win-win. Mahalo.