Hawaii counties to regulate or ban vacation rentals via this landmark bill. This move intended to help fix the housing crisis, also underscores a major shift in Hawaii’s travel paradigm.
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223 thoughts on “Hawaii Clears Path! Counties Can Now Ban Vacation Rentals”
A nice deep recession will do far more to eliminate the housing hoarders in STVR’s than any government intervention. Real estate has a long history of boom-bubble-busts. This is the biggest bubble of them all.
26 States are already in recession, and the Fed signaled the other day that they are going to ease off on their quantitative tightening. Every month the jobs numbers are getting revised down greatly.
Last month 43% of All small businesses in the USA that rent could not make their full rent payment. 43%!! And the federal government is spending crazily with huge deficits to prop it all up.
Where STVR’s should be allowed and banned:
1. Areas zoned Resort – allowed. (It’s zoned that way for transient visitors)
2. Areas zoned Residential – banned. (It’s zoned that way for…RESIDENTS).
3. Areas zoned AG – banned. (It’s zoned that way for AG use)
The very first hotel condominium timeshare in Hawaii was built on Apartment zoned land in Maui and called the Hilton Hale Ka’anapali. Apparently the lack of zoning enforcement was an issue from the very start. Whose fault is that and does that mean it should now be banned from short term rentals as it was originally intended for?
Thank you Bill. This would make more sense but they still included properties in the hotel zone while some similar neighbor properties are safe. It seems the ones that fall under a hotel brand name are protected. Then again the Royal Kahana is Outrigger and is on the cut list. 7000 is drastic and will make a negative impact. Getting rid of the ones on your list and the illegals should give us what we need without causing the least amount of harm. Then put restrictions on new STRs.
Reminder, AirBnB has never existed through a jobs recession.
Airbnb and Vrbo charge both travelers and hosts high fees which appears as rent to the traveler. I saw guests Vrbo and Airbnb fees around 1000. For a week stay. I always encourage return guests to book direct to save fees on both sides. Airfare is still looking good. Even during a recession, even after Covid Hawaii has visitors. They are more careful spending money but they will still come. Return visitors keep your hosts contact info. You can pay via PayPal for your protection, and sign rental agreement via DocuSign. We still need and appreciate your support. There is no place like Hawaii. The visitors I meet each day are happy to be here. The negativity we read is scary
Bill, “remember”, short-term rentals have existed through MANY job recessions.
In addition, “remember” Airbnb was started in 2007 and went through the 2009-2012 recession.
I’m sure, myself and many others are Thankful for the memories of a Maui family vacation, pre- Lahaina fire. I have returned, post fire, in a vacation rental condo.
A relaxing visit but the obvious evidence of the horrific tragedy. We had already booked and paid for the trip. I was ready to cancel the trip if was going to cause any inconvenience or offense to the Hawaiian community.
I certainly understand the need to manage the whole ecosystem.
It’s a reality!
Best Regards,
Aloha
Managing the eco system includes locals doing their part. I refuse to put the blame on tourism and visitors after living here 30 years and seeing what happens here first hand. Almost all visitors I have met are respectful. This isn’t Las Vegas. We get visitors that appreciate the beach, sun and nature. We don’t have much else so of course that is who we draw. You will have the party people but most live here.
Why not just build more affordable housing instead taking away Vacation Rentals from Owners who already pay high taxes property taxes, insurance, TAT, GE and County TAT plus County Permits on STVR’s. This new rule is so backward!!!
So many comments here from visitors and STR owners who don’t understand how residents feel about STRs.
Too many non-residents only care about what they can get out of their trip and their investment. Too many tourists breaking rules every day, climbing over fences, parking in no parking zones, posing for selfies with protected wildlife, doing reckless things and trashing trails.
When you’re only here a week or two out of the year you don’t see the heavy toll overtourism takes on the islands.
The islands were coping quite nicely in the early 2000’s. If the visitor numbers drop back down to the levels at that time, 35% fewer, the Hawaii economy will be just fine, and the islands will be better place to live for residents.
I’ve lived here for 30 years. The message of trashing the island should be given to locals. Visitors aren’t bringing their old appliances and rusty cars, construction supplies and rubbish from the mainland. They’re not leaving in on the trails only 35” inch tires on lifted trucks can get to or bringing a dozen kids that are jumping on coral. I’ve seen more respectful visitors than locals especially the last decade. Druggies living in trees are locals.
Aloha,
I find it very interesting that you have lived in Hawaii for 30 years but obviously don’t consider yourself a “local”. The last census I saw showed about 10% of Hawaiian residents were of Polynesian descent. I would assume that the other 90% are transplanted mainlanders. When does one become a local; when they start abusing the place?
Mahalo
Gerry I do consider myself a local and you are absolutely right. I also have made friends with mainland owners and visitors than have been coming here every year for decades that love Maui. I believe that banning 7000 rental homes will hurt our island, will decrease jobs for us locals & blaming tourists & STR owners for all the problems is wrong. I believe the “locals” fighting for this law believe they are doing the right thing. I disagree with them & have tried explaining. I defend all our rights as a US citizen.
Sorry to break it to you, Peter, but it’s no longer 2000–this economy has put even basic necessities out of reach for many. Reducing or eliminating revenue for all ancillary services will not result in the economy ‘being just fine’.
This ‘I got mine’ nimby attitude will result in a major degradation of the quality of life on the islands. Citing a few outliers and painting all str tourists as miscreants is narrow minded and disingenuous.
Hate to break it to you Steve but I think there are enough locals, and their now off island family members, who are so fed up with the status quo that they will elect like minded politicians who will bring about significant changes to STRs.
Nobody can predict how those drastic changes will affect the local economy. But I think the locals are willing to take that risk. And I sense that mainland STR investors are scared, and painting doomsday scenarios, because they think that there is a real possibility that gheir precious STR investments might be actually be outlawed some day.
Its not only STR investors that see the writing on the wall. It is us local residents that see what this will surely do to our entire economy. It already is doing damage. Living off the state will not pay rent, utilities & food. We need jobs! All we have is tourism. Bring in other job opportunities first. Our savings disappeared with the Covid shutdown. Now jobless since the fire. We are now in debt & many of us need & want to work. Hotels will not work for families or stays over a week. They need space & kitchens. Many love & consider HI their 2nd home.
The land itself is expensive (it’s in very limited supply) then add in the cost of shipping building materials from the mainland. What would be your definition of “affordable housing”? A small house in Oahu can easily go for $1million+. I’ve really never understood the economics of living on the islands and have no idea how (unless you have a generational family home already) most people can afford to live there? 50Year mortgages?
This is a little off topic. But you are 100% correct about the cost of shipping building materials over from the mainland. I wonder why there’s no company considering 3-D printing homes over in Hawaii? The materials needed are sand, gravel and water. A lot cheaper than lumber, tile, and steel. Would be cool to have a house built of concrete that is composed of crushed up lava rock. The cost of printed homes are a fraction of conventional ones. Maybe this would lead to more affordable homes in Hawaii.
Great idea and business opportunity! Thank you for contributing to a solution and giving hope rather than adding to the problem. Thank you so much!
Thank you so much for your comment above regarding, “Hotels will not work for families or stays over a week. They need space & kitchens. Many love & consider HI their 2nd home.” You are right, anyone who is not a millionaire cannot afford to stay in a hotel for more than a week. I was blessed to discover Hawai’i in 2016 and I fell in love. I’ve been coming for 4 months each year ever since. My husband and I are working hard to make it our 2nd home, and I really appreciate that you don’t mind that I love your aina so much. Thank you for the welcome. It seems that anyone who “discovers” Hawai’i too late is left out in the cold, even by other transplants. Luckily, I stay in the same home every year, and my “neighbors” welcome me.
I’m not a speculator. I’m a long time resident homeowner. Maui is almost solely dependent on tourism. Banning STRs in residential areas is understandable but there is a reason for the bill to rezone. Banning in areas zoned for STRs will devastate the economy & reduce tourism in areas locals don’t want to live in. Fire victims are turning down condos bc lack of space, closets & tiny kitchens. Priorities are different. Young adults are driving 40-80k trucks no wonder they’ll never afford a home. This will leave us hardworking, educated locals that saved to buy a home paying for the losses.
Not all ,but many Hawaii locals inherited their home debt free through generational wealth. They too are contributing to the long term rental crisis by renting their homes as short term rentals
No one I know is switching to long term. They’re planning on a court fight or selling. This will hardly affect home prices and some condos that are in hotel zones will most likely be safe. Watching the housing sale and rent prices does not show a downward movement at all. Homes and condos that sell will most likely to go to those that can afford to wait it out. This was not a well thought out plan. Just a waste of time and in the meantime the decrease in tourism will screw us all. Very sad. I pray there is a karma!
I agree and I can’t help but think Green understands this… as others have commented, I think he is just trying to shift any real blame or decision making from himself to counties and at the same time appease locals. The long term negative effects may not be fully recognized for awhile and he may end up keeping voters happy in the meantime.
I suspect all that will happen is that if a percentage of STRs end up back on the market, they will just become second homes and will be out of reach for locals to purchase.
i own a condo on west side of the big island. It’s in the (V)vacation zone. There are 32 units in less than an acre and not any extra storage or parking at all. These units were designed and have always been used as vacation rentals, and they would make lousy residence, especially for couples with two cars.
It would be a big mistake to try to convert the units in the vacation zone to normal residences.
Hoping the counties can do a better job than the Governor- he needed a dirty sock stuffed in his mouth a long time ago. I’m hoping the mayors will be more in touch with community needs which means jobs! Visitors will still come even if they feel unwanted by the government, just like they did during the Covid shutdown. There’s no place like Hawaii. Good luck to those turning their backs on us and headed to Caribbean, Mexico and Tahiti. Also expensive, unsafe and more… Hawaii is still a US state. Mahalo to the loyal compassionate visitors. There are many of you! Timeshare sales are exploding. Better than hotel costs. Sheraton just raised rates 50% last week. They must know something.
An unintended consequence is that there will be a dramatic reduction in vacation rentals which equals less tourists and less tourist’s dollars being spent. Goodbye, to the local economy and jobs for locals. So, there’s a potential for increased housing but how will the locals pay for this rent once they get laid off because of a decline in tourism. I can see some STVR owners filing a lawsuit while others will just sell their properties. Governor Green took the coward’s way out and put it on the counties knowing full well the law stinks, yet he’ll be able to say that he tried to solve the housing crisis while the counties will bear the brunt of the lawsuits and egg on their face while Green keeps his hands clean.
Very true. Timeshares and condotels should be safe because most are owned by hotel companies which have been safe and benefitting all along.
Darin,
No foreseeable consequence is unintended. To the extent reduced tourism is a negative (not everyone thinks it is), then is just a trade off. Sure, less tourists = less jobs and less tax collections. But also less traffic and less demand for housing, since less people can live here because of the lost jobs. It’s genius when it think it through.
We are renting a condo at Kihei Bay Vista. We have done that many times. Is that going to be banned? It is hard to understand the terminology here.
Linda W.
So far the only thing that has passed is the state giving each county the ability to regulate STR through rezoning and/or current zoning enforcement. The information iñ this article only presents what’s been proposed, but not passed yet.
To answer your question, yes Kihei Bay Vista is on the list, it is zoned A1 (Apartments) and designed Mf (Multi-family).
Aloha.
Finally!
This is a sad day for Hawaii. Just wait until all the proponents see that passage of the bill does absolutely nothing to change the housing affordability crisis. All they had to do was to look at every single other community that tried to do this, and they can see what the end result was…. No change in affordability. The only winners here are the hotels which are all owned by mainland and foreign corporations. I’m just shaking my head at how shortsighted people can be.
Don’t forget the lawyers….those bottom feeders always cash in during these conflicts.
Ok Everyone: This sounds like a riddle but it’s a real question:
We rent condos on Maui for approx. 58 nights per year.
It’s difficult to find a single condo for 58 nights. We rent condo #1
in south Maui for 29 nights. We rent condo # 2 in west Maui for 29 nights.
Assuming that a STR is define as 30 days or less, my question
is: If I continue to rent for 58 nights per year, all 58 nights in
sequence, but in two different locations, am I a short term renter
or not, using 30 days or less as the definition of short term renter.
Chris
Seriously, this is a real question.
It wasn’t clear by your post whether you are the person renting or if you are the person that owns the condo. That being said, the owner could be required to change their booking policy so that people have to stay 30 days or longer. However, what we really are going to see is a whole development of an underground rental system so that the county won’t know what’s going on. it’s just like the Internet, how did he get going? How did it proliferate? You can’t stop it it’s gonna happen and it’s what drives the market and it went more underground to continue to make it available.
If the property you are renting is a minimum 30 day rental, then you are renting for less than the allowed period of time.
Note: All rentals less than 180 days are required to pay the TAT.
In your position, I would not worry about it.
If a landlord signs a lease for more than a month, the tenant magically has as all sorts of tenant’s rights, and it could take a long time and be very costly to evict them. So you are essentially a short term renter, because you don’t get the long-term rights.
Short term is anything less than 6 months. Hopefully you have the hosts contact info for an update.
Does this have any effect on Time Shares?
Initially, I would have said doubtful, but with the stupidity of our legislative body here on the island, it might at some point. What I really see happening is that timeshare values will go up because they’re gonna be the only legitimate alternative the counties really start working to ban short term vacation rentals
No, because timeshares are part of resorts and not condos and houses.
We just sold our timeshare weeks. I’m already regretting that. I dont understand how the government can tell people what to do with their own property. Is the government going to start making their mortgage? Or is the government going to subsidize these people the money they will lose? A VRBO can be thousands a month and now they’ll get hundreds? Or will they be forced to sell? I see a lawsuit in the making.
I was just thinking that timeshare owners should hang onto those units at least for now. I think it’s possible that they will see a bump in value. vacation rental property owners are not going to sell them for pennies on the dollar. They are still going to get market value and it’s still going to be more money than a local buyer can buy. If they can’t afford it and need to sell, I do see lawsuits happening. But the buyer of the property is going to be a mainland buyer.
There won’t be lawsuits until the counties actually start revoking permits. Speaking with the RE broker who manages our Kauai STR, she believes the county council will take a conservative approach to “amortize” NCU TVRs, such as not allowing permits to be transferred to a new owner whenever a property sells. But, who knows until it happens. There are only a little over 400 permitted NCU TVRs (meaning outside the VDAs) island-wide, and half of those are in expensive Hanaeli-Haena, so unless they also reduce VDA TVRs, there will be zero impact on the Kauai residential housing market. Maybe things are different on Maui?
The government can control your property under zoning laws. I remember when there were not many short term rentals in Hawaii and it was easy for a person to find a long term rental.
Goverment interference in the marketplace. Let the rolling disasters commence. Maybe Green will mandate EVs, Wind Turbines and Unicorns next to “fix” Hawaii’s other problems.
He needs to be recalled. He’s not doing what’s best for Hawaii. He is doing what’s best for his pocketbook and the hotels.
The Airbnbust is already underway. I see articles with quotes like this in places globally:
“In Palm Springs, a cap on short-term rentals in specific high-demand neighborhoods has all but frozen the market in those communities.
Sales are down. Homes languish on the market for months. And investors who bought up Palm Springs properties during the COVID-19 pandemic are facing hundreds of thousands of dollars in losses.”
Austin, Texas is getting blown up as we speak. Tons of speculation there. South Padre Island, TX, unbelievable amount of speculative STR’s coming to market and sitting empty.
And for every market that you post, that’s having an issue, there are 10 markets that are doing better. Hawaii is not Palm Springs. Hawaii is not Texas. Hawaii is not South Padre island.
You probably don’t live here
I have a hosted Vacation Rental on the big island, If I am forced to rent my house out rather than STVR, my self like mini will be selling their homes, not renting them. Unfortunately, the people that need to rent will not be able to afford to buy these homes so this new act will probably do nothing more than Exacerbate the housing problem, as the saying goes, if it ain’t broke don’t fix it, The key is to build more affordable housing not have more houses go up on the market for 6, 7, or $800,000 that locals cannot afford
You are like many others. With the county ignored (because they totally know it) is that locals here aren’t making money handover fist on vacation rentals. Sure, they invested wisely when they could. The economy of today is much different and the reality is, more than 58% of the population surveyed have stated that they could not buy the home that they own today, if they were looking to buy a home today I am with you, I won’t ever get along term tenant because most of the times they are awful and don’t take care of the property only short term rent
BOH should do an article on long term renter nightmares. There are so many, enough to scare any owner. It is happening right now. Properties are being destroyed and rents not paid for months. Then it takes forever to get them out. There will be more selling than renting. Even if prices drop, the average buyer here will not qualify or afford even low income housing. They will need to be subsidized.
Long Term Rentals is anything greater than 30days in HI. I’m sure you can find landlords with STR and LTR to talk about the damage when renters move out for both. It doesn’t take long for significant, expensive damage to occur.
I have both LTR and STR (none on the islands) and my experience is the longer someone stays there, the less likely they are to destroy a place they are living in. If getting people that don’t pay is a problem then that’s something the Sheriff is for (it becomes trespassing if the contract is written well)
I’ve been a STVR host since 2013. Because I vet my guests very well (I actually wouldn’t stay in my place if I were a guest with how strict and restrictive I am).
Before I began STVRing, I had annual renters.
The annual renters absolutely tore up my home and I ended up spending half of the yearly rent making repairs.
Suing in small claims court never got me anywhere. Because of this, I started STVRing. Airbnb charges guests if there is damage. Luckily, in all the years I’ve hosted, none of my guests ever damaged my home.
Unfortunately a 6, 7 or $800,000 house in Hawaii is at the lower end of the price range. Here on Oahu, houses in Mililani are starting to push over $1m for a regular house.