Two bills on the table in Honolulu could remove thousands of Hawaii vacation rentals on Oahu including Airbnb, VRBO/Homeaway, Booking.com, and others. Under consideration today, both measures 85 and 89 seek to limit rentals under 30 days outside of designated areas. It is estimated that there are nearly 10,000 vacation rental units in Honolulu. With some form of regulation destined to pass, here’s the latest update.
We have stayed at many Hawaii Airbnb rentals ourselves on Oahu, which as far as we know, were all within designated rental areas. Hawaii vacation rentals offer the distinct advantage of frequently better value and more options, kitchen facilities, and an opportunity to not be confined to a hotel block. At the same time, we recognize that vacation rentals can remove important long term rentals and, we know personally that it isn’t pleasant to find rentals in a neighborhood where those are clearly not legal.
One of the bills would create strong enforcement, while providing an opportunity for other residents to seek court action for illegal Hawaii vacation rentals. The other bill has a different and less divisive focus. It makes rentals where owners are present (typically called bed and breakfast) easier, while making non-owner occupied rentals more difficult through greater penalties for those that are illegal.
Here on Kauai, the county cracked down years ago on illegal rentals through use of high technology including Google Maps satellite imagery, and other tools they acquired to corroborate rental listings with specific residences. Owners were then notified that if their rentals were not immediately removed, among other things, they would be subject to increases in property tax of up to 300% which would also be retroactive multiple years!
Airbnb says that pending Hawaii vacation rental bills will adversely impact the economy. “Instead of bringing short-term rental rules on Oahu into the 21st Century and addressing market realities, Bill 89 would largely destroy the alternative accommodations market outside of the resort zones and inflict significant damage on small businesses and the local economy.”
The reality is that the cost of living in Hawaii is so high that residents use Hawaii vacation rentals in an attempt to make extra money just to be able to live here.
In a related court case last month, the Ninth Circuit Court of Appeals affirmed Santa Monica’s vacation rental ordinance, in spite of challenges from both HomeAway/VRBO and Airbnb. That ruling affirmed Santa Monica’s right to regulate vacation rentals to ensure adequate long term rentals for residents.
Kauai, Maui and the Big Island have all approved measures in order to to help regulate Hawaii vacation rentals. Yet at the same time, the State of Hawaii’s recent request to obtain Airbnb’s receipts to check on taxes was denied. At the same time, current issues around tax collection appear to have been largely addressed, leaving the terms of rentals, and rentals in areas outside of transient rental approved zones as the primary issues.
Hawaiian Airlines chimed in on the controversy as well this week, stating in testimony that they believe the industry is essential but needs better regulation. “Short-term rentals within and outside of resort districts have become an expected part of the accommodations inventory in a tourism market, and a well-diversified portfolio of accommodations is an important part of a long-term, sustainable tourism strategy…. Limiting the number and location of short-term rental units should be part of a broader and wider conversation about well-managed tourism.”
We await your take on Hawaii vacation rentals.