After much debate, Bill 89 was passed last night, and with its support of the Honolulu mayor, will soon remove thousands of Hawaii vacation rentals on Oahu including those from Airbnb, VRBO/Homeaway, Booking.com, and others. Here’s the latest update and what you need to know.
The new law differentiates between owner occupied bed and breakfast homes and vacation rental units where the owner is not present. It will limit rentals of under 30 days outside of specifically designated areas. It is estimated that there are nearly 10,000 vacation rental units in Honolulu. With this just unanimously passed regulation, a huge percentage of those may soon go off-line.
The bill permits another 1,715 owners to rent individual rooms within their residences, but not entire dwellings. Whole property rentals will still be allowed, but only in designed resort areas of Waikiki, Turtle Bay and Koolina. The bill also permits officials to direct vacation rental companies to remove those listings which do not display a valid vacation rental number. We were unable to determine, for example, how a separate guest house on a property where the owner also lives, but which is not within a designated resort area, will be treated.
A second bill also passed, which introduces files of $1,000 for the initial offense and up to $10,000 for additional violations. It also bans all vacation rentals outside of resort areas.
Airbnb had said that the 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.”
In San Francisco, a new related law permits rentals where the host is not present to no more than 90 days each year, with violators subject to a daily fine of $484.
Vacation rental managers, whose units are typically within designated areas, stand to gain by this new law. Obviously hotels will benefit as well.
We have enjoyed staying at many Hawaii Airbnb rentals on Oahu, which we believe were all approved rentals. 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.
Another 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.
On Kauai, a crack-down years ago on illegal rentals included use of high tech including Google Maps satellite imagery, and other tools 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!
In a related court case in March, 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.
Hawaiian Airlines previously chimed in on the controversy, 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.”
Beat of Hawaii suggests that you look for a TVR (transient vacation rental) number associated with your Hawaii vacation rental. That’s your assurance that it is legal.
Updated 6/18/19.
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Natalie M. says
Hello,
Are the rentals in the Ilikai still legal?
Natalie
Gloria B. says
I am a little confused about short term rental in Waikiki. We usually come for 10 days in January and stay in a condo 2 blocks off Waikiki beach. The owner notified us the other day that he will be forced to sell his property because of the new law. Reading some of the above information not sure what happens in a resort area. I understand the neighborhood out of resort area. Please clarify for me and can I rent for 10 days in Waikiki. Maybe the owner is confused. Hope this is still allowed . Thank you
Beat of Hawaii says
Hi Gloria.
We are not in a position to speak to your rental specifically. If it is a legal short term rental you are fine, if it is not, then there may well be an issue. Legal rentals have a transient vacation rental number. This should be clarified with the rental manager/owner.
Aloha.
Kealoha says
Go to Hawaii Property Rights Association on Facebook. Vacation rentals aren’t going anywhere. The govt’s actions are unlawful and not protected under the state and federal constitution.
Bill B says
In March I signed, in good faith, a rental contract for a house for a family reunion over Thanksgiving. Recently, after finding that the property had been removed from the rental site, I made inquiries of the site, the property manager and the owner as to why it was removed. I was told simply,”they [the owner] no longer wished to rent” but was assured that my rental contract would be honored. After a subsequent inquiry, I was told about a “new” Honolulu ordinance, effective August 1, restricting rentals like this had been passed but received further assurances that my rental contract would be honored. Assuming I rely on those assurances, what is a renter’s liability should an inspector/enforcement person shows up and determine that an illegal short term rental is in place? Thank you.
Beat of Hawaii says
Hi Bill.
Sorry to hear about your issues and concerns. Unfortunately we don’t know the answer to your question. Our thought would be to first contact the county or the Honolulu mayor’s office to get pointed in the right direction.
Aloha.
Victor says
Is the Aloha sprit dead? I try to spend a week in Oahu once a year but no longer feel welcome. I am now eighty three years old and not able to afford a thirty day vacation in Hawaii. What a shame.
Megan says
Aloha! Thank you for this article, as it clarifies the new rulings. It is a fact that real estate has gone up dramatically on Oahu. However, I think it would be better not to throw out the baby with the bathwater in regard to short term rentals in residential communites! We depend on tourism to have a thriving economy. Why not crack down on out-of-state investors who don’t live on their properties at least a certain percentage of the year and who are not registered as Hawaii residents on their state tax documents (allowing for retired residents with more than one home). In addition, the tax dollars from any rentals in a town should be managed by that town so the citizens have a direct benefit and can make improvements and repairs to their communities as needed, making the space benefit tourists and residents alike. No one sees the impact of the vacation rental market in a town more than its residents. What resident would want to see their town and beaches deteriorate when the income from that is not readily available to address that impact? As residents, we enjoy the restaurants and the thriving shops, and we would love to also see the parks, beaches, and roads taken care of by those tax dollars. We could also have better control over how many rentals our community can support.
SHERRY D says
If I rent my property for 30 days or more do I need a TVU permit. If not how does someone know if it is legal or not?
Mahalo
Sherry
Beat of Hawaii says
Hi Sherry.
Suggest checking with that department to be sure. By our read, it is not required.
Aloha.
Donna K says
Is this effective immediately?
BT says
Thanks for the information, Canceling our family reunion. Floridians are cheering.
Marilyn R. says
What determines the “designated area” around the Turtle Bay Resort. We live in the community of Kawela Bay and it is right next door. Would that make our vacation rental legal for 30 day rentals?
Julianna says
We are also wondering how far Turtle Bay’s ‘resort area’ extends. This is really going to affect everyone who comes for the Triple Crown and the surf season as well as the businesses in Haleiwa.
CARMEN says
We go to a Hawaiian island almost every winter. We use a timeshare. I don’t think this will affect us.
Buddy says
This is a tough decision for Hawaii. Restricting short term rentals will impact tourism to some degree, which will also impact tourism dollars flowing into the state. Hawaii is so dependent on tourism for its economy that this is a slippery slope. Laws of supply and demand will then raise prices during peak periods for those rentals (VRBO and hotels) in the impacted resort areas where short term rentals are still legal, impacting tourism again. HOWEVER, this should help a little bit to moderate the cost of housing outside of resort areas as owners can’t use short term rentals legally as income. So yes, tourism will be impacted, but perhaps moderated by dampening the insane increases of housing outside of resort areas. That said, I think this “all or nothing” approach is flawed as the article hints at, and a smarter approach is out there. Mahalo for the article! LOVE Beat of Hawaii updates and articles to keep me informed!
Beat of Hawaii says
Hi Buddy.
Thank you!
Aloha.
lori says
Thank you for the latest info. How do we see if our Airbnb has a TVR? I have already paid for a rental for next year during peak season.
Beat of Hawaii says
Hi Lori.
We’d suggest you contact the rental provider directly to inquire. Let us know how it goes.
Aloha.
Colin says
As a tourist visiting from the UK I am concerned this may see an increase in accommodation prices due to less competition but, it does seem like the right thing to do for genuine Hawaii residents imho. After all, if you get people buying property simplybto rent out then doesn’t that inflate property prices in genuine neighbourhoods and make it more difficult for people living and born on the islands to get on the property ladder?
If that is true, then I’ll happily pay extra to visit this amazing part of the world and experience their fantastic hospitality again. Just might take a little longer to save for the experience.
Greg D says
Sad to see that Hawaii politicians are corrupt and only support big business. I finally made it back to Oahu after not visiting for 30 years and enjoyed staying in an AirBnB in Hawaii Kai. It made me feel like I was actually living on the island and not just visiting. I enjoyed hanging out with the locals and eating at all the restaurants not near the tourist areas. We have great respect for the islands, our neighbors, and would love to do this every year. I will not come back to visit if I have to stay in a hotel in a tourist area as it is not my idea of a vacation being next to noisy drunk hotel neighbors.
Trish says
This makes me very sad. We have been travelling from Canada to Oahu’s west coast (Makaha) for 15 years and have never missed a year. We stay there to feel a part of the community, in fact we wanted to start to give back to the community by helping the homeless and the community by staying longer but this isn’t going to be the case any more. We will be taking our money and traveling elsewhere now. We will greatly miss this beautiful Island.
Julianna says
Can you please clarify if possible, does the law ban all rentals outside of resort areas even for 30 days or more? Do rentals of 30 days or more also have to have have a license? Thanks.
Beat of Hawaii says
Hi Julianna.
From our read, rentals of 30 days or more are not a part of this change and thus would not be restricted.
Aloha.