Hawaii lawmakers are pushing for a phase-out of short-term rentals to tackle the state’s worsening housing crisis. Two bills, HB1838 and SB2919, have garnered support and would empower counties to regulate and limit short-term home rentals. These platforms, such as Airbnb, have seen a surge in recent years across Hawaii’s populated islands. However, the issue of regulating short-term rentals has been a challenge for many cities and states, including Los Angeles, New York, Nashville, and Bozeman, Montana, where officials have sought ways to balance economic benefits with local housing needs. In Hawaii, the urgency of the housing crisis was brought to the forefront by last summer’s Maui wildfires, which displaced thousands and exacerbated pre-existing housing shortages. Proponents of the proposed legislation believe it will help ease the crisis by freeing up more long-term housing options for locals. The bills would give counties the authority to change residential zoning, including phasing out short-term rentals in specific areas. However, it’s important to note that if passed, any phase-out would not happen overnight. County officials would need to adopt new regulations, and the process would likely take several years. The bills provide the legal framework for counties to limit short-term rentals in various ways. In Honolulu, officials attempted to redefine the length of a short-term rental in 2022, but a federal judge ruled that current state law prohibited such action. Representative Luke Evslin, chair of the House Committee on Housing, acknowledges that the legislation, if passed, will not eliminate short-term rentals entirely. Instead, it would allow local governments to designate areas where tourists can rent short-term units and prioritize housing for long-term residents. While the bills have garnered support from housing nonprofits, hotel companies, and local leaders, they also face opposition from homeowners who rent out units, Realtor groups, rental alliances, and rental platforms. These groups are concerned about potential financial losses and the impact on property owners’ rights. Airbnb has expressed concerns and hired former Hawaii Attorney General David Louie to argue against the bills, citing potential legal challenges. However, Evslin maintains that the bills are constitutional, though he acknowledges the possibility of legal battles if counties implement phase-outs. Despite the ongoing debate, supporters of the legislation, including State Senator Jarrett Keohokalole, emphasize the need to address the issue and prioritize local residents. “We’re seeing the wholesale conversion of residential communities in Hawaii to speculative, short-term rental development,” Keohokalole said. Governor Josh Green has also expressed support for the bills, stating that the vacation rental market should “be for our local families.” A majority of short-term rental owners are non-residents, according to the governor. The bills have advanced through the respective chambers of the legislature and are now in a conference committee, where they could undergo further changes before a final vote. The legislative session ends on May 3rd, so any final decision on the bills must be made before then. Evslin remains optimistic about the legislation’s chances of success, citing broad support within the legislature. If passed, the decision on whether and how to phase out short-term rentals would ultimately lie with county leaders, allowing for localized approaches to address the housing crisis.
Hawaii Lawmakers Target Short-Term Rentals to Address Housing Crisis
