Throughout our travels in Hawaii and around the world, we continue to experience vacation rentals in many different ways. From approved rental properties in the Vacation Zone, we always choose to stay in private properties in the past where the hosts have asked us to be discreet. The latter type of rental currently gives legal ones a bad reputation.
Currently, Hawaii offers counties (islands) the opportunity to regulate or eliminate short-term rentals. Governor Green signed Senate Bill 2919 into law this week. Our readers have already expressed concern about the potential economic impact it could have.
“Think about these numbers (they are conservative): 7,000 units x 40 weeks = 280,000 visitors. If each spent $5,000 on vacation = $140 million flowing into the economy How will they make up for that loss? Tax us locals more.”
Comment from a Maui resident.
“On a recent two-week vacation, our group of 10 spent over $30,000. If we had to stay in a hotel, the total would be $0. We’re not coming.”
Hawaii traveler.
“I own an STR (short-term rental). Last year I paid about 20 million yen to the state of Hawaii. $15,000 in TA and GE taxes. I also spent about 300 yen. Housekeeping and $15,000 for maintenance. Multiplying either of these amounts by 7,000 units yields a very large number. The effect of this is the reduction in real estate taxes because the property is no longer subject to the vacation rental tax rate. It’s not included. Someone didn’t do the math.”
Short-term rental owner.
Governor warns of legal complexities of new private lodging law.
As noted yesterday, Governor Green particularly emphasized the importance of thorough bill drafting to avoid possible legal challenges and constitutional inconsistencies. In doing so, he highlighted the complex legal environment including vacation rental regulations in Hawaii and elsewhere.
In this regard, the ubiquitous commenter Arnie says:
“Lawyers are sharpening their nails, waiting for the first of many juicy tidbits and lawsuits. Greene thinks she can’t touch anything, but she can’t! Legislating an illegal process It’s an interesting trail of evidence leading up to the green. Will we get lucky with this?”
Hawaii vacation rentals in a global context.
Cities and regions everywhere are suffering from an increase in short-term rentals, which while boosting the tourism economy and choice, can also put a huge strain on local housing markets. In Europe, cities such as Barcelona, Amsterdam and Paris have already introduced strict regulations, including caps on the number of days homes can be rented out. These measures aim to maintain housing availability and community cohesion. Other communities are ready to join these efforts.
Vacation rentals in the United States have been widely curtailed due to legal and constitutional issues.
As the challenge of regulating short-term rentals becomes more pronounced not only in big cities including New York, but also in smaller destinations across the country and elsewhere, the battle against the fabled “Airbnb effect” has begun. This fight has highlighted the economic and social impact of unchecked short-term rentals and led to significant regulatory backlash.
Last year, New York City introduced strong measures to regulate Airbnb and similar platforms. At the time, the city, which had more than 25,000 listings, was facing increasing pressure from people who argued that vacation rentals were exacerbating high rents and encroaching on neighborhoods.
New regulations there include requiring vacation rental operators to be the primary homeowner and to be present during the rental period. These rules were aimed at eliminating around 90% of active listings, with a determined stance to reserve living space for locals rather than tourists.
New York’s new regulations mirror the actions of smaller communities like Durango and Bozeman, which have adopted a control-the-market approach. The growing popularity of vacation rentals in Lake Tahoe has prompted local governments to take action.
Last year, the California Court of Appeals upheld South Lake Tahoe’s Measure T, which narrowly passed in 2018, restricting vacation rentals in residential areas. Although the court’s decision affirmed the city’s authority, it noted potential constitutional concerns regarding its treatment. We surveyed out-of-state property owners and pinpointed both legal issues and ongoing tensions over property rights and community welfare in the tourist destination.
International vacation rental scene.
European cities, from Barcelona to Florence, are also facing similarly tough regulatory responses as the proliferation of vacation rentals drives up housing costs. Florence, for example, recently implemented a total ban on new vacation rentals in its historic center.
Economic and social impacts in Hawaii and elsewhere.
The rise of vacation rentals has led to what critics and commentators here describe as economic exploitation, with speculators buying up vacation rental properties and crowding out residents. This has led to higher housing costs and fewer homes available to residents, especially in popular vacation destinations like Hawaii and other popular destinations.
Regulations on private lodging have led to legal battles, and will likely continue. Issues include conflicts between homeowners’ rights to rent out their properties and community efforts to regulate or eliminate such rentals in order to preserve neighborhoods and housing stock.
The future of private lodging regulations.
In the future, it is likely that the balance of tourism economies in countries like Hawaii will become more delicate. As we have seen in the United States and around the world, successful regulation requires careful legal and constitutional consideration. We hope that Hawaii will help other jurisdictions enact or consider similar regulations with wise guidance to effectively manage the impacts of short-term rentals while avoiding legal pitfalls. Masu.
Please tell us about the future direction of vacation rentals in Hawaii.
