close
close

New law in Hawaii bans vacation rentals during housing crisis

play

Airbnb listings and other short-term vacation rentals in Hawaii are a step closer to being phased out as the state grapples with a housing crisis worsened by last year’s wildfires on Maui.

A bill with the potential to reform vacation rental regulation across the state passed the Senate and House of Representatives on Wednesday and now awaits the signature of Hawaii Governor Josh Green, who already promised to sign it if it ends up on his desk. If signed, the new law will come into effect on January 1.

SB2919 would give each Hawaii county the authority to redefine zoning ordinances, including converting short-term rentals to long-term residential properties, to “guide the overall future development of the county.” Anyone who breaks the law faces a fine of $10,000 per day.

Significant changes won’t happen overnight, but it is the first major legislation to regulate short-term vacation rentals statewide, said Hawaii Sen. Jarrett Keohokalole, who introduced the bill.

“It’s huge,” Keohokalole told USA TODAY.

The bill effectively nullifies a 1957 ordinance that forced Native Hawaiian communities from their homes and turned their land into sugar plantations. Many of the other zoning regulations are outdated, Keohokalole said, and do not reflect the influx of foreign investors or overtourism.

Should I visit Maui now? Maui businesses are asking for responsible tourists to help the economy after fires

“We know that the majority of STRs (short-term rentals) in Hawaii are illegal, owned by non-residents, and contribute to skyrocketing housing costs,” Governor Green wrote. X, formerly Twitter, last week. “We support Senate Bill 2919 to give counties the power to regulate STRs and potentially phase them out.”

Housing affordability in Hawaii has worsened over the past two decades. A single-family home will cost four times as much in 2023 as it did in 2000, and fewer than a third of households can afford even the typical local home, according to the Hawaii Housing Factbook from the Economic Research Organization and the University of Hawaii. Rents also continue to rise, and Maui has the most expensive average rent in the state: a typical apartment costs $2,500 per month.

Part of that is due to the high percentage of short-term rentals in Hawaii’s housing stock. About 30,000 of Hawaii’s total 557,000 housing units, or 5.5%, are short-term rental properties, compared to cities like Las Vegas, where only 3% are short-term rental properties, the report said. It’s even worse in Maui, where vacation rentals make up 15% of the island’s total housing stock.

The August wildfires, which destroyed most of Lahaina and displaced thousands of West Maui residents, only exacerbated Maui’s housing crisis. “With Lahaina, we are in an emergency situation,” Jordan Ruidas of the Native Hawaiian-led community organization Lahaina Strong told USA TODAY.

“The fire destroyed most of our workers’ housing,” she said. “We are in a mess and people are still waiting for longer-term housing.”

Ruidas said about 3,000 displaced people are still living in hotels, more than eight months since fires devastated West Maui. Some leave Hawaii completely due to the lack of stable long-term housing.

“What has become clearer, at least in Lahaina and that remote community, is that so much of the housing stock on that part of the island has been converted to vacation rentals that survivors are struggling to find housing,” Keohokalole said.

Maui County Mayor Bissen has said he wants to “increase the inventory of available long-term housing for Maui residents” and has even proposed tax breaks for owners to convert their homes into long-term housing in November.

“It’s not an inventory problem, it’s the fact that the inventory is being used for something that doesn’t help the community,” Ruidas said.

Kathleen Wong is a travel reporter for USA TODAY based in Hawaii. You can reach her at [email protected].