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Airbnb listings and other short-term vacation rentals in Hawaii are on the brink of significant changes as the state confronts a housing crisis exacerbated by last year's wildfires on Maui.
A bill that could fundamentally alter vacation rental regulations statewide has cleared both the Senate and the House and now awaits Hawaii Gov. Josh Green's signature – a promise he has made should the bill reach his desk. If enacted, the new law, set to take effect on July 1, would give each Hawaii county the power to redefine zoning ordinances, potentially converting short-term rentals into long-term residential housing to "guide the overall future development of the county." Violations would carry fines of up to $10,000 per day.
While the effects of this legislation won't be immediate, it represents the first significant step in regulating short-term vacation rentals across Hawaii, according to Hawaii Sen. Jarrett Keohokalole, the bill's sponsor.
"This is a monumental change," Keohokalole told USA TODAY.
The bill would overturn a 1957 ordinance that displaced Native Hawaiian communities from their homes, converting their land into sugar plantations. Keohokalole also noted that many other zoning ordinances are outdated, failing to address the influx of foreign investors or the impacts of overtourism.
"We know that the majority of short-term rentals in Hawaii are illegal, owned by non-residents, and contribute to the skyrocketing housing costs," Gov. Green posted on social media last week. "We support Senate Bill 2919 to empower counties to regulate short-term rentals and potentially phase them out."
Housing affordability in Hawaii has deteriorated over the past two decades. The cost of a single-family home has quadrupled since 2000, and less than a third of households can afford the typical local home, according to the Hawaii Housing Factbook by the Economic Research Organization and the University of Hawaii. Rents have also continued to rise, with Maui having the most expensive median rent in the state – a typical apartment rents for $2,500 a month.
This affordability crisis is partly due to the high percentage of short-term rentals in Hawaii's housing stock. About 30,000 of Hawaii's 557,000 total housing units, or 5.5%, are short-term rentals, compared to cities like Las Vegas, where only 3% are short-term rentals. The situation is even more pronounced in Maui, where vacation rentals account for 15% of the island's total housing supply.
The August wildfires, which destroyed much of Lahaina and displaced thousands of West Maui residents, further exacerbated the housing crisis on Maui.
Jordan Ruidas of the Native Hawaiian-led community organization Lahaina Strong described the situation as an emergency. "With Lahaina, we're in an emergency situation," she said. "The fire burned away the majority of our working-class housing. We're in shambles, and people are still waiting for long-term housing."
Ruidas said around 3,000 displaced residents are still living in hotels, over eight months since the fires ravaged West Maui. Some are leaving Hawaii entirely due to the lack of stable long-term housing.
Maui County Mayor Bissen has expressed a desire to "increase the inventory of available long-term units for the people of Maui" and even proposed tax incentives for owners to convert their units into long-term housing in November.
"It's not just an inventory problem; it's the fact that the inventory is being used for something that's not helping the community," said Ruidas.