Are vacation rentals banned in Hawaii?
While the short answer for now is no, recent legislative changes are reshaping the way short-term rentals operate in the state.
If you are a vacation rental host in Hawaii, this is a difficult challenge to navigate. To help, we’ve gathered the latest updates, advice, and information that we have seen in other highly regulated vacation rental markets. Here is what vacation rental property managers and hosts need to know.
What’s the Latest Update on Short-Term Rental Regulations in Hawaii?
While vacation rentals in Hawaii are not completely banned, a new law, Senate Bill 2919 (or just SB 2919), signed by Hawaii Gov. Josh Green paves the way for local governments to regulate—and potentially ban—vacation rentals. This bill empowers counties and local governments in Hawaiib to create zoning laws regulating short-term rentals and even phase out transient accommodations in certain zones.
According to Beyond’s vacation rental data, we have started seeing declines in occupancy, average daily rates (ADRs), and revenue pacing, as expected with so much uncertainty in the Hawaii short-term rental market. We are also seeing decreased demand in the market, with booking lead times dropping by 17%.
Let's dive deeper into what SB 2919 entails and how it might impact vacation rental operations.
Hawaii’s New Vacation Rental Law, SB 2919, Explained
County Authority and Zoning
SB 2919 clarifies the counties' authority to control the "time, place, manner, and duration" of land uses, particularly transient accommodations including short-term rentals. This means that counties now have the explicit power to:
- Regulate: Create zoning laws that govern where short-term rentals can operate.
- Amortize: Gradually phase out short-term rentals in residential or agricultural zones where they are deemed inappropriate.
Addressing Housing Issues
One of the primary goals of SB 2919 is to alleviate Hawaii’s housing crisis. The bill aims to increase housing availability by addressing the issue of illegal short-term rentals, which often compete with long-term housing options for residents. Even though, according to research from the Harvad Business Review, banning short-term rentals is a poor solution to increase housing affordability.
Implications for Vacation Rental Hosts and Managers
For vacation rental hosts and property managers, SB 2919 brings both challenges and opportunities:
- Regulatory Compliance: Hosts will need to stay informed about county-specific regulations and ensure their properties comply with new zoning laws.
- Community Engagement: Engaging with local communities to understand their stance on vacation rentals will be crucial in navigating this new regulatory landscape.
What Can Hawaii Hosts and Property Managers Do Now?
- Stay Informed: Regularly check county websites and local news for updates on short-term rental regulations. Joining industry associations can also provide valuable insights and resources.
- Keep your owners updated: Keep your owners in the loop with regular communication (like monthly or quarterly newsletters) that showcases current booking trends and regular updates on what is happening in legislation.
- Conduct Property Audits: Ensure your property complies with zoning laws and other regulatory requirements. Consider hiring a consultant if needed.
- Engage with the Community: Attend community meetings and engage with local residents to understand their concerns and preferences regarding short-term rentals.
- Consider Alternative Models: If short-term rentals are restricted in your area, explore alternative business models such as long-term rentals or mid-term stays for traveling professionals.
The new short-term rental regulations in Hawaii, encapsulated in SB 2919, represent a significant shift in the vacation rental landscape. For hosts and property managers, understanding and adapting to these changes is crucial. By staying informed, complying with local laws, and engaging with the community, you can navigate these challenges and continue to offer exceptional vacation experiences in Hawaii.
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