Hawaii Appleseed Center for Law and Economic Justice released Hawaii Vacation Rentals: Impact on Housing and Hawaii’s Economy on March 22. The report discusses the rapid growth of vacation rental units (VRUs) and the resulting impact on housing affordability in Hawaii. The report goes on to explore various policy solutions implemented in other communities and makes recommendations for how Hawaii, and Oahu specifically, can better enforce their own restrictions on VRUs.
According to the new report, there are 23,000 VRUs in Hawaii as of 2017, a 35% increase over two years. The growth in VRUs is likely due to the high profitability of operating homes as unofficial hotels rather than using them for long term rentals. Data shows that a dwelling unit produces 3.5 times as much revenue in Hawaii as a VRU. As a result, speculators have been buying properties and converting them for these uses. While AirBnB and other web host sites contend that VRUs are often additional income for people occasionally making an extra room available, data shows that at least 52% of VRUs in Hawaii are owned by nonresidents.
The report also provides a review of other communities who have studied the economic impact of tourism and additional revenue generated through sales taxes charged to VRUs. The findings clearly demonstrate that even after adjusting for new tax revenue, VRUs place an economic burden on communities by decreasing available rental housing.
To provide a clearer path forward, Hawaii Appleseed lays out several recommendations in the report:
- Require all VRUs to be officially permitted, and implement fines to those in violation of the current ruling banning rentals for fewer than 30 days.
- Demand data transparency from the internet hosting sites so that enforcement agencies can identify violations and pursue corrections. To date, there have been 1,035 investigations into illegal VRUs in Oahu and only 49 violation notices because it is difficult to obtain data about transactions and rentals.
- Support Honolulu’s Department of Planning and Permitting so that they have the staff necessary to enforce policies in place to curb illegal VRUs.
The report is very well documented with reviews and data on how VRUs are impacting housing affordability throughout the islands and can be a resource for advocates considering local restrictions similar to those established in Oahu.
Read Hawaii Vacation Rentals: Impact on Housing and Hawaii’s Economy at: https://bit.ly/2HcMXZX