The House is again considering several proposals targeting short-term vacation rentals in Hawaii neighborhoods.

There’s a movement afoot in the Legislature to wrangle short-term vacation rentals.

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Rep. Daniel Holt and a handful of House members are spearheading efforts this year to rid Oahu of short-term rentals all together in an effort to try to slow the rising price of homes. Holt’s plan focuses on a large new Transient Accommodation Tax, raising the current rate of 9.25% to a combined rate of 35.25% for short-term rentals, according to House Bill 820, which passed the House Tourism Committee Feb. 7. 

Short-term rentals are defined as “lodgings that provide guest accommodation for less than 30 consecutive days,” according to the City and County of Honolulu. 

“If I’m successful in passing these bills, they’ll take effect this year,” Holt said. “It will take time for the counties, it will take time for the state, It will take time for us to adjust, it will take time for us to enforce.”

But even if Holt’s bill package is passed, there is debate over where the tax dollars will go. Currently, laws in place make counties responsible for regulating short-term rentals, yet there are enforcement issues for counties. 

“Some of the counties have done a very good job of … signing memorandoms,” Holt said. Unfortunately, the island I live on, Oahu, for whatever reason  seems to be lagging.” 

Not everyone supports the limitations on short-term rentals.  John Chang submitted testimony in opposition to HB 820.

“This bill violates the United States Constitution as well as the Hawaii State Constitution. It disenfranchises a certain category of taxpayer from those that are similarly situated. It is discriminatory in that it does not treat all providers of transient accommodations the same,” Chang wrote to lawmakers.

North Shore Oahu homes along Beachfront airBnb.
The Legislature is seeking to rein in short term vacation rentals. (Cory Lum/Civil Beat/2018)

Like the rest of the TAT, the revenues from this new vacation rental tax would be deposited into the state’s general fund.

Lawmakers are trying to clear up who is responsible for regulating the units and enforcing laws, and how tax dollars collected from those rentals should be spent. House Bill 84 is the Legislature’s latest attempt to do all that and would allow counties to phase out certain vacation rentals.

The confusion about who is responsible for regulating short-term rentals in Hawaii is one of the reasons these rentals are still active, despite previous attempts to close them down. 

If passed, HB 84 will give counties explicit authority to “enact ordinances to amortize or phase out permitted, nonconforming, or otherwise allowed short-term rentals in any zoning classification. Includes swapping, bartering, or exchange of a residential dwelling, or portion thereof, in definition of ‘short-term rental’ for this purpose.” 

“Unfortunately it’s fallen mostly to the counties to deal with visitor impacts,” Holt said, “whether that’s more lifeguards, more police, more calls… having to constantly renovate beach parks because they’re overused.”

He added, “We have to get a hold of short term rentals. It’s probably the most important thing we can do to reduce the burden of over tourism and help our housing market.”

HB 820 is awaiting a hearing in the House Finance Committee while HB 84 still needs to clear a hearing in the House Judiciary Committee if it is to stay alive this year.

Another bill targeting vacation rentals, House Bill 211, would prohibit hosting platforms, such as Airbnb, VRBO and others, from allowing bookings for rentals that are, “not lawfully certified, registered, or permitted as a transient vacation rental under applicable county ordinance.”

However, that bill has since died because it did not get a hearing in the House Commerce and Consumer Protection Committee by Friday.

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