Hawaiʻi island is quietly turning residential housing into visitor accommodations. While Honolulu, Kauaʻi, and Maui counties have drawn firm limits on where unhosted vacation rentals can operate, Hawaiʻi County continues to allow them in residential condominium developments outside of resort zones, blurring the line between homes for residents and units for visitors, and driving up the cost of housing in the process.

The recently introduced bill relating to Hawaiʻi island vacation rentals, County Council Bill 147, would continue this trend. Amending this bill to remove unhosted vacation rentals as an allowable use in multi-family residential zoning districts would correct a major flaw in our zoning code and move the county a step closer to housing affordability.

According to a 2025 county-commissioned economic impact study on vacation rentals, 93% of the island’s vacation rental listings were unhosted, with whole homes being utilized as visitor accommodations. Allowing entire homes to be used as vacation rentals increases property values by adding commercial income potential. In a tourism-driven economy like Hawaiʻi’s, that added value attracts outside investors and drives up prices for local buyers.

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The impacts of this are impossible to ignore. According to the University of Hawaiʻi Economic Research Organization’s Hawaiʻi Housing Factbook 2025, 67.8% of condominium purchases on Hawaiʻi island were made by out-of-state buyers. On Oʻahu, where short-term vacation rentals can operate is more restricted, that figure is just 19.9%. In Maui and Kauaʻi counties, where vacation rentals account for a greater portion of housing, condominium prices are nearly double those in Honolulu and Hawaiʻi counties.

This matters because condominiums are the primary entry point into homeownership for many residents. As noted in the UHERO Hawaiʻi Housing Factbook 2025, the median price of a single-family home in Kona on Hawaiʻi island in 2025 was $1.195 million, compared to $670,000 for a condominium.

While neither is truly affordable, condominiums represent the most realistic starting point for many working households. When those units are priced and purchased as investment properties, that pathway begins to disappear. At a median condominium price of $912,500 on Maui, there are effectively no market-rate options left for buyers trying to enter the housing market.

The impacts extend beyond ownership. Apartments that could be available as long-term rentals for residents are instead used as short-term vacation rentals, reducing the rental supply and raising rents.

In another UHEREO economic analysis, phasing out vacation rentals is projected to reduce rents on Maui by an amount comparable to the estimated 20% to 40% decline in condominium prices. Proposed housing projects in Hawaiʻi County also face community opposition because there is no guarantee they will serve as housing rather than vacation rentals.

Hawaiʻi County has the opportunity to change course. The county’s general plan designates resort zones as the appropriate locations for visitor accommodations. Unhosted vacation rentals belong in those areas, not in residential neighborhoods and condominium complexes intended to house local residents.

Public sentiment reflects this distinction. As part of the county economic study on vacation rentals, a survey of residents found that more than 70% of respondents were unlikely to support unhosted short-term rentals in their community.

Bill 147 can be part of the solution rather than the problem, but only if it is amended to remove unhosted short-term vacation rentals as an allowable use in multi-family residential zoning districts. This would align with community priorities and help ensure that future housing development, especially multi-family housing, which is critical to achieving affordability on our island, supports long-term residents in Hawaiʻi County.

Setting this standard now avoids the need for more disruptive policy changes in the future, allowing existing uses to continue while establishing clear expectations going forward. By drawing this line, the county can take a meaningful step toward protecting housing opportunities for local residents while still supporting a healthy visitor industry in appropriate locations.

No single policy will solve Hawaiʻi’s housing challenges, but ensuring that residential housing is primarily used for residents is a necessary place to start. In a recent Civil Beat article, the author of Bill 147 said, “If short-term rentals don’t balloon, they won’t have too much of a negative impact.”

Amending Bill 147 to remove unhosted vacation rentals as an allowable use in residential zoning districts outside of resort zones is how we can stop them from ballooning.