Hawaii Has a Severe Housing Shortage. Will Allowing Counties to Ban Short-Term Rentals Help?

In an attempt to create affordable housing, Governor Josh Green signed SB2919, which allows counties to ban vacation rentals across the state.

In 2023, Hawaii had one of the largest chronically unhoused populations in the United States, as well as one of the highest unhoused youth populations, as Hawaii News Now reported last year. Home prices in the state have skyrocketed more than 300 percent since 2000 and remain some of the highest in the nation, and many of the existing "affordable housing" units are not affordable to lower-income residents. This month, in an effort to curb the state’s housing challenges, Hawaii’s governor signed SB2919, which allows counties to phase out short-term rentals (STRs).

STRs have been a woe for many locals for years. According to the University of Hawai‘i Economic Research Organization, STRs currently compose roughly five percent of the state’s 565,000 housing units; a study by the organization notes that such density of STRs can have "the potential to wield significant influence on local rents and home prices." Borrowing from outside studies of cities like Barcelona and Los Angeles, the group estimates that banning STRs could lower home prices in Oahu between four and six percent, while lowering median monthly rents by up to $160.

In Maui, where last year’s fires damaged 2,200 structures and displaced more than 7,000 people, the crisis has been more acute. After the fires, Governor Josh Green issued declarations banning rent increases and accelerating permits and construction for new housing, yet the question of finding existing housing remained an issue. At a recent press conference, Green noted that this new STR law could free up more than 2,000 homes in Maui alone. After the senate bill passage, Maui mayor Richard Bissen announced his intention to phase out STRs from the island by July 2025.

SB2919 was championed by hospitality unions and local grassroots organizations, including Our Hawai‘i and Lahaina Strong. The latter held a nine-month-long occupation of Kāʻanapali Beach—one of the most popular Maui beaches for tourists—to advocate for long-term housing for fire survivors. In a Maui Now Instagram video announcing the end of the beach occupation, one Lahaina Strong activist, Paele Kiakona, noted that though the group’s initial demand was for long-term dignified housing for fire survivors, its focus shifted. "People started to move from hotels now into long term housing with…FEMA assistance," he said. "And…now, we’ve actually been [a] hand in creating a law for the entire state."

Related Reading:

Is There a Way Out of Hawaii’s Housing Crisis?

How Will the Next President Fix the Housing Crisis? 

Top image: Waikiki skyline, aaaaimages/Getty Images