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Honolulu Transient Vacation Rental Legislation is Heating Up

The island of Oahu is facing a possible economic crisis. We need your help to keep short term vacation rentals as an option for our visitors and homeowners.

Honolulu City Council is seeking to effectively ban all vacation rental outside of resort zones with the passage of Bill 89-CD1. This would result in approximately 800 currently legal vacation rental properties (outside the resort zoned areas) on the island of Oahu.

Contact Honolulu City Council to Show Your Support

The final vote on this bill is April 17, 2019. If possible, please show your support of the vacation rental industry and contact the Honolulu City Council to ask that they implement a measured response to the vacation rental industry to save the island Oahu and the employees of this needed industry from the loss of revenue, jobs, wages, and financial stability.

Potentially Devastating Impact on the Tourism Industry

If this bill were to pass, it would have an immediate and devastating effect on not just the tourism industry and those who depend on it for their livelihoods, but the county of Oahu as a whole.

Tourism has long been the lifeblood of all the Hawaiian islands and its population. In 2018, visitors spent $8.16 billion dollars on Oahu alone, representing a 7.2% increase over 2017. The vacation rental home industry accounts for 2.7% of overall tourism, which translates to a tourist expenditure of $220 million dollars in 2018.

That figure is just what tourists spent on their vacation homes and their entertainment during the course of their visits. It doesn’t take into account all the taxes paid to the local and state governments, which is a staggering sum.

There are many factors to consider regarding Bill 89 CD-1. Many are economic and many more are human.

** Vacation rentals on Oahu account for 2.7% of GP. This translates to millions of dollars in GET and TAT. All of this revenue would be lost if Bill 89 CD-1 is passed.

** If Bill 89 CD-1 is passed, many individuals who purchased homes for investment purposes will have no further use for them and put them on the market. This could easily result in a real estate glut, driving down prices significantly. This creates a domino effect whereby property values all over the island decrease and homeowners lose precious equity in their homes.

** Since the advent of sites like VRBO and Airbnb, vacation rentals have become an increasingly popular form of vacation accommodations. People enjoy having a more “authentic” experience and appreciate the space and privacy a vacation rental affords them.

About Bill 89 CD-1

Under Bill 89 CD-1, approximately 800 vacation rentals would be available on the island of Oahu. In the month of February, 2019, 456,820 visitors arrived here. If each of those visitors is part of a family of 4, we can conclude that 114,205 families arrived on Oahu in February 2019.

If just 5% of those families were seeking a vacation rental instead of a hotel room, that would be 5710 vacation rental homes being sought.

If only 800 properties were available on the entire island, assuming every single one was available for these families dates, the island of Oahu would still disappoint nearly 5000 families.

Even if 1000 of those families did stay and find alternate accommodation, the island of Oahu has still lost the revenue of 4000 families. That number could be mind-boggling.

** The vacation rental industry employs 12,000 people on the island of Oahu. If Bill 89 CD-1 is passed, those employees will find themselves jobless overnight. Their lost wages will have a significant detrimental effect on the economy, in terms of their average expenditures. This is not to mention the very real human cost.

Many of our island neighbors are only very precariously keeping afloat financially. With the cost of living always on the rise and wages staying stagnant, losing an additional income would impose a terrible financial hardship on many families on the island.

While we at Hawaii Life Vacations agree that regulations need to be imposed on the Oahu vacation rental industry, we implore the Honolulu City Council to take a more measured approach. By regulating instead of eliminating new and existing vacation rentals, the City Council can add millions of dollars to the local and state economy, prevent a glut of properties on the sales market and the ensuing price crash, as well as make sure that our fellow Hawaiians are able to maintain their current lifestyles.

We support the following regulations:

  • The creation of a Vacation Rentals Department within the county government to address this ever-growing industry
  • Require an identification number for each vacation rental and charge an annual fee for registration.
  • Institute a higher property tax rate for registered vacation rentals.
  • Increase the current 1% cap on all vacation rentals outside of the resort zone
  • Impose a requirement that all registered vacation rentals must be managed by licensed real estate brokerage or Condominium Hotel Operator.
  • Require that all advertisements include the vacation rental registration number, the real estate brokers license number and the actual address of the property. Assess fines for non-compliance.
  • Pass and enforce a noise ordinance, with escalating fines for non-compliance.
  • Enact a Good Neighbor notification requirement, whereby a Good Neighbor Brochure must be placed in each vacation rental property to inform guests of the accepted standards of behavior during their stay.
  • Require that a representative of the real estate brokerage meet each individual party no later than 24-hours after check-in to explain the Good Neighbor policy and answer any questions.
  • Mandate signage in front of each vacation rental home, indicating the registration number, the brokerage license number and a phone number to call in the event of questions, complaints or emergencies.

Below is a list of the email addresses of the Honolulu City Council, should you wish to contact them directly regarding Bill 89 CD-1:

Mahalo for your help.

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Mark Miorelli

April 16, 2019

As a tourist I could find no motel accommodations on the N Shore. Air BNB set me up with a room near Turtle Bay. I had a great hike with Ken and his sun at N S Tours. Went to the food trucks, laid on the beaches and mingled with locals. A perfect end to thee weeks including Hilton Hawian Village and NCL. I hope my stay at the NS benefited the locals half as much as my stay did me. Do not abandon hard working people for Big time resorts.

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