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Bill allowing counties more authority over short-term rentals on Greens desk

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(The Center Square) – It’s now up to Gov. Josh Green to decide if Hawaii’s counties will have more authority to regulate short-term rentals.

A conference committee agreed to pass Senate Bill 2919, which would allow counties to create zoning laws regulating short-term rentals.

The bill would also counties the authority to amortize or phase out transient accommodations in residential or agricultural zones.

“This provision allows us to tailor solutions to address the specific impacts of short-term rentals on our communities while promoting sustainable tourism practices,” said Maui County Mayor Richard T. Bissen Jr. in written testimony. “By supporting SB 2919 SD2 HD1, we can foster a more equitable and resilient tourism industry that benefits both residents and visitors alike.”

The bill defines transient accommodations as “the furnishing of a room, apartment, suite, single family dwelling, shelter, or the like to a transient for less than one hundred eighty consecutive days for each letting in a hotel, apartment hotel, motel, condominium or unit as defined in chapter 514B, cooperative apartment, dwelling unit, or rooming house that provides living quarters, sleeping, or housekeeping accommodations, vehicles with, or advertised as including, sleeping accommodations, or other place in which lodgings are regularly furnished to transients.”

Maui County, particularly Lahaina, struggled with housing after a fire destroyed homes in August. Green threatened a moratorium on short-term rentals if owners did not volunteer to house displaced fire victims.

The short-term rental industry opposed the bill.

“We are equally concerned with the loss of tax revenue to the State,” said Kahea Zietz, president of the Hawaii Mid and Short-Term Rental Alliance. “Short term rentals pay very high taxes, which many kama’aina (Hawaiian residents) pay for short term stays. The loss of that income to the State will be devastating to the State and will negatively affect every resident. High taxes are one the main reasons that people are leaving this State. The ban on short term rentals will add to the short list of reasons of why Hawaii residents leave the State.”

The state is already in an affordable housing crisis, according to proclamations by Green. The first was issued in July 2023 and the sixth last week.

The proclamations have implemented several measures to spur new housing development, including the expedition of the permitting process by cities and counties for new residence construction. The fifth proclamation, issued in February, waived several fees charged by cities and counties. It also required that developers build 60% of their units at 140% of the area median income or less. The previous requirement was 50%-plus, according to the proclamation. The proclamation expired on April 20.