Hawaii STR Law Update: Hawaii HB1838 to Give Counties Power to Regulate STRs

Hawaii House Bill 1838, introduced by Rep. Luke Evslin and other Democratic lawmakers, aims to grant counties the clear authority to regulate short-term vacation rentals, including the power to phase them out entirely. The bill comes as a response to the state's worsening housing crisis, exacerbated by the recent Maui wildfires that displaced thousands of residents.

Under HB1838, counties would be allowed to enact zoning ordinances to amortize or phase out nonconforming single-family transient vacation rental units over a reasonable period of time. The bill seeks to amend existing laws and clarify a 1957 statute that was used to challenge Honolulu's efforts to clamp down on vacation rentals by prohibiting rentals between 30 and 189 days.

Proponents argue that HB1838 could help address Hawaii's housing affordability crisis by enabling counties to convert short-term rentals into longer-term housing for residents. Governor Josh Green, who has promised to sign the bill if it reaches his desk, sees this as the fastest way to fill the state's shortfall of 50,000 affordable homes.

The bill has garnered support from local housing nonprofits, hotel companies, and community leaders who are concerned about the increasing number of residents leaving the islands due to the lack of affordable housing. However, some critics fear that the broad zoning powers granted by HB1838 could negatively affect property rights and stifle housing growth.

Hawaii HB1838 Timeline and Will It Pass?

As of April 2024, HB1838 has passed through the House and is being heard in Senate committees. The bill has faced challenges in the legislature, with amendments being made to address concerns raised by opponents. If passed, HB1838 would not enact any specific regulations on short-term rentals but would provide counties with the legal authority to do so.

The implementation of a phase-out, if enacted by counties, would likely take effect over several years. While HB1838 alone may not solve Hawaii's growing housing crisis, supporters view it as a crucial first step in addressing the issue. However, legal challenges are expected to follow any county actions to further regulate vacation rentals, including those listed on different booking platforms, if the bill becomes law.