Gov. Green signs bill to clarify counties’ authority in regulating short-term rentals

Gov. Josh Green followed through on his pledge to sign Senate Bill 2919, clarifying the counties’ authority to regulate short-term rentals. Mayor Richard Bissen has already moved ahead with introducing a bill to phase-out thousands of short-term rentals to open up long-term housing for residents.

In a news release Friday afternoon, the Office of the Governor said the bill signing marked “a pivotal moment in tackling the short-term rental crisis in Hawaiʻi.” The measure spells out the counties’ authority to control the time, place, manner and duration of land uses, including short-term rentals.

“As we press forward with our ongoing wildfire response and recovery efforts, SB 2919 will be a pivotal tool to address Hawaiʻi’s housing crisis, while ensuring our essential housing programs for Maui recovery remain robust,” Green said.

In response to Maui County’s move to phase-out vacation rentals in West Maui by July 1, 2025, and the rest of the county by Jan. 1, 2026, the Maui Vacation Rental Association released a statement saying: the association is “deeply committed to supporting wildfire relief efforts and housing solutions on Maui. It’s why so many of our members have opened their homes for displaced residents. The vast majority of these properties are operated by locals who care for the community.”

The MVRA also said that “as policymakers consider changes to short-term rental laws, it is vital to recognize that hundreds of millions in county tax revenue and thousands of jobs are at risk. We look forward to working with officials to balance these concerns and ensure that Maui avoids these unintended consequences.”

Also, an Expedia Group spokesperson said: “Expedia Group looks forward to working with Maui County as it considers changes to local regulations on vacation rentals. We encourage policymakers to engage with the vacation rental community to identify solutions that balance community needs like housing with the significant economic benefits vacation rentals provide throughout Maui County.”

After signing Senate Bill 2919, the governor emphasized that properties participating in the rental assistance and direct lease programs with the state and Federal Emergency Management Agency programs would remain unaffected by the measure’s enactment, ensuring continued support for families in need.

“Our commitment to maximizing housing availability on Maui and statewide persists, and the state continues to extend support to legal owners who contribute to Maui wildfire relief efforts,” Green said.

The bill says that zoning powers granted to the counties shall be liberally construed in favor of the county exercising them. It expands the counties’ zoning powers in saying that that furnishing or offering transient accommodations shall not be considered residential or agricultural uses and may be phased out or amortized in any zoning district by county zoning regulations. However, a zoning ordinance may provide that transient accommodations may be furnished to a transient for up to 180 consecutive days.

By addressing the issue of illegal short-term rentals, the bill aims to alleviate Hawaiʻi’s housing crisis and increase housing levels throughout the state, according to the Governor’s Office.

“This bill provides counties with home rule authority to see that vacation rentals are not allowed in communities that do not want them,” the Governor’s Office says. Also, the bill “will help clear up any issues of state pre-emption, but counties will still need to craft their policies to avoid other legal or constitutional issues. This will help against the adverse impacts of non-resident ownership of short-term rentals, which impedes housing supply for residents and emphasizes the unique needs of each county in regulating such accommodations.”

Hawai‘i REALTORS® released a statement, saying its members were “extremely disappointed” that Gov. Green signed it into law at a time when “Hawai‘i’s families and workers need short-term rentals.

“Hawai‘i REALTORS® does not support illegal vacation rentals,” according to a news release. “However, SB 2919 does not give counties greater powers to address illegal rentals. It adversely impacts those who operate legal short-term rentals within the bounds of their respective county laws. The potential economic consequences of SB 2919 include the loss of state tax revenue and local jobs. It will prevent local homeowners from offering rentals to offset their mortgage payments and make ends meet.”

“Hawai‘i REALTORS® strongly supports increasing affordable housing, but this bill does not address the true causes of this shortage, including onerous regulations, excessive red tape, and high building costs. Furthermore, we are alarmed by a last-minute change to SB 2919 stating that short-term rentals are not a residential use. A federal court already determined that they are unequivocally a residential use. Due to this change, someone who rents a room in their home to a student for a semester could lose their home’s residential classification.”

The Realtors group also said it was concerned about granting counties the power to regulate and potentially ban 30- to-180-day rentals to include month-to-month rentals, which many residents use after their original lease expires, as well as any traditional rentals up to six months. These changes could severely curtail access to rental housing.”

The Senate bill was introduced by Maui County Sens. Lynn DeCoite and Troy Hashimoto and Oʻahu Sens. Jarrett Keohokalole, Stanley Chang, Carol Fukunaga and Michelle Kidani.

It passed final reading in the Senate by a vote of 22 ayes and 3 noes. Dissenting were Big Island Sens. Lorraine Inouye, Herbert Richards and Joy San Buenaventura. In the House, the bill was approved on final reading by a vote of 46 ayes and 5 noes. Dissenting were Big Island Rep. Richard Onishi and Oʻahu Reps. Sam Kong, Elijah Pierick, Adrian Tam and Gene Ward.