The Hawaiʻi County Council has resumed discussions to reform the island's short-term rental (STR) industry.
This week the council held a hearing on three bills looking to categorize STRs, also known as transient accommodation rentals, that would make owners register their rental units with the county.
The council is also proposing new fees, fines and operational rules.
As STRs become more common in the state, the County of Hawaiʻi is hoping to update and standardize rules around them.
“ It is intended to make sure that everyone is registered who is operating a transient accommodation is operating legally and adhering to the same set of good neighbor and advertising and hosting standards,” said council chair Heather Kimball, who co-introduced the measures along with councilmember Ashley Kierkiewicz.
“The other intention is to continue to preserve the character of the rural and residential neighborhoods,” Kimball added.
Bill 121 is the primary legislation in the package and would place rentals under three categories: owner-hosted, operator-hosted and un-hosted. They determine where rentals can operate and their registration fees.
Owner-hosted rentals, located on the same properties where the homeowners themselves live, would be able to operate anywhere. Operator-hosted and un-hosted units would only be allowed in commercial and hotel-resort areas.
Quiet hours, guest limits and even parking could also be regulated under the measure.
One of the bill’s featured proposals defines a “transient” renter — or visitor — as someone who rents for less than 180 days. That means units marketed to those renters would also have to register as STRs.
The county’s current language defines it as visitors who rent for up to 30 days.
However, the measures have garnered little public support. During a hearing on Monday, most testifiers opposed the new STR regulations. More than 100 who submitted written testimony opposed them, and only six were in support.
The increased attention and opposition can be partially attributed to the bills’ impact on hosted rental units — those on the same properties where the homeowners live.
The changes could turn what are currently long-term rentals into STRs, affecting homeowners’ real property taxes and transient accommodations taxes.
STR owners say the higher taxes, fees, fines and new regulations would drive up costs and make rental operations difficult, which could put their livelihoods and thousands of jobs at risk.
“We urge you to at least slow down your regulation of short-term hosted short-term rentals until an economic impact study can be done,” said Joe Peiffer, who runs a hosted STR in North Kohala with his wife.
He added that the measures wouldn’t create more housing, which is one of the reasons county and state agencies want to regulate and reduce the number of rental units. They would, however, “eliminate the jobs of the artists, landscapers, carpenters, cleaners, marketers, caretakers and other professionals that service our property.”
In a 2020 report, the Hawaiʻi Tourism Authority found that home and vacation rentals statewide contributed $6 billion to the local economy in 2018 and supported 46,000 jobs.
The other STR measure, Bill 122, would remove bed and breakfast operations from county law and fold them into the new rental structure.
The bill has been postponed until a council meeting in August to work out concerns brought by the county about the potential confusion around permitting and operations.
The council also postponed Bill 123, which would repeal language about ʻohana units in the county code and replace it with less-regulated accessory dwelling units (ADU), until a council meeting later this month.
State lawmakers this year mandated counties to pass legislation allowing more ADUs on residential properties. While Bill 123 isn’t directly related to the other rental measures, ADUs can be used as rental units.
In a 2023 report, the University of Hawaiʻi Economic Research Organization found that 8% of Hawaiʻi Island’s housing units are STRs.
