Despite vacation rental crackdowns and looming legislative reforms, vacation rental supply statewide still accounts for a significant portion of Hawaii’s housing stock.
That’s why the conversion of vacation rentals into longer-term housing is seen by some as a solution that could satisfy critical housing demand in Hawaii. But so far, regulatory policies have not led to an aggregate shift toward the long-term market, as other short-term rental listings have entered the market in response, said Justin Tyndall, an author of the Hawai‘i Housing Factbook 2024, which was released in May by the nomic Research Organization, where he works as an assistant professor of economics.University of Hawaii Eco
The fact book cites statistics from the state Department of Business, Economic Development and Tourism, which estimates that there are 32,000 STRs in the state, accounting for nearly 6% of the state’s entire housing inventory. While STRs aren’t necessarily in use daily, DBEDT data indicates that active listings increased 9% from 2022 to 2023.
Though Hawaii expanded its housing stock by 25,000 units, or 1.8%, from 2018 to 2022, UHERO noted that the growth was only on Oahu, which had a net increase of 23,000, and Hawaii County, which added 2,600 units. The report said Kauai and Maui saw a net loss of units, likely because “the rate of new construction has been unable to keep up with losses to the vacation rental market.”
So far, Maui is the only country to introduce a bill to amortize vacation rentals since the state gave the counties greater power to chart their own course. Kauai is staying the course. Hawaii island is working on vacation rental reforms but does not plan to amortize them.
