For years, Hawaii has had a strange approach to short-term rental properties, especially those operating without the required county permits.
Some residents have decried their impact on our communities and the housing market. Others have depended on them to make ends meet. Our politicians, of course, have always been eager to collect taxes from them.
But now there is a bill before Gov. David Ige, SB 1292, which he has until June 24 to veto or sign, that would require online platforms such as Airbnb to register as tax agents and collect the general excise and transient accommodations taxes from STR operators, legal or not. State officials estimate the bill could bring in as much as $52 million a year, if enacted.
Hotel industry, civic organizations and unions have urged the governor to veto the bill, saying it would condone STRs that violate county regulations.
The Grassroot Institute of Hawaii would prefer that taxation should be accompanied by a way for short-term rental property owners to register and operate legally. However, county ordinances on vacation rentals have made this goal increasingly difficult. Nearly every county has instituted extremely high fines for violations of the rules on vacation rentals — so high that they risk being ruled unconstitutional. Moreover, some of those rules are so complex that they make it difficult to operate a legal rental.
For a state that still depends on tourism, this is a self-defeating approach. Short-term rentals are a growing part of Hawaii’s tourism economy, and they’re not going away. We need to find a reasonable way to manage these rentals, to better deal with their effects on our communities.
As defenders of individual liberty, the Grassroot Institute has long defended property rights. This means we recognize that owners of short-term rentals have a fundamental right to use their properties as they wish, so long as they don’t infringe on the property rights of their neighbors. What Hawaii needs is an approach that lets rentals operate legally, but with regulations that will protect the interests of our communities.
The keyword is “reasonable.” Not excessive regulations that are impossible to fulfill, and that expose the owners to fines, liens and lawsuits for the smallest of infractions. Nor regulations so lax that they allow rentals to operate without regard for the safety and consideration of their neighbors.
What we need is the right kind of compromise — maybe even one that would leave everyone a little bit unhappy. Short-term rentals would continue, but they would operate in the open, in accordance with the law and reasonable regulation.
No amount of wishing or lobbying will succeed in stuffing the short-term rental genie back into the bottle. Let us work together to integrate this new form of tourism into our economy in a way that won’t disrupt our communities and social relations.