Are Airbnbs banned in Hawaii? New law seeks to cracks down on short-term rentals.

Destroyed homes and businesses are seen in the aftermath of the Maui wildfires in Lahaina, Hawaii.

Airbnb listings and other short-term vacation rentals in Hawaii are one step closer to being phased out as the state grapples with a housing crisis exacerbated by last year’s wildfires on Maui.

A bill with the potential to reshape vacation rental regulation across the state passed the Senate and the House on Wednesday and now awaits Hawaii Gov. Josh Green’s signature – who already promised to sign it if it hits his desk. If signed, the new law will go into effect on July 1.

SB2919 would grant each Hawaii county the authority to redefine zoning ordinances, including converting short-term rentals into long-term residential housing, in order to “guide the overall future development of the county.” Those who violate the law would be charged a fine of $10,000 per day.

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Significant change won’t happen overnight, but it is the first major legislation regulating short-term vacation rentals statewide, according to Hawaii Sen. Jarrett Keohokalole, who introduced the bill.

“It’s huge,” Keohokalole told USA TODAY.

The bill actually overturns a 1957 ordinance that drove Native Hawaiian communities from their homes and converted their land into sugar plantations. Many of the other zoning ordinances are outdated, Keohokalole said, and don’t reflect the influx of foreign investors or overtourism.

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“We know the majority of STRs (short-term rentals) in Hawaii are illegal, owned by non-residents, and contribute to skyrocketing housing costs,” Gov. Green posted on X, formerly Twitter, last week. “We support Senate Bill 2919 to empower counties to regulate STRs and potentially phase them out.”

Housing affordability in Hawaii has worsened over the past two decades. A single-family home cost four times as much in 2023 than in 2000, and less than one-third of households can even afford the typical local home, according to the Hawaii Housing Factbook by the Economic Research Organization and the University of Hawaii. Rents also continue to rise, and Maui has the most expensive median rent in the state – a typical apartment is $2,500 a month.

Part of that is due to the high percentage of short-term rentals in Hawaii’s housing stock. About 30,000 of Hawaii’s 557,000 total housing units, or 5.5%, are short-term rentals, compared to cities like Las Vegas, where only 3% are short-term rentals, the report said. It’s even worse in Maui, where vacation rentals account for 15% of the island’s total housing supply.

August’s wildfires, which destroyed the majority of Lahaina and displaced thousands of West Maui residents, only amplified the housing crisis on Maui. “With Lahaina, we’re in an emergency situation,” Jordan Ruidas of Native Hawaiian-led community organization Lahaina Strong told USA TODAY.

“The fire burned away the majority of our working-class housing,” she said. “We’re in shambles, and people are still waiting for long-term housing.”

Ruidas said around 3,000 displaced residents are still living in hotels, over eight months since the fires ravaged West Maui. Some are leaving Hawaii entirely due to the lack of stable long-term housing.

“What’s become clearer, at least in Lahaina and that outlying community, is that so much of the housing stock on that part of the island has been converted into vacation rentals that the survivors are struggling to find places to live,” said Keohokalole.

Maui County Mayor Bissen has said that he wants to “increase the inventory of available long-term units for people of Maui” and even proposed tax incentives for owners to convert their units into long-term housing in November.

“It’s not an inventory problem, it’s the fact that the inventory is being used for something that’s not helping the community,” said Ruidas.

Kathleen Wong is a travel reporter for USA TODAY based in Hawaii. You can reach her at [email protected].

This article originally appeared on USA TODAY: Are Airbnbs banned in Hawaii? New law seeks to cracks down on short-term rentals.