When most Americans think of west coast cities with a soaring cost of living, they often picture Seattle, LA, and San Francisco. But Honolulu, with limited real estate, a huge tourist business, and a median home price of $760,600, is arguably in the same league, price-wise. According to a new report, the vacation destination also faces significant cost pressure due to expanding activity from Airbnb and the vacation rental industry.
Hawaiʻi Vacation Rentals: Impact on Housing & Hawaiʻi Economy, found that 1 of every 24 homes in the state is used as a vacation rental. Released last month by the Hawaii Appleseed Center for Law & Justice, the report finds even higher rates of vacation rentals on popular islands. On Kauai, 1 in 8 homes is available for short-term rental.
The report also claims that half of the state’s 23,000 vacation rentals were owned by non-residents. Due to its popularity and location, Hawaii attracts significant foreign real estate investment.
In a statement, Airbnb said that the report’s numbers were “unfounded and patently false” and that the company had proposed common sense regulations to protect homeowners in Hawaii. The company says visitors staying at Airbnb properties in Hawaii in 2016 spent an estimated $649 million, and an earlier analysis found that the company has been an “economic lifeline” to many Hawaiians.
Airbnb is also the third-largest vacation rental company operating in Hawaii.
Hawaii has exceptionally high rents (median rent for a one-bedroom is $1,650), as well as one of the highest rental rates in the country (43 percent of Hawaiians rent).
“That rate of expansion of vacation rentals, taking that critical affordable housing away from our residents, really shocked me, to be frank,” Victor Geminiani, co-executive director of the Appleseed Center, told Fox News.
Airbnb and other vacation rental companies have been one of many topics of recent debate among Hawaiian officials, who are seeking to address the state’s housing affordability issue while at the same time supporting the state’s $15.6 billion annual tourism business. County-by-county regulations have made enforcement more challenging. The state legislature recently introduced bills to regulate the industry, including Bill 108, which would require additional registration.
Airbnb recently introduced it’s new Airbnb Plus luxury service to offer more standardized, hotel-like stays.