How to deal with vacation rentals

Illegal vacation rentals remove units from the local housing inventory, increasing scarcity and raising prices, and often lead to disputes within neighborhoods between long-term residents and short-term vacationers. I believe that our public policy goal should be to prioritize the use of scarce land and housing for affordable residential use first. As a distant second goal, excess housing inventory should be allowed to be allocated for vacation use, but only once the primary goal of housing is achieved.

Based on this principle, it’s clear that the first step is enforcement against illegal vacation rentals because they are removing housing inventory from the residential market.

The Council is currently evaluating a new bill which raises fines for violations but also increases the quantity of allowed units.

Rick Daysog writes:

The bill would increase the number of legal vacation rentals from 800 to about 4,000 and would allow owners of homes to rent out rooms to tourists. But it would not allow entire homes in residential areas to be used as vacations rentals.

“It’s something that needs to be addressed. It’s having a major impact on neighborhoods and also our visitor industry,” Caldwell said.

Operators also have to pay higher property taxes and those that continue to operate illegally could face stiff fines ranging from $25,000 to $100,000, depending on the number of violations. Once they’re issued, the fines are not negotiable.

The higher fines are a step in the right direction, but we need to have a broader conversation about how to ensure that enforcement is applied evenly and fairly.

I’m also concerned that the 4,000 limit is far too high and possibly quite arbitrary. I would recommend that the city arrive at a quantity based on our island’s carrying capacity for tourism. And once that number is developed, I recommend that the permits be auctioned, similar to a medallion system for taxicabs. This would allow the city to maximize the revenue collected for these valuable permits.