Hawaiʻi County Council members are taking another crack at regulating short-term rentals after failed attempts in recent years to close loopholes and clarify existing rules.

The county first tackled vacation rentals in 2018 with Bill 108. That law defined where “unhosted” vacation rentals — properties where the owner does not live on the premises — were allowed and created an avenue for existing rentals outside those zones to continue operating.

Last year, the council went after hosted vacation rentals, too. Bill 47 was the first step to regulate accommodations where the owner lives on the property. That law requires owners to register with the county and imposes a fine of up to $10,000 for failing to do so. 

“We support folks that are trying to make ends meet by having this cottage industry on the side,” council member Heather Kimball said. “We just need to make sure that we’re getting everybody on the same set of rules.”

Council member Holeka Inaba was the only member who voted against the 2025 bill. He said he would have supported the measure if it had included regulations the county planned to impose on hosted rentals.

“Why are we asking people to register for something and it isn’t really clear what the purpose is?” Inaba said. 

“We’ve gotten a lot of complaints from residents who are dealing with noisy vacation rental tenants, irresponsible vacation rental owners,” Inaba said, underscoring his support for the county being able to examine where that’s happening and do something about it.  

The registration deadline was pushed back to July 1 from December to give the county more time to create an enforcement system and align the ordinance with existing laws. 

Kimball is attempting to do just that with Bill 147. It will be heard by a council committee on Tuesday.

Moving Forward In Phases

In 2022, the council tried to regulate hosted rentals and close loopholes in Bill 108 with three bills. Rental owners resisted, saying the measures would harm residents who rent out parts of their property to make ends meet and contained standards that were difficult to interpret and enforce. 

Critics said it would send business away from locals and to hotels, stretch the planning department thinner and infringe on property rights. Many, including council member Ashley Kierkiewicz, urged the county to conduct an economic impact study before imposing regulations.

That study was completed in June. It found that restricting short-term vacation rentals would result in a loss of nearly one-fourth of visitor spending. A ban, which the county was not pursuing, would have detrimental effects on the island’s economy and owners, 54% of whom rely on rental income to cover housing costs. 

Lost short-term rental units wouldn’t likely be converted to long-term housing either, the study found. Just 4% of owners said they’d convert their properties if vacation rentals were restricted.  

The bills underwent two years of revisions before being shelved. Kimball, who introduced the bill package, said it was attempting to do too much and was confusing.

“We decided it was better to pull it and do it in phases,” she said, “rather than trying to do everything with one omnibus bill.”

Corrective Or Punitive?

Bill 147 would establish new definitions for hosted and unhosted short-term rentals, establish operational standards and enforcement measures and fines, broaden the areas where hosted rentals are allowed and extend the rental period considered short-term to anything under 180 days instead of under 30 days for unhosted rentals, aligning it with the current language for hosted ones.

The bill would set standards for occupancy limits and extend quiet hours from 9 p.m. to 10 p.m. It would also restrict events allowed on the properties to those of “residential character,” including picnics and birthday parties, and ban weddings and other large-scale events without a permit.

Hawai‘i Mid and Short-term Rental Alliance Executive Director Caitlin Miller said the operation standards overlap with existing ordinances and rely on subjective interpretation.

Including quiet hours and parking standards when the state and county already have noise and parking ordinances makes it difficult for owners to know how to comply. Rental owners should be held to the same standards as everyone else, Miller said.

“When subjective standards are paired with significant fines, like what are being introduced in Bill 147, enforcement can shift from corrective to punitive,” she said.

Bill 147 would require the planning director to establish enforcement and inspection procedures to investigate complaints and violations. It establishes fines of up to $10,000 for those who break the rules.

Kimball said Bill 147 and past regulations were necessary to get a handle on vacation rentals and ensure they don’t create any more pressure on the housing market than they already do.

Hawaiʻi County’s short-term rental regulations, including those proposed in Bill 147, are still less stringent than rules in other counties. But the concerns that sparked those regulations exist on Hawaiʻi island as well. 

Proponents of more regulations say the vacation rentals exacerbate Hawaiʻi’s housing shortage and raise the cost of long-term rentals. There were just over 8,000 active vacation rental listings on Hawaiʻi island as of March 2025, according to the county’s economic study. Some 93% were listings for entire homes while the remainder were for private rooms. Most were concentrated in Kailua-Kona, where 40% of the housing stock is vacation rentals.

“I don’t think you can argue that that doesn’t contribute to the housing problem or the cost over there,” Kimball said.

But the island isn’t currently at a point that would require stricter rules or a phaseout of several thousand rentals like Maui County is attempting, she said.

“We are at a good stasis,” she said. If short-term rentals don’t balloon, she added, they won’t have too much of a negative impact. 

The registration requirements and proposed enforcement rules will allow the county to get a snapshot of how many rentals exist, Kimball said, and in a few years, they’ll be able to reevaluate if further regulations are needed.

Missing Millions

One driving force behind Bill 147: Hawaiʻi County is missing out on millions of dollars in revenue from the Transient Accommodations Tax and General Excise Tax, according to the economic impact study.

The study found that $12 million of TAT and $1.6 million of GET remains unreported and uncollected. It cited enforcement and data gaps, zoning ambiguities and underreported income as some of the reasons for the shortfall.

Registration requirements and enforcements could ensure the county is getting what it’s owed. 

Kimball said once the registration requirements begin, the county will compare its list with listings from hosting platforms like Airbnb. 

“We certainly have infrastructure needs that are derived from the impact of the visitor industry on county assets,” Kimball said. Getting those uncollected resources to help with those impacts is important, she said, and only fair.