KAILUA-KONA — Hawaii’s tight housing market is the result of a “costly, time-consuming, and politically and economically uncertain” development process and not short-term Airbnb rentals, says a study conducted for the online vacation rental company.
KAILUA-KONA — Hawaii’s tight housing market is the result of a “costly, time-consuming, and politically and economically uncertain” development process and not short-term Airbnb rentals, says a study conducted for the online vacation rental company.
The study concluded that the company, which allows homeowners to rent out all or a portion of their homes to visitors on a short-term basis, doesn’t have as much of an impact as its critics allege.
“Airbnb’s activity in the state is so small that it has no material impact on the availability of housing for local families,” said the report, prepared by researcher Paul Richard Kauanahoakalani Cassiday Jr.
The argument boils down largely to the number of listings on Airbnb and the small share of homes they actually represent.
The report looks exclusively at booked “entire home” listings, which allow visitors to rent an entire unit. It doesn’t consider “private room” or “shared room” listings in which a guest shares the unit with the owner or others.
Throughout Hawaii, there are 8,134 “entire home” listings on Airbnb, according to the report. That’s about 1.53 percent of the state’s housing stock.
Of those, the vast majority, 61 percent, are rented fewer than 60 days a year.
Airbnb is the state’s third-largest short-term rental platform after VRBO and Homeaway, according to the report.
The proportion of “booked entire homes” is higher on Hawaii Island, where they represent 2.21 percent of the island’s housing stock, according to Cassiday’s report.
About half of those homes are booked for less than 30 days out of the year.
Cassiday reported that a very small percentage, less than a fifth of a percentage point statewide, of the housing stock is booked for more than 180 days out of the year.
On Hawaii Island, that rate is even smaller, where less than a sixth of a percentage point out of the island’s housing stock is booked more than 180 days.
The data, Cassiday said, suggests that by far, most of the homes on Airbnb are used by their owners for much of the year and only rented occasionally.
“Think about it,” he said in an email, “the income from short-term renting a home for one or two weeks a year would never out-compete the income one could earn from a long term rental or more frequent use as a short-term rental.”
Cassiday said just because a home isn’t booked, that doesn’t mean it’s sitting vacant.
“It’s more likely being used by homeowners,” he said. “After all, it makes little financial sense to rent it on an occasional basis and then decide to leave it vacant otherwise.”
His report also said Airbnb’s entry into the market didn’t correlate with a rise in the number of vacation rental units.
“Instead,” the report stated, “this small number of accommodations simply switched, going from one business model using agents and classified advertising to ‘doing it yourself’ using the Internet.”
Cassiday in an email cited estimates from the Hawaii Tourism Authority that there were approximately 17,000 vacation rental units across the state, putting the “overall impact” at a little over 3 percent of the state’s housing supply.
“This is a very low percentage,” Cassiday told West Hawaii Today. “Most importantly, there are much larger factors that affect our housing market.”
Those issues, the report argued, come down to a fundamental disparity in the state’s ability to supply housing as quickly as demand is rising.
Honolulu, for instance, gains 1,300 households a year but only builds 970 new units of housing, according to the report.
One specific issue with developing housing is the cost.
The study attributes the high cost to a limited availability of land and labor.
And because of that high cost, the report stated, residents are looking for opportunities to supplement their income in order to afford their houses.
One way they do that? Listing their homes on Airbnb.
The report says a typical Airbnb listing in the state can earn close to $9,000 a year, equivalent to getting a 12 percent raise for the median household.
The typical income for a Hawaii Island listing isn’t quite as high, saying a typical listing can earn $5,505 a year. But because the island’s median income is also lower, according to the report, that still equates to a 9.2 percent increase of the $60,033 median income.
And the data suggests that Airbnb helps people keep their home, saying 21 percent of Oahu’s hosts said the income from Airbnb helped them avoid eviction or foreclosure.
In essence, the report said, attention should be given to establishing “responsible and fair” regulations that don’t regulate the business out of the state.
“They should protect and enhance Hawaii’s position globally as a premium place to visit and enjoy recreation. And they should balance the needs of the hosts with the wants of the guests in a win-win fashion,” the report stated.
Suggestions Cassiday gave for regulation included distinguishing between local residents who casually rent their home for supplementary income and commercial ventures.
He also suggested enabling short-term rental platforms to pay taxes on behalf of those who use the systems.
Gov. David Ige last year vetoed a bill that would have let vacation-rental companies collect those taxes.
The governor expressed concern that parts of the bill related to using intermediaries to collect the taxes “provided a shield for owners who do not currently comply with county laws,” according to a report from the Associated Press at the time.