Airbnbs are often a great lodging option for vacationers, as they give the feeling of being a local and are usually cheaper than traditional hotels. While these short-term rentals are appealing to many, they significantly contribute to the U.S. Housing crisis. Airbnbs have played such a prominent role in this crisis that their impact was recently dubbed the “Airbnb effect.” In Hawai’i, laws had to be put in place to reduce the damage done by these popular vacation accommodations.
What is The “Airbnb Effect?”
In recent years, Airbnb has been a significant player in the U.S. housing crisis. The vacation rental company, which specializes in short-term rentals and homestays, has caused what is known as the “Airbnb effect.” The term “Airbnb effect” comes from a growing number of rental hosts converting long-term housing into short-term rentals for vacationers. This practice leaves many local families unable to access affordable housing.
COVID-19 played a significant role in the emergence of this phenomenon. The pandemic resulted in two major social and economic trends within the United States: A growing demand for vacation rentals and a desire for multiple streams of income. Because Airbnb allows almost anyone to list their space for rental, an increasing number of Americans have become rental hosts as a way to make more money. Hosts that can afford to purchase a home or apartment separate from their own have been doing so and listing them for short-term rental on Airbnb’s website. While this practice does allow Airbnb to meet growing consumer demands for vacation rentals, it leaves many Americans unable to find affordable, long-term housing.
Hawai’i is Suffering From The “Airbnb Effect”
Hawai’i is an expensive state to live in due to factors such as high tax rates and nature preservation efforts. Nonetheless, the island-state is becoming an increasingly popular tourist and living destination, which is threatening the state’s rich wildlife and nature. The growing demand to move to and visit Hawai’i means that more living and vacation accommodations must be built. However, Hawaiian governments have not been supporting this demand. Instead, they are taking initiatives to prevent the construction of new accommodations from reducing the flow of people into the state.
However, as more Hawaiian Airbnb hosts convert long-term accommodations into short-term rentals, many locals are left with a limited housing market. This in combination with the state’s high taxes and nature preservation efforts makes finding affordable housing extremely difficult. As a result, the “Airbnb effect” is playing a key role in the state’s housing crisis.
Oahu, Hawai’i’s most visited island, recently passed a law to reduce the negative consequences of the “Airbnb effect.” The law requires a minimum stay of 90 days in any short-term rental contract. Previously, the minimum stay length was only 30 days. The law is estimated to impact about 1,000 properties. Mayor of Honolulu, Rick Blangiardi, says that the law aims to “protect local communities and preserve natural resources in the decades to come.”
The law also says that daily or less than 3-month rental rates for short-term accommodations may not be advertised. Listings must also include the following statement: “This property may not be rented for less than 90 consecutive days. Rental prices will not be reduced or adjusted based on the number of days the rental is actually used or occupied.”
Airbnb is arguing that short-term rentals for medical workers, military personnel, and nonprofits that are doing work in Hawai’i should be an exception to the law.
It is important to remember that the “Airbnb effect” is not just exclusive to Hawai’i. People in every state experience the effects that short-term rentals have on the housing crisis. As pandemic-related travel restrictions continue to ease, the demand for travel will increase. Because of this, the “Airbnb effect” will persist and affect those in need of housing. So, before turning to cheap short-term rentals for vacation, consider how it may be affecting the local community.