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During the height of Covid 19, many benefited from emptier beaches and clearer highways, with fewer tourists in town to swim and surf.

But the vast majority of locals struggled to make ends meet. As our economy suffered — dependent on a travel industry then decimated by the pandemic — some even moved away because of the high cost of living.

The hotel industry lobby lost no time in capturing frustrations with tourist impacts for their own benefit, successfully pushing through massive, confusing, and likely devastating changes for residents in the form of Bill 41, which recently passed the Honolulu City Council.

As the original bill states, “The City Council finds that any economic benefits of opening up our residential areas to tourism are far outweighed by the negative impacts to our neighborhoods and local residents.”

But the real intent of Bill 41 is to eliminate what are legal short- and medium-term rentals — not only in residential areas, but also in resort areas (areas zoned with the purpose of serving the visitor population) — with the primary goal of pushing most tourists and vacationing residents to stay in hotels.

Bill Was ‘Rammed Through’

To start, Bill 41 will impart a heavy toll on legal short-term rental owners, many of whom share their property to make ends meet and afford to live here. Many are seniors, like me, who bought resort rental properties as part of their retirement plan.

Currently, each resort-zoned unit must pay a 4.7% general excise tax, 10.5% state transient accommodations tax, and new 3% city transient accommodations tax (over 18% on every dollar) in addition to property and income taxes.

If Bill 41’s associated is passed, that tax rate will increase by four times — in addition to a license fee of $1,000 and potential fines of up to $25,000, along with the potential for unnamed criminal penalties.

Under Bill 41, Department of Planning and Permitting restrictions and standards include complex rules and restrictions, such as the owner/operator must maintain the names and telephone numbers of all transient occupants for two years, and owners must carry at least $1 million in commercial liability insurance.

The costs and additional bureaucracy of Bill 41, to be signed by the mayor shortly, will drive up the costs of legal rentals — no question. And as fewer owners rent, won’t rental supply decrease?

So who is benefiting from this new law? How much will it harm local families and businesses?

Will burdening the legal short-term rentals in resort areas help keep short-term rentals out of residential areas? Where is the economic analysis of the effects of this law?

Hotels will benefit, surely, but nobody knows answers to these questions because Bill 41 was rammed through without going through normal protocol for massive changes in law.

The costs and additional bureaucracy of Bill 41 will drive up the costs of legal rentals.

There was no fiscal note, study cited, or data-driven discussion throughout the process, which was further hindered by Covid-related restrictions.

We need reasonable solutions for the people and businesses of Hawaii and a process that makes sense. While Bill 41 was supposed to eliminate short-term rentals in residential neighborhoods, it created instead a terrible tangle of regulations on resort properties that do not need controls and will suffer greatly.

My own family’s dreams for the years ahead, for me and the next generations, are quickly evaporating with Bill 41’s passage.

I can only hope people wake up to what is happening and speak up, before the hotel industry pushes more of us, especially seniors and our families, into difficult living, budgetary and personal choices.