Short-term rentals like Airbnb and VRBO began as a way for homeowners to earn a little extra by hosting travelers. A win-win, right?
But in Hawaiʻi, that good idea has grown into a colossal problem.
What started as neighborly hospitality has turned into an industry that’s pricing kamaʻāina out of their own communities.
The truth is: Short-term rentals are now one of the biggest threats to affordable housing in our state.
Why? Because investors can make up to four times more money renting to tourists than to local families. And kamaʻāina lose.
If you think we can solve Hawaii’s housing crisis just by building more homes — think again. This is bigger than supply. It’s about the scale and financial leverage who’s buying, who’s profiting, and who’s being pushed out.
Let’s look at the numbers — and why this problem can’t be ignored.
The Shocking Scale of Hawaii’s Short-Term Rental Problem
How big is the short-term rental problem in Hawaiʻi?
Governor Josh Green revealed that Hawaiʻi has an estimated 89,000 short-term rentals—yet only 15,000 of them are legal.
That means a staggering 83% are operating illegally.
Let that sink in:
Most vacation rentals in Hawaiʻi are breaking the law—and they’re displacing local families from housing.
And it gets worse.
Who’s Really Profiting?
52% of all short-term rentals in Hawaiʻi are owned by out-of-state investors.
Most of the money they make doesn’t stay in our islands — it leaves with them.27% of STR owners own 20 or more units each.
That’s not a local family trying to make ends meet. That’s a real estate empire.
This isn’t just a housing issue anymore.
It’s an exploitation extraction economy — and kamaʻāina are the losers.
On Maui and Kauaʻi, the Numbers Are Even Worse
According to the University of Hawaiʻi Economic Research Organization (UHERO):
14% of all housing on Maui are short-term rentals
32% of Maui housing is owned by out-of-state owners
Over 16% of Kauaʻi housing is short-term rentals
And yet, only a tiny fraction of local residents actually rely on STR income.
Meanwhile, 4 out of 5 people in Hawaiʻi can’t afford to buy a home at today’s prices.
Up in Lāhainā?
- 87% of the homes north of town are STRs, according to Maui Strong.
How Short-Term Rentals Are Devastating Kamaʻāina Housing
Let’s get real:
This isn’t just a housing issue anymore—it’s straight-up pushing locals out.
Why?
Because renting to tourists pays up to four times more than renting to a local family.
That means an ʻohana kamaʻāina — already stretched thin — simply cannot compete with tourist dollars.
Think about it:
To offer the same return as a tourist rental, a local renter would need to make 126% more money per paycheck.
Can you walk into your boss’s office and ask for a 126% raise? Of course not.
But for investors, the math is easy: More tourists = more profit.
So they don’t rent to locals—they chase the money instead.
The Community Cost of Chasing Profit
Every STR unit is a home that’s not available for a local family.
It’s a systemic removal of kamaʻāina from their own communities.
UHERO’s research couldn’t be more clear:
“Each STR represents a housing unit that could otherwise be part of the local supply of permanent housing… diverting units from the pool of long-term housing reduces long-term housing supply and pushes up rents and home prices.”
Translation:
Short-term rentals shrink the supply of homes for locals and make every remaining home more expensive.
This is exactly how kamaʻāina get priced out of paradise.
You Can’t Build Your Way Out of This
A lot of people think the answer is simple:
“Just build more homes.”
But here’s the problem:
Out-of-state investors can outbuy new homes faster than we can build them.
Every time a new house goes up, there’s a mainland buyer ready to swoop in — many offering cash, over the asking price, no questions asked.
And they’re not buying it to raise a family.
They’re buying it to turn a profit on tourists.
It’s Not a Housing Shortage — It’s a Rigged Bidding War
Local families save for years just to make an offer.
Then a mainland investor shows up and throws down $200K over asking.
Who do you think the seller’s going to choose?
This isn’t a fair market—it’s a feeding frenzy. And kamaʻāina are getting shoved out of the way.
Prices Are Already Out of Reach
Hawaiʻi’s median home price is over $1 million—and climbing.
Financial experts say you shouldn’t spend more than 30% of your income on housing.
But in Honolulu? The average family needs 73% of their income just to pay the mortgage.
For low-income families, it’s even worse — 147%.
That’s not “hard.” That’s impossible.
We’re Running Out of Land
We live on islands. Every house built takes up a little more of our finite ʻāina.
And as the available land gets bought up, the remaining lots get even more expensive.
Short-term rentals eat up this limited space and turn it into cash machines for investors.
But for kamaʻāina, those homes represent something else entirely:
A future. A home. A place to belong.
What’s the End Goal?
Let’s not lose sight of the real issue here:
Short-term rentals are pricing out kamaʻāina so investors can profit off tourists.
Out-of-state owners are buying up homes, not to live in — but to rent out for max tourist dollars.
The money they make doesn’t stay here. It leaves the islands with them.
They see homes as investments. We see them as our roots.
This Is a Decision About Values
Do we want neighborhoods full of rental properties for tourists… or homes for local families?
Because we can’t have both.
The more STRs we allow in our residential communities, the fewer chances our keiki will have to stay here and raise their own families.
What Needs to Happen
✅ We need updated laws to reduce short-term rentals in residential zones.
✅ We need to return homes to kamaʻāina, not investors chasing profits.
✅ We need to prioritize housing for people who live here, not visit here.
Reducing STRs won’t fix everything. But it will bring thousands of homes back into the long-term rental and ownership market — and that’s a big start.
Because no one should be forced to leave their home just so someone else can vacation in it.
If this opened your eyes to what’s really happening with short-term rentals in Hawaiʻi, share it with someone you know.
We can’t fix what we don’t understand—and the more kamaʻāina know what we’re up against, the better chance we have of protecting our homes, our ʻohana, and our future.