Hawaii Governor Tightens Vacation Rental Regulations
Hawaii’s Governor Josh Green is shaking things up when it comes to tourism in the Aloha State by ramping up rules on vacation rentals. During his State of the State address, he mentioned that about 10,000 rental properties would be removed from the market.
“We need to make sure more local families have access to housing, including short-term rentals that have removed too many units from availability,” Green stated. He also noted that in the coming years, the county will work to return more short-term rentals to the housing market, ensuring that local families can benefit rather than absentee landlords.
Back in May 2024, a law was signed allowing counties more control over short-term rentals to help create affordable housing options. Just recently, the Maui County Legislature approved a bill that phases out numerous “transient vacation rentals” in apartment areas, a response to the aftermath of the catastrophic wildfires in 2023.
Statistics from the Hawaii Department of Business, Economic Development and Tourism indicate that nearly 9 million tourists visited Hawaii in the first eleven months of 2025. This number, however, reflects a minor decline of 0.2% compared to the previous year.
In November, tourist spending saw a significant jump of 15.9%, leading to a reported revenue of $1.77 billion for the state. Meanwhile, a proposed green fee bill, which aimed to boost tourism taxes for climate change initiatives, faced a setback when a judge halted it.
Earlier, the Cruise Lines International Association and related suppliers had launched a legal challenge against Hawaii’s tax plans. On December 31, the 9th U.S. Circuit Court of Appeals stepped in, granting an injunction while the appeal is underway.
The proposed changes to the Transitional Accommodation Tax (TAT) would have raised the cost for tourists staying at hotels and introduced an 11% tax on cruise operations. A spokeswoman for the Hawaii Attorney General’s Office expressed confidence in the legality of the Act and the belief that it would be upheld when the appeal is reviewed.
