Oahu Airbnb Laws: Where’d the Aloha Go?

When it comes to tourism, Hawaii has always punched way above its weight class. Nearly 10 million tourists visited the islands in 2018, with nearly 80% of those visits accounted for between Oahu and Maui alone. That’s more than seven annual tourists for every permanent resident! It’s no wonder Oahu Airbnb laws are now some of the strictest in the country.

In the early days, the math was working really well for Airbnb hosts looking to retire early, but not so great for locals trying to rent an apartment or buy a starter home on Oahu. Too many tourists. Not enough hotel rooms. Nowhere near enough land!

Oahu Airbnb Laws Take No Prisoners

Nearly seven out of every ten Hawaii state residents live on Oahu. It’s a crowded place to say the least and when Airbnb exploded a decade ago, the impact was nearly immediate. Long-term Oahu residents reacted with persistent demands for better enforcement of existing short term rental bans already in place across the island. New enforcement mechanisms, along with a limited pool of new Airbnb permits, arrived full force in June 2019 with Ordinance 19-18.

Here’s a quick summary of Oahu Airbnb regulations, as of July 2020:

  • Permits: 1,700 short term rental (B&B) permits are available island-wide, with designated caps equal to 0.5% of the total number of dwelling units in each regional development plan area. Registration available starting October 1, 2020 and there is currently no application process in place. Once you have a permit, your right to operate an Airbnb is still quite restricted!
  • Hosting: Only hosted rentals are permitted and the owner of the property (not a manager) must be present during the stay.
  • Bedrooms: A maximum of only two bedrooms can be rented out via Airbnb, VRBO, etc. at any one time, to a maximum of four (4) guests. One off street parking space is required per bedroom made available for short term stays.
  • Fines: $5,000-10,000 per day, while the violation persists. Authorities have the option to also tack on actual revenue received. Fines can be imposed for merely advertising an illegal short-term rental.
  • North Shore: No new permits are allocated for the North Shore area, due to local restrictions in the development plan.
  • Short Term: Any stay of less than thirty (30) consecutive days is considered a short term rental on Oahu.
  • Exceptions: Properties in “resort / resort mixed-use” zoning areas can operate as short term rentals, unless prohibited by HOA or other house rules. The 800+ properties with non-conforming use certificates (NUCs) dating to 1990 or prior issuance can also do Airbnb rentals. Finally, the few condo buildings legally operating as hotels can also engage in short term rentals on Oahu.
  • Fees: Whoa! There’s a $1,000 initial application fee for a permit, plus a $2,000 annual renewal fee. You’ll also have to file paperwork showing you’ve paid all GET and TAT for the year.
  • Taxes: 4.5% General Excise Tax (GET) applies to all Oahu gross rental revenue (short term or long term). An additional 10.25% Transient Accommodation Tax (TAT) applies to gross rental income from all stays shorter than 180 days.
  • Proximity: No two Airbnb rentals can be within 1,000 feet of each other, which is reflected in the permit lottery results.
  • Permit Priority: Permits are assigned on a first-come, first-served basis, then by lottery to resolve conflicts. The current guidance on how this actually works is vague, to say the least.

Still have questions about Oahu Airbnb rules?

Check out this excellent FAQ from the Honolulu Department of Planning & Permitting (DPP).

Got it all figured out?

Check out our epic Airbnb hosting best practices article for 99 ways to optimize your vacation rental.