Rent high? Don't blame short term rentals said expert
Oahu's shortage and higher costs of housing have been partially blamed on illegal short term rentals, but expects said that is not the case.
The price of living in Hawaii is high, but periodically it can get even more expensive.
Traditionally, when the economy goes up rents will also rise, and when things falter financially rents will drop.
But market researcher Ricky Cassiday said that has not been the case on Oahu.
"This is a good economy. For our rent not to go up, it had to be there was plenty of supply or no real demand for long term rental units...like in Waikiki," stated Cassiday.
Thousands of units in Waikiki were being used as illegal short term vacation rentals, before Bill 89 imposed stricter restrictions and harsher penalties for lawbreakers.
Oahu had a rapid rise in short term vacation rental listings, so what impact did that have on rents?
"To my surprise, rents did not seem to be impacted by the fast growth in Homestay which was 2016, 2017, and 2018," said Cassiday.
Not just for condos in Waikiki, but even rents for single family homes on the Windward side and North Shore, according to Cassiday "When I tracked the growth of Homestay in these areas, the long term rent trend was down. The whole island was roughly the same."
Rents are a good indication of supply. If there is a shortage, rents will go up.
One of the arguments against short term vacation rentals was it caused a shortage of housing.
"People really claimed they were taking units out of the market, but I didn't see that," added Cassiday.
In Kakaako, where many new condos went in, rents were even found to have dropped.
"The reason why the average rent is going down is more listings, there is extra supply," stated Cassiday.
So how much are rents in Honolulu?
"Studios are going from $1,000-1200. One bedrooms go up to $1,600-1700. While two bedrooms range from $1,800-2,400," said realtor Richard Pascua, with XDitto.com.
Rents are even higher for buildings with more amenities or better locations.
Some 2 bedroom units are $1,600 a month with parking along Kapiolani Boulevard.
That is the price of a one bedroom unit elsewhere.
If you look around you'll find condo and apartment listings at most market price points.
"There is just a shortage when it comes to affordable rentals," added Pascua.
Cassiday said he will be tracking rents over the next year, to see if the market is disrupted after current lawsuits challenging the new law are settled and most owners have decided what to do with their former short term vacation rentals.
But he adds it may not make that big of an impact because according to AirBnB data, less than half of owners rented out their vacation property for 6 months or longer.
The majority were rented out at Christmas, over the summer and holidays.