Volcano Homeowners Face New Threat—From Government

by Christina Sandefur, Goldwater Institute, February 1, 2019

Kilauea’s eruption on the island of Hawai‘i made 2018 a tough year for local businesses. Now a new anti-home-sharing law is threatening to hamper recovery in the town of Volcano, where tourism is the backbone of the economy. Beginning April 1, homeowners won’t be allowed to offer their homes as short-term rentals unless their properties fall within designated “resort zones”—and they can face tens of thousands of dollars in fines for violating that law.

Ironically, homeowners in Volcano could be spared from these regulations if their city were itself rezoned as a “resort zone,” but then they’d have to give up the town’s quiet, residential atmosphere to make way for large hotels. By contrast, home-sharing—the ability to rent one’s home to guests for a short period of time—has allowed local restaurants and businesses to thrive on tourism while still allowing the town to maintain its residential character. That’s not surprising: After all, home-sharing is a residential use, and renting a home for a short period of time doesn’t transform a house into a hotel. But instead of letting local residents decide for themselves how to use their property in a manner that’s consistent with the small-town atmosphere, government officials are forbidding homeowners from welcoming guests who help the local economy thrive.

Bans on home-sharing are usually rationalized on the theory that home-sharing causes noise or excessive traffic. It’s questionable whether that’s really the case, but even if it is, officials should focus on whether owners or tenants are causing nuisances, rather than writing across-the-board bans or discriminating between people based on whether they rent their homes on a short-term or long-term basis. That distinction makes no sense—if people are causing a ruckus, the police can and should put a stop to it, regardless of whether those people are staying for a month or just a single night.

Cities nationwide are now facing litigation over extreme anti-home-sharing regulations that tread on people’s rights without addressing legitimate nuisance concerns. But it doesn’t have to be this way. We’ve crafted a state-level legislative solution that ensures cities can restrict real nuisances—without making responsible property owners into outlaws simply because they let guests stay in their homes overnight. States that have adopted this approach, like Arizona, Tennessee, and Indiana, are protecting their citizens’ rights—promoting quiet, clean, and safe neighborhoods, and obviating the need for statewide litigation against overreaching cities. Property owners coast-to-coast are calling upon lawmakers to follow in these states’ footsteps.

But citizens shouldn’t have to beg the legislatures or courts to protect their rights. City officials have a duty to craft reasonable policy solutions rather than rushing to pass excessive regulations or outright bans on home-sharing that cause more problems than they solve—and that violate people’s constitutional rights. Some cities, like Colorado Springs, are taking care to regulate home-sharing in a lawful manner by focusing on genuine health and safety concerns, making home-sharers follow the same rules as everyone else, and otherwise leaving people free to rent their property as they see fit.

Other officials are taking a more passive approach. Washington, D.C., Mayor Muriel E. Bowser recently refused to sign an anti-home-sharing bill because she believed it was unconstitutional and likely to be overturned by the courts. This came after a federal judge blocked a similar New York City ordinance that forced home-sharing platforms to turn over personal information about their users. (Of course, if Mayor Bowser thinks the D.C. ordinance violates her constituents’ rights, she should have put them first and vetoed the legislation, since the bill can automatically become law even without her signature, after the 30-day congressional review period required for D.C. legislation.)

Home-sharing has become a controversial issue in recent years, and knee-jerk, emotional reactions make for bad laws. They also deprive homeowners of needed economic opportunities–especially in areas where residents are struggling to recover from downturns and disasters, like on Hawai‘i’s Big Island. City officials and state lawmakers alike should take a deep breath and focus on eliminating noise, traffic, and pollution—regardless of whether those problems are caused by an overnight guest or the homeowner himself. Determining who is and is not suitable to stay in a given neighborhood isn’t the government’s job.

Christina Sandefur is the Executive Vice President of the Goldwater Institute.