It will be interesting to see what happens to the local housing market. Prices have exploded in the last couple of years as more condos were bought up to become STR properties. It will still be difficult to afford the maintenance fees and prices, but hopefully housing won't be bought up just to rent out at short term rates. It won't be as much of a business anymore. However, even prices for private homes not being used for STR have risen a lot. There is the problem of gentrification of the more desirable areas. Even if not STR, a limited number of housing units are being bought up as vacation homes or even primary residences by those with means, driving up prices and squeezing out the local population. I see that happening even where I live on the mainland. STR is just one of many factors.
I see both sides of this debate. If I were an owner, I would like to be able to do with my property as I please, and if STR was the most profitable for me, I'd like to be able to do it. I would also be upset if the rules of the game are changed after I've made an investment. However, if I wanted to actually live there, I'd be upset about the lack of any housing at reasonable prices, either for rent or for purchase. I would not be able to compete with short term renters willing to spend a fortune for a week or two of lodging.
On the other hand, supply and demand will drive prices up regardless of how the property ends up being used. I looked at Kahoma Village next to Cannery Mall a few years back. They were supposed to be houses for local residents. At over $600K, they were already expensive, but they sell for over $1M these days as people with money like the location and are willing to pay whatever it takes to own a house there.
I think overall, the local area will benefit from less STR of what would otherwise be long term housing units. Hopefully housing prices will come down if a law like this is enacted. However I think this will be fought in court for some time to come. Housing will still remain unaffordable for local workers, even if prices come down some.
I don't think true timeshares will be subject to this law. It is one thing to stop full ownership properties from being short-term rentals vs changing the basic ownership structure of a timeshare.
