Honolulu Hale’s latest plan to address longstanding problems tied to short-term vacation rentals is getting pushback from both residents who want to see the city crack down hard on illegal rentals and those seeking a lighter touch.
Most of those who testified Wednesday before the city’s Planning Commission on Mayor Kirk Caldwell’s draft omnibus bill objected to something about it. But that’s to be expected as the envisioned changes would bring both pain and gain. While not a fix-all measure, it could serve as a step toward correcting troubles triggered by three decades of weak regulation and poor enforcement.
In the late 1980s, the City Council adopted a measure that banned the opening of new bed-and-breakfast establishments, and limited new transient vacation units to hotel-resort zones. As a result, the current legal inventory totals about 800 B&Bs and TVUs. The illegal inventory, though: an estimated 8,000 to 10,000 operations.
The anonymity allowed by online advertising through brokers like Airbnb and the state’s ongoing record streaks in visitor arrivals — now well into a seventh year — are contributing to the climbing illegal count as vacation rentals are often much cheaper than a traditional hotel booking.
By failing to crack down on outlaws — largely TVUs, with absentee owners — or expand the legal inventory, the city has missed out on a mountain of cash tethered to fines and tax revenues.
In years past, the Council’s efforts to tackle the matter has repeatedly stalled amid standoffs involving those who see vacation rentals as a means to provide homeowners with a way to earn extra cash, and those who justifiably argue that the proliferation is straining established structure in residential neighborhoods.
As residents take sides on the current plan, city leaders must find a way to push forward with changes. Inaction threatens to further undermine local government’s framework for land-use and business operations.
Among the more controversial elements of the plan is a pitch to allow an unlimited count of hosted bed-and-breakfasts in residential areas, apartment districts, business districts and mixed-use districts, including every street in Waikiki. Critics worry that lifting the B&B cap would only bring more snags — further transforming quiet streets into makeshift vacation-stay strips.
However, there’s reason to believe that may not be the case. Under the plan, both B&Bs and TVUs would see an increase in property taxes, a needed hike that could dampen enthusiasm among would-be operators.
The unhosted TVU count would be limited to 1 percent of all available housing units in each of the nine planning regions as defined in the city General Plan. They would be banned from areas zoned for single-family residential but allowed in apartment and business mixed-use zones. A tight grip is needed on TVUs as they’re culprits in noise- and traffic-related headaches in many Oahu neighborhoods.
Also, illegal advertising would be slapped with a stepped-up penalty starting at $25,000 per day, ramping up to $100,000 a day. Failure to pay would result in liens against the property and other penalties. Such pricey consequences are needed to deter would-be underground operators.
In the end, though, the all-important key to seeing any substantial gain linked to tougher regulation is enforcement. Rather than assembling a small army of compliance inspectors, Caldwell’s plan sensibly taps technology. Vacation rentals would need a registration number on all advertising, including on social media platforms. If the registration number is not shown, a violation is issued.
City leaders, with input from concerned residents, must persist in forging a plan that holds potential to serve as a balance between collecting taxes owed and deterring the rise of illegal vacation rentals. Honolulu cannot afford another year of inaction.
