In Honolulu, and in many other cities that see a steady stream of visitors, home-sharing platforms are being blamed for contributing to affordable housing shortages and a disintegration of established residential communities, as operators sidestep or attempt to avoid local laws regulating short-term rentals.
It’s evident that there’s no stopping this fast-rising segment of the so-called sharing economy led by online platforms such as Airbnb, which currently lists several million rooms, flats and full houses as short-term rental options in more than 81,000 cities across the globe.
However, for the sake of preserving neighborhood character and in fairness to taxpayers, some jurisdictions are effectively pushing back by putting in place laws that aim to scuttle a Wild West approach to booking rentals. The Honolulu City Council must follow suit with tougher regulation and a viable enforcement strategy. Today.
Up for final Council votes are Bill 89, which would allow the city to issue up to 1,715 new permits for “hosted” bed-and-breakfasts; and Bill 85, which includes provisions that help the city clamp down on illegal operators. Due to high demand outmatching weak regulation, Oahu’s vacation rental inventory includes roughly 800 legally permitted units and at least 8,000 outlaws.
Councilwoman Kymberly Pine recently said the Council needs to spend more time studying the matter. We disagree. The Council has deadlocked on updating regulation for decades; no new vacation rentals have been permitted outside the Waikiki
hotel-resort district (where they are legal) since 1989.
The Council needs to take long-overdue forceful action. While it’s true that this issue is complex, it’s a sure bet that it will become more so, with problems further proliferating, if left unchecked. Any reasonable call for tweaking of new laws can be addressed later.
Factoring into the urgency is a measure awaiting the governor’s signature or veto that authorizes Airbnb, VRBO, HomeAway and others to collect taxes from vacation-rental operators.
The trouble with Senate Bill 1292 is that it shields the platforms from accountability for doing business with illegal operators by allowing information collected — including names and addresses of proprietors — to be kept confidential.
A disclosure provision was stripped from SB 1292, in part, because platforms have asserted in courtroom battles that the First Amendment and the federal Communications Decency Act (1996) shield web providers from liability for third-party content on their sites.
It’s encouraging, though, that in recent challenges — including a 9th Circuit Court of Appeals ruling reaffirming a new accountability-focused law in Santa Monica, Calif. — judges are disputing the expanse of online protection. Federal law should not give web-based business transactions a go-ahead to disregard local laws.
At the city level, Bill 89 would require advertisements for short-term rentals to include either the permit number or street address. Such transparency is key to making sure government gets its due tax revenue while pinpointing illegal rentals for stepped-up county-imposed penalties, slated to start at $1,000 and increase to $50,000 each day for a third recurring violation.
Among the bill’s other promising provisions: new permits would be limited to hosted rentals. That’s a sensible move, as unhosted “whole home” short-term rentals generate the most neighborhood complaints about noise, illegal parking and other matters. Bill 85, meanwhile, loops residents into enforcement efforts, by setting conditions through which neighbors can pursue civil action in court against a suspected illegal operator.
The Council must now do the right thing to avoid further disservice to constituents: Take action already.
