Honolulu City Council members today might finally vote on two bills that would impose new regulations and higher penalties on illegal vacation rentals.
Bill 89 (2018) Opens in a new tab would allow permits to be issued, for the first time in three decades, for up to about 1,715 additional bed-and-breakfast establishments (B&Bs), but no permits would be allowed for vacation rental homes (transient vacation units, or TVUs).
On Oahu, B&Bs and TVUs collectively are short-term rentals — leased to parties for less than 30 days.
The city stopped issuing permits for short-term rentals in 1989. There are currently 816 legal short-term rentals left on Oahu. But the city Department of Planning and Permitting estimates there are 6,000 to 8,000 illegal vacation rentals. The advent of online platforms where vacationers can find rentals has contributed to the growth.
Bill 85 (2018) Opens in a new tab would impose higher fines for illegal units and provide new enforcement tools to the Department of Planning and Permitting.
Airbnb and Expedia operate the largest online platforms where vacation rental operators advertise. They staunchly oppose both bills. And while Bill 89 offers an avenue for B&Bs, it gives no path to operate legally for the home rental operators that are the lifeblood of the industry. The industry leaders also contend that language requiring permitted vacation rentals to be at least 1,000 feet apart from each other will decimate their ranks.
Opponents of vacation rentals would prefer the Council pass Bill 85 because they don’t want the city to permit any new rentals until DPP can get a better grip on enforcement. The hotel union Unite Here Local 5 is that bill’s biggest supporter. But the Hawaii Hotel and Lodging Association is OK with allowing some B&Bs through Bill 89, and even the citizen advocacy group Save Oahu’s Neighborhoods is acknowledging it would be a compromise they could accept.
At the heart of the decades-old debate over vacation rentals are two issues:
Housing
Many vacation rental owners have testified that the income they get helps them stay financially afloat and able to afford their homes. Critics say homes now being used for vacation rentals take away from badly needed housing inventory.
Tourism
Proponents of vacation rentals argue that government policymakers need to embrace the growing number of visitors in search of a different experience that doesn’t involve traditional hotel accommodations or risk losing them to other destinations. The counterargument is that the continued existence of short-term rentals is damaging to the hotel industry and the jobs it provides.
While several generations of Honolulu Councils have wrestled with the vacation rental question without success, most of the current Council members have indicated they want to approve something today.
It’s shaping up to be a long meeting. As of Friday afternoon more than 150 people had signed up to testify on the two bills.
