A settlement deal reached between a group of vacation rental operators and the city, and approved by a federal judge last year, allows the so-called 30-day vacation rental — a lease for 30 days, even if the renter stays for just a few weeks or days. During that monthlong period, no one else, not even the owner, is allowed to occupy the rental.
That agreement, reached following an earlier lawsuit filed by the the Hawaii Vacation Rental Owners Association, also known as the Kokua Coalition, is a good deal for the nonprofit’s residential property-
owner members, who want the flexibility and income that come with renting to tourists and other short-term tenants rather than residents seeking long-term housing.
But the deal holds potential to be problematic for Honolulu Hale as it launches a much-needed effort to crack down on illegal vacation rentals. There are some 770 permitted units, but about 10 times as many illegal units on Oahu, according to some estimates.
Last week, the coalition, which earlier this month had sought a restraining order in federal court to stop city enforcement action, instead opted to work with the city on a plan to allow 30-day vacation rentals to continue.
If Kokua Coalition members hold up their end of the current agreement, they each would issue no more than 12 lease contracts a year. For residents concerned about neighborhoods zoned as residential turning into de facto commercial resort areas, the monthlong limit could sound like a bit of relief.
However, to guard against any temptation to use the 30-day rental contract as a ruse to operate a high-churn illegal vacation rental, the city needs to renegotiate settlement terms to ensure full compliance with Ordinance 19-018, which took effect this month.
The new law’s enforcer, the city’s Department of Planning and Permitting, is now poring over online advertising listings for dwellings to be rented or leased as short-term — less than 30 days. Those lacking city-issued certification can be flagged for possible daily fines of up to $10,000.
The city should hold Kokua Coalition members and others tied to 30-day vacation rental contracts to similar certification or registration requirements. And unlike other vacation rentals, the monthlong type should not be allowed to advertise daily rates.
In addition, their tax rate should be higher than the residential rate, as is now the case for city-permitted hosted bed-and-breakfast and unhosted transient vacation units (TVUs). And 30-day rentals should heed the new law’s stance on matters such as residential parking and noise levels.
Further, for the sake of enforcement of regulations, the city should gather 30-day rentals into a special category. Other than the honor system, there appears to be no way to ensure that such a rental is not being sublet or otherwise skirting the law short of an enforcement stakeout — catching an illegal operator red-handed.
Three decades ago, when residents complained that vacation rentals were becoming too intrusive in residential neighborhoods, the city stopped issuing permits. Since then, due to steadily climbing demand — spurred on in recent years by the popularity of online home-sharing platforms, like Airbnb — illegal operations proliferated under weak city regulation and enforcement strategy.
Under the new ordinance, the city will issue roughly 1,700 new hosted vacation rental permits — but not until October 2020. In the meantime, groups like the Kokua Coalition can be expected to challenge the tougher tactics.
As the city attempts to revise an agreement with the coalition, it must strive to rid the 30-day rental contract of any provision that holds potential to stymie effective enforcement of the new law.