The city Department of Planning and Permitting has now issued 18 notices of violations to property owners for allegedly violating the city’s new law that bans online advertising of illegal short-term rentals.
Ordinance 19-89, which took effect Aug. 1, makes it illegal to advertise a vacation rental that is not properly permitted or not located inside a hotel-resort zone. It also raised the recurring fine for such a violation to $10,000 daily.
The city issued the first five notices for illegal vacation rental ads beginning with an Aug. 14 notice of violation to Alexander Wilson, who owns unit No. 801 in the Waikiki Townhouse Condos, which has a tax-assessed value of $295,000 and is at 2421 Tusitala St.
That same day, Craig Yeager, who owns unit No. 1304 with a tax-assessed value of $344,400 in the same building, also was cited.
On Aug. 15 the city issued a notice of violation to Michael Miske Jr. for short-term rental advertising at his three-bedroom, two-bath Kailua home at 614 Paokano Loop in Enchanted Lake. The tax- assessed value of the fee-simple home is listed at $862,400.
The city also issued a notice of violation to Encinitas, Calif., investor Michael Farber on Aug. 15 for short-term rental advertising of his two-bedroom, one-bath home. Located at 881 Aalapapa Drive in Kailua, the fee-simple Lanikai beach property has a tax-assessed value of $1.8 million.
Michael McGinnis and Meredith A. Clark also were sent a notice of violation Aug. 15 for short-term rental advertising at unit No. 2503 in the Waikiki Townhouse Condos. The property’s tax-assessed value is $361,900.
According to DPP records, so far only Miske, McGinnis and Clark have resolved their complaints. The Honolulu Star-Advertiser was unable to reach owners for an immediate comment.
DPP spokesman Curtis Lum said, “One took down the ad, and the other changed it to say rental of 30 days or more, which complies with the ordinance.”
According to DPP policy, property owners who receive a notice of violation have seven days to correct the situation before DPP issues a notice of order, whereby fines begin accruing. The initial fine is $1,000 followed by subsequent daily fines of up to $10,000.
Lum said the city so far has not issued any notice-of-order letters or fined any property owners who have advertised unpermitted short-term vacation rentals for periods of less than 30 days. Three of the property owners who were sent notice-of-violation letters are now past the seven-day grace period. However, Lum could not readily say whether the city has begun increased enforcement of these cases.
Since issuing the first batch of violations, DPP Acting Director Kathy Sokugawa said, the city has sent out 13 more notice-of-violation letters, and two of them have been corrected.
The city was not immediately able to release public records related to the 13 subsequent cases, Lum said.
Since Aug. 1, DPP also has issued six violation notices for vacation rentals that were violating longtime occupancy laws.
More city enforcement is expected for what has been a contentious issue on Oahu for decades. The city stopped issuing new permits for both types of vacation rentals in 1989.
There are currently 770 legal ones outside of resort zones, where they are legal without permits. DPP estimates there are 6,000 to 8,000 illegal vacation rentals on Oahu, although some have put the number as high as 20,000.
Larry Bartley, executive director of Save Oahu’s Neighborhoods, said enforcement on Oahu had been lacking for decades.
“We’re hoping the city stands up and stays tough,” Bartley said.
DPP plans to spend $132,000 to hire six temporary, part-time inspectors to assist the department’s 17 full-time permanent inspectors with added enforcement obligations.
K.C. Connors, a Koolauloa community activist, said the city needs to get up to speed quickly because enforcement delays mean more strain on affordable housing and less quality of life for local residents.
Short-term rental advocates counter that the city’s crackdown is depressing property values, dampening tourist demand and resulting in job losses. Some say it’s also hurting residents who were using short-term rentals to get by financially.
Alanna Madrid, who is a single mother living in Kailua, said her landlord had given her permission to use short-term renting to subsidize her own $4,300 monthly rent.
“By no ways did I get rich, but it gave me peace of mind,” Madrid said. “I’m trying to find permanent renters to share the unit with me or longer-term vacation renters, but it’s been really challenging. I’ve fallen behind on my rent, and I’m at risk.”
Under the new law, the city will issue roughly 1,700 new hosted vacation rental permits — but not until October 2020. Madrid said that intervention won’t come fast enough for her.
Some say the increases aren’t broad enough, either. That’s why Kokua Coalition, a group of “30-day rental” operators also known as the Hawaii Vacation Rental Owners Association, and the Association of Apartment Owners of the Waikiki Banyan, a twin-tower, 876-unit condominium, have filed separate suits against the city.
Earlier this week the city said it went to settlement negotiations with Kokua Coalition, which filed a lawsuit Aug. 1 arguing that renters should be allowed to continue renting to a single tenant every 30 days, regardless of how long the tenant actually stays.
The city said there are no updates on the Waikiki Banyan lawsuit. The AOAO of the Waikiki Banyan’s suit sought a permanent injunction preventing the city from imposing its new ordinance on its owners.
Plaintiffs claim 89% of the units in the complex operate as short-term vacation rental units in the property, which they allege has been operating as a condominium hotel since it opened in 1979.
Staff writer Gordon Y.K. Pang contributed to this report.
