As the Blangiardi administration starts to get blowback for its tougher stance on short-term vacation rentals (STRs), it’s appropriate to consider the competing interests, and whose ox is getting gored.
When then-Mayor Kirk Caldwell signed into law Ordinance 19-18 on June 25, 2019, it culminated years of effort to reach a solution to the short-term vacation rental problem — a compromise that would combine stricter regulations and enforcement with a controlled expansion of B&Bs in residential neighborhoods.
At the time, it seemed like a reasonable solution. The insatiable demand for vacation rentals – with about 800 legal businesses competing with as many as 10,000 illegal ones on Oahu — would be alleviated with the introduction of roughly 1,700 new, carefully regulated B&Bs.
But the current mayor, Rick Blangiardi, and Dean Uchida, director of the city’s Department of Planning and Permitting (DPP), thought otherwise. They introduced revisions that would impose even stricter regulations on B&Bs.
New short-term rentals in residentially zoned areas would be banned. New STRs would be allowed only near specific resort-zoned areas, including Kuilima, Ko Olina and Waikiki.
Violations would be increased to up to $25,000 per violation per day.
The property tax rates on B&Bs and transient vacation units (TVUs) would go up. The revenue raised from these properties, as much as $3.1 million, would be used to enforce the rules, a necessary improvement over years of lackluster policing.
And significantly, the 30-day minimum for renting a home without a special permit would be increased to 180 days. The intent is to curb violators who continue to accommodate short-term visitors under the guise of a 30-day rental.
At a meeting last week, the city Planning Commission got an earful from more than 200 testifiers, most of whom opposed some or all of the proposed changes.
Predictably, the vacation rental industry is fuming, while the hotel industry — facing fierce competition from a highly desirable product — is generally supportive.
But individual homeowners have a stake, too. One goal of the stricter rules is to encourage would-be B&B operators to rent to long-term tenants, helping to alleviate the critical housing shortage on an island where the median price for a single-family home just topped
$1 million.
The problem: They may not want to. As one Star-Advertiser letter writer put it, “I will never open my guest suite for long-term renters because I want to keep the unit for my family to visit. I believe if the homeowner is a resident on property, he or she should be allowed 30- to 180-day rentals.”
The writer has a point. DPP, acknowledging that it’s not just tourists who need a place to stay temporarily, amended the proposal to add exemptions to the
180-day restriction for temporary employees at health care facilities, full-time students, full-time remote workers, military personnel and homeowners in transition. The city should consider more flexible options as well, perhaps changing the 180-day minimum to something shorter, like 90 days.
The change could be mutually beneficial: It would allow a home-rich but cash-poor homeowner to earn a little extra money without disrupting the residential character of the neighborhood. At the same time, it would discourage profit-driven speculators, including those who would dodge the 30-day minimum in pursuit of the more lucrative tourist dollar.
The city appears to be on the right track in getting control of STRs, which, thanks to high demand and little oversight, have been out of control for too long.
As the process moves forward, weighing the concerns of the various private interests will be important — but the public interest must be paramount.
