The middle ground on the vacation rental issue — permitting a strictly limited number of vacation rentals without overwhelming residential zones on Oahu — seems as elusive as ever, after Wednesday’s flood of protest about Bill 41 delivered at the Honolulu City Council’s daylong hearing.
And yet finding that solution, especially now as tourism rebuilds, is critical. The Blangiardi administration is looking to rein in the illegal short-term rental industry, which plainly needs to happen.
A second measure, Bill 4, would create a tax structure aimed at supporting enforcement, and this also drew grievances from those calling it punitive and unfair.
A crowd of vacation-rental hosts testifying through virtual connections delivered a long list of complaints about Bill 41, which would essentially restrict short-term rentals to resort zones. In the measure’s original form, rentals of terms less than six months in other zones would be prohibited.
One of the barriers to be overcome is the threat of legal challenge from homeowners who now rent their units for a minimum term of 30 days. Revisions proposed by Councilman Brandon Elefante would reduce the minimum lease period from 180 to 90 days, an attempt at a compromise.
This would pose some misalignment with state laws defining short-term rentals as six-month leases. But the overriding concern should be residential need. The
90-day provision would accommodate some short-term renters who are temporary residents, such as traveling nurses, employees or students here for a brief period.
Critics repeatedly described the elimination of the 30-day term as a “taking,” because a legally permitted use of the property would be prohibited without compensation.
This ignores the fact that most short-term rentals are tourist stays, never a use authorized for a residential zone. That’s at the heart of the push for guardrails.
“It has been a ‘taking’ — a taking from the community,” said one bill supporter, Kailua resident Ursula Retherford.
Further, the current proposal is not yet fully workable, largely because online booking platforms such as Airbnb and Expedia have not been enlisted in the revised regulatory system, which would seem essential to any effective enforcement strategy.
At Wednesday’s hearing, many of the Bill 41 opponents said they want the city to finish the job of rulemaking for Ordinance 19-18, enacted more than two years ago under the previous mayor’s administration. When it was under debate as Bill 89, they opposed that as well, but now have thrown their support behind this plan, which would have permitted 1,700 additional bed-and-breakfast operations.
Under that ordinance, the city signed a memorandum of understanding with the booking platforms, but that cooperation is on hold given today’s attempted change in approach. A new MOU is needed if this proposal is to succeed.
For more than 30 years the city had an unenforceable ban on new vacation rentals, resulting in an eruption of illegal businesses seeking to capitalize on an extremely lucrative tourism market. Corporate home purchases exacerbated the problem, further driving up property values.
Some short-term rental advocates say that these “hosts” would not necessarily become long-term landlords to residents. But in many cases, homes otherwise available for full-time rentals, a resource already in short supply, were converted to permanent tourism use.
The bottom line is that Oahu simply cannot sustain vacation rentals without controls. In addition to the loss of homes, the absence of enforcement for so many years has disrupted neighborhoods. Preventing that is precisely why cities adopt zoning ordinances in the first place.
