The message came loud and clear from the City Council: It’s time, finally, to crack down on illegal short-term vacation rentals and reclaim residential neighborhoods for their intended occupants — the residents.
It’s an overdue message after decades of illegal units that have proliferated, vexing and disrupting nearby residents. Among the key aspects of Bill 41, passed 8-1 by the Council this week and expected to be signed into law by Mayor Rick Blangiardi:
>> Increases the minimum stay for short-term rentals to three months, up from 30 days.
>> Imposes registration fees for legal short-term rentals and prohibits on-street parking for vacation rentals in rural or residentially zoned areas.
>> Allows vacation rentals only in the resort- zoned areas of Ko Olina, Kuilima, Makaha and parts of Waikiki, with exceptions for some apartment-zoned areas near resort areas.
To be sure, trying to rein in the industry has been difficult, due to online platforms making it easy to do business and advertise, the lucrative nature of vacation rentals bringing extra money into local and investor pockets, and the supplemental services such as housecleaning and gardening that became part of the industry’s ecosystem.
But this rebalancing is necessary, to respect purposeful land-use zoning. Before the COVID-19 pandemic atrophied Hawaii tourism, the city in 2018 estimated that there were 6,000 to 8,000 illegal vacation rentals on Oahu; others estimated that number to be as high as 25,000 unpermitted units outside of hotel-resort zones.
“Short-term rentals are disruptive to the character and fabric of our residential neighborhoods,” Bill 41 rightly states. “They are inconsistent with the land uses that are intended for our residential zoned areas and increase the price of housing for Oahu’s resident population by removing housing stock from the for-sale and long-term rental markets.”
The bill also puts online hosting platforms — think Airbnb and Vrbo — on notice to abide by the new rules, saying such companies “shall exercise reasonable care” to confirm that a bed-and-breakfast home or transient vacation unit is lawfully registered and permitted prior to providing and collecting or receiving a fee for booking services.
For their part, rental hosts will pay a set of fees for the right to do business: $1,000 for initial registration and $500 for annual renewal, plus a $50 advertising registration fee. Property tax rates also would be increased to more accurately reflect the commercialized use of the sites, and hefty fines for violations would be enacted. All those fees will go toward creating a seven-member enforcement branch within the city Department of Planning and Permitting.
And that, ultimately, is what will make or break the promise of this imminent law. Enforcement, enforcement, enforcement.
