A public hearing Tuesday on the city’s plan to give permits to about 1,700 Oahu homeowners to operate bed-and-breakfast units raised the question of whether the city’s Department of Planning and Permitting can be trusted to distribute the permits fairly.

Last week five current and former employees of the Department of Planning and Permitting were charged by the U.S. attorney with allegedly soliciting thousands of dollars in bribes for giving favored treatment to building projects — a practice suspected for years. Charges were filed against Wayne Ino­uye, Jocelyn Godoy, Jason Dadez, Jennie Javonillo and Kanani Padeken.

DPP is now in charge of administering the new B&B permit program, which was adopted in 2019. DPP plans to use a lottery system to help select the homeowners who get B&B permits.

One of the testifiers at Tuesday’s hearing, Jonas Dagnant, was concerned about the transparency of the permit selection process following the federal charges filed against DPP employees.

“Particularly given recent federal investigations at your department, there are technologies that exist that are called decentralized random number generators that can be used to provide transparency in the (selection) process,” he said.

“I would urge the department to investigate looking into using this to restore public trust in the lottery system that you are proposing.”

Under the new ordinance, additional B&B permits would be capped at about 1,700, divided among the eight City Council districts. The exception is the North Shore, where the North Shore Sustainable Communities Plan bans new B&Bs.

During the Tuesday public hearing, dozens of people voiced their opinion about the proposed rules for issuing permits.

The three most common concerns were surrounding the lottery system, a requirement that there be a 1,000-foot separation between B&Bs and the lack of enforcement on short-term rentals operating illegally.

The proposed rules would have those who want to operate a short-term rental legally submit an application between Aug. 1 and 30 of each calendar year. The DPP director, who is currently Dean Uchida, would go through the applications and put those that qualify into a lottery. One application from each of the eight development plan areas on the island would be selected. After a dwelling is selected, all the applications within a 1,000-foot radius would then be disqualified. The process would continue until the density limit in each development plan area is reached. The density limit in each development plan area is calculated using U.S. Census data. The number of vacation units is limited to 0.5% of the number of homes in the development plan area.

Karen Mahoney, who owns a home in Waimanalo, was one of the many testifiers who did not think the 1,000-foot rule would be fair.

“The thing that is not workable in our neighborhood is the 1,000-foot limit. There are already a couple of (legal B&B operators) in the neighborhood, and that almost precludes everyone else from even being able to apply,” she said.

“We could have all the neighbors write letters and say yes, this is fine that this person gets a permit, but that 1,000-foot rule is going to interrupt that. So I would like to suggest that we change that to 250 feet.”

Randy Meyers, who lives on the North Shore, was not convinced that enforcement would be effective, as he noted that DPP can barely keep up with the current complaints.

“If you don’t come in and enforce these illegal guys, you’re never going to be able to make this system work,” he said.

“My suggestion is that you take care of what you’ve got in front of you first before you go off and these new permits, because the lack of enforcement is horrible.”

One of the proposed rules that everyone could agree was a positive change was the publishing of all the permitted short-term rentals, which would include names and addresses of all hotels, and legal short-term rental units.

DPP will take the public testimony into consideration, and plans to adopt the new rules by Aug. 1.