Two years ago the city estimated there were up to 8,000 illegal vacation rentals on Oahu. Much of the current strategy for weeding them out with tougher rules and hefty fines is mapped out in Ordinance 19-18, which strikes a firm but fair balance in oversight of the short-term rentals industry.
Under the law, which took effect in August 2019, platform companies are required to file booking reports with the city.
The City Council has set the start date for that provision — along with that for one that will add up to 1,700 hosted bed-and-breakfasts to the legal lineup — for late April.
But actual success in reining in scofflaws will hinge on persistent enforcement efforts.
To that end, it’s encouraging that two online platforms, Airbnb and Expedia, recently signed an agreement with Honolulu Hale that’s expected to make it easier to ensure operators hold city permits and are properly taxed.
The hosting companies provide a marketplace for people to rent their homes, taking a percentage of the fees. Booking reports provided by Airbnb and VRBO, an Expedia subsidiary, are slated to include: tax map key, unit and transient accommodations tax numbers for each property listed online.
In cases of rentals found to be unpermitted, the two companies have agreed to take the ads down. Permanently. The agreement marks a welcome turnaround from a previous practice by platforms of withholding most client information, including the rental’s physical address.
In particular, this alignment of web-based transaction with local law gives the Department of Planning and Permitting (DPP) a fighting chance. Previously, the city agency struggled with an often virtually impossible requirement that tied enforcement action to catching an illegal operation red-handed — at the rental property.
Come January, Mayor-elect Rick Blangiardi, along with the new City Council — five of the panel’s nine members will be newcomers, district winners in this year’s election season — must see to it that DPP is adequately staffed and equipped to keep pace with the data-focused detective work needed to verify whether rentals are legally permitted, and to properly regulate.
It’s apparent that in recent years, DPP’s resources have been too thin to effectively tackle rentals proliferation while also taking on other thorny issues such as monster home proliferation and permitting delays and backlogs. Citing a city audit released in January that found the process to approve building permits is inefficient, Blangiardi is rightly calling for changes.
“Roadmap to Recovery,” Blangiardi’s bullet-point outline for his first 90 days in office amid pandemic challenges, calls for “streamlining processes, making necessary organizational changes, and providing DPP the resources it needs to accomplish its mission.” Follow-through on this much-needed goal will test the new mayor’s resolve, given Honolulu Hale’s recent projection of a revenue shortfall upwards of $400 million due in large part to COVID-19’s economic fallout.
Meanwhile, DPP is continuing to draft rules for the B&B expansion, which will mark the first increase in an inventory of about 800 permitted hosted and unhosted rentals in more than three decades. The agency is now aiming for a public hearing during 2021’s first quarter.
Some rules for B&Bs and unhosted rentals, which make up most of the current inventory, will be the same, such as: advertising or renting an unpermitted vacation rental can fetch a fine of up to $10,000 a day.
With consistent enforcement, these tools and others in the fledgling law could go a long way to helping Honolulu gain better oversight of the vacation rental industry.