What’s with all the big houses? Some are apartment buildings in disguise

Always Investigating

In Hawaii’s hot real estate market, old homes are bought, torn down, and replaced with something new.

In many areas, that “something new” is raising eyebrows.

Viewers from across Oahu reached out to us concerned that some of these new homes in residential communities are actually apartment complexes.

Some of these new big houses are often rented out to many different families, despite being permitted for single- or at most two-family occupancy.

So how can those breaking the rules be caught?

One quiet Kaneohe street isn’t quite rolling out the welcome mat for the giant house going up next door.

A neighbor heard this when he spoke to the owner: “He explained to my friend, it’s going to be a four, two-bedroom-unit apartment building,” said Glenn Kalopedes, a decades-long resident of the street.

The new build is zoned and permitted for just a single-family dwelling with a wet bar.

“I see these four electrical junction boxes coming out of the ground. What’s that for?” asked longtime neighbor Wendell Hopkins.

The builders on site helped Always Investigating get a hold of the owner.

“It looks like there are four different entrances, enough kitchen equipment for four. Is it going to be rented separately?” Always Investigating asked the owner.

He tells us no, it will stay single family and he’s going to sell it anyway once it’s built.

The neighbors say they’ll be on high alert, just in case more than one family moves in.

“He can build a castle if he wants to,” Hopkins said, “but only one family should live there. More than one family lives there? Shut ‘em right down.”

They say they’re afraid of what could happen next.

“Can you imagine this whole place filled with four families?” Hopkins asked.

A longtime resident of Palolo Valley says it’s already happening in her neighborhood.

“We used to have a beautiful view of our valley, beautiful breeze,” Aurora Muir said. “Now, I have windows I get to look at.”

We checked a property right next to her and learned it’s violating the rules.

City records show it’s zoned single-family plus one ohana unit, but got a notice of violation when city inspectors found four different kitchens and multiple unrelated families.

We tried to reach the owners both in person and through their rental broker, and have had no response yet.

We drove around the neighborhood and saw lots of big houses, two and three stories. We checked building permits on some and found 10, 15 and more bedrooms, and a dozen bathrooms. Most are in either single-family, single-plus-ohana-unit, or max two-family zoning.

The city says while there are regulations on square footage based on lot size, there are no rules about room count.

We asked the city council if that should change.

“We’ve had that discussion with the department before,” said Honolulu City Councilman Ikaika Anderson. “The department always in the past has favored having the flexibility to look at this cases by the allowable building square footage. I’m happy to have that discussion with (the Department of Planning and Permitting) again.”

“We are obligated to issue the permit if it meets building, housing and zoning code regulations/requirements,” the department told us in a statement. “A complaint may be submitted to either the building division or the residential housing/zoning code enforcement section if the operations appear to be in violation of the permitted use. We cannot decide there is a violation before it actually occurs.”

Concerned neighbors say the pace of the development is startling.

We pulled up state conveyance records and traced a slew of lots that sold for top dollar. We cross-referenced that with city data and found building permits that double, triple, even quadruple the former size, eventually on the rental market for thousands a month per unit, even $750 or more a day as vacation rentals.

City records show one was busted for that violation, but we found it still up for travel booking online. We reached out to the owner, who’s also developing next door, and also tried through a former rental representative. We have had no owner response yet.

“I understand people need homes and housing, but I don’t believe these are really helping the homeless,” Muir said. “They’re high rents, because they’re all new. They’re brand new.”

“There are many folks doing it in the confines of the law who are renting these dwellings to local families who need a place to live,” Anderson said.

Often times they’re perfectly legal if they’re sticking to the occupancy rules on actual number of families and only the permitted number of kitchens — not throwing up extra un-permitted interior dividing walls.

But some turn houses into apartment complexes after the city inspectors give them certificate of occupancy (COO).

“You have these unscrupulous people who will get the COO, come back and make all these modifications to the house,” Anderson said.

That turns into an ongoing cat-and-mouse game.

“That’s exactly what happens,” Anderson said. “Then it’s incumbent upon folks to try to get DPP to come back and do a follow-up inspection.”

DPP says it’s up to vigilant neighbors to report suspicious activity.

“The appearance of multiple units is not a violation. An inspection/investigation needs to be done to verify the actual site conditions,” the DPP statement said. “If a violation is identified, appropriate action by DPP will follow. We inspect the work authorized by the building permit during construction and then prior to closing a permit to determine if the work was done according to submitted plans. If the construction doesn’t match the plans, we would issue a Notice of Violation and order the owner to correct the violations.”

We asked the DPP how many notices of violations it has issued for these kinds of rule breakers. Last year, there were 462 NOVs issued, include illegal units and too many occupants as well as other zoning violations.

It can often take multiple violations before a fine sets in, in the form of a Notice of Order. That home we saw on a vacation rental site had violations for repeated vacation rental, over-occupancy and after-the-fact building. After several NOVs, it got a $1,000 fine, just a tad more than a night’s stay there is advertised for.

Councilmember Anderson says fines should be more of a deterrent.

“Let’s say they end up racking up $10,000. It’s not uncommon for fines to be settled for 10 percent of that amount,” Anderson said.

Always Investigating asked, since these things appear to be a goldmine, wouldn’t a flexible fining policy be potentially a minor inconvenience?

“The department will tell you fining the bejesus out of someone is not their goal, compliance is,” Anderson said. “But the point was to drive the message home that if you decide to operate outside the confines of city ordinance and you get caught, you’re going to pay.”

Meanwhile both the council and DPP say it’s up to neighbors to be the eyes and ears to keep things legit.

You can contact the department’s Residential Code Enforcement Branch via its voice message line at (808) 768-8127.

The casualties when illegal rentals are busted are the often unsuspecting tenants who never knew or never asked about zoning and permits. We’re looking into their rights and recourse and will follow up with a report Monday on KHON2 News at 10.

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