Honolulu one step closer to cracking down on vacation rentals

Local News

Vacation rental operators and their supporters gathered outside City Hall on Thursday. 

If the City Council passes two bills related to vacation rentals, they say it would “devastate” Oahu’s economy and tourism. 

They said it would hurt local businesses, families, and bring fewer visitors to Oahu. 

However, those who support Bills 85 and 89, which would enforce tough restrictions on vacation rentals, say vacation rentals are pushing locals away and that visitors would still come to Hawaii regardless.  

Bills 85 and 89 would put an end to illegal vacation rentals that are unoccupied in residential neighborhoods unless already grandfathered in. 

Bill 89 would allow several new permitted vacation rentals for owners who live in the home but would ban homes that are rented out as an entire home unless they were grandfathered in. 

Except for the North Shore, where even if Bill 89 passes and thousands of permits are given to become a legal Bed and Breakfast, there’s a law in place to prevent it from happening on the North Shore.

“In 2011, ordinance 11-3 of the North Shore Sustainable Communities Plan was adopted and put into law specifies no expansion of short term rentals at all. So even if Bill 89 passes, which is the expansion of Bed and Breakfast, the North Shore community won’t be given the opportunity to apply for permits based on the North Shore Sustainable Communities Plan,” said North Shore council member Heidi Tsuneyoshi. 

Bill 85 would ban all vacation rentals outside of resort zones and establish tougher enforcement and heavy fines, including $5,000 a day for the initial violation and $10,000 a day for a recurring violation. 

Realtors say people are already starting to sell and leave the island. 

About 800 legal rentals on Oahu would be grandfathered in and allowed to continue running. 

The city stopped giving out permits back in 1989. Today, the city estimates there are over 8,000 illegal vacation rentals on Oahu. 

“What has happened since 1989, it’s such a proliferation of use in our residential neighborhoods that we can’t sustain,” Tsuneyoshi said. “So looking to make sure residents can live in their neighborhoods and keep neighborhoods, neighborhoods and see how we go moving forward but enforcement has to happen first.”

Vacation rental operators argued on Thursday that thousands of visitors now stay in what they call alternative lodging and that Oahu would lose 50,000 to 80,000 visitors per month. 

“Businesses in Kailua the restaurants, kayak rental shops, and local art boutiques would all dry up without visitors to rent, shop or eat in Kailua,” said Alorah Kwock, whose family owns Hawaiian Villa Rentals.

But others argue the situation has become out of control. 

“What you have right now is an out of control illegal vacation rental market where in some areas it has pushed affordable housing out for local people to live in,” said council member Kymberly Marcos Pine (Ewa, Kapolei, Makaha). 

She says vacation rentals are popping up in areas like Salt Lake, Kalihi and the once-affordable Kaimuki area. 

“To say that the economy is being devastated you have to wonder will this open more homes to local residents and get the rent back down to an acceptable rate that people can afford?” Pine said. 

Without vacation rentals, operators also argue there won’t be enough hotel rooms for the visitors. 

However, Hawaii tourism experts say that isn’t true because it’s extremely rare for hotels to be at 100% occupancy. 

“More people would opt to stay at a hotel which means we can put more people to work,” said Mufi Hannemann, president and CEO of Hawaii Lodging and Tourism Association. 

“If they are employed, they’ll be able to rent in their own neighborhoods because you wouldn’t have as many illegal vacation rentals to charge two to three times more than they would normally get if they were just renting to the rental market locally,” he said. 

The vacation rental bills are on track to move out of committee tomorrow and to a final hearing by the full council on July 5, 2019. 
 

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