Mayor signs historic bill to regulate short term vacation rentals

Local News

HONOLULU (KHON2) — Mayor Kirk Caldwell signed a bill into law to get a handle on the proliferation of illegal short term vacation rentals.

“I believe the bill 89 is not perfect. I would have liked to have seen a little bit more balance, but as I remind myself and many of you overheard me say, don’t let the perfect get in the way of the good.This is a good bill,” Caldwell said.

Caldwell was surrounded by officials who he said had worked tirelessly to make this happen.

“It is pretty darn good. It will go a long way towards enforcement,” Councilman Ikaika Anderson agreed.

Calwell said the new law was their attempt at leveling the playing field without making short term vacation rentals completely illegal.

It permits those operating the existing 770 Nonconforming Use Certificate (NUC) rentals to continue and allows for additional exceptions.

“You can also have vacation rentals hosted and unhosted in hotel and resort areas Waikiki, Ko Olina, Turtle Bay without a Nonconforming Use Certificate but everything else is illegal whether you pay the GET or TAT whether you pay your State income tax or Federal income tax showing the income you generated from your illegal vacation rental. It’s illegal,” Caldwell explained.

The law even allows 1700 bed and breakfats to apply for permits across the island, not to exceed .5 percent of the total number of dwellings in each regional area, with the exception of the North Shore. New B&Bs are not allowed in the North Shore area based on directives of the North Shore Sustainable Communities Plan.

Registration for permits will begin on October 1, 2020.

“For those who question the ability for Bill 89 to enforce, I must remind everybody that back in 2015 City Council approved $300,000 to the department of planning and permitting to hire six new inspectors to do absolutely nothing but police this industry,” Anderson said.

Enforcement hinges on the DPP conducting digital stings based on short term rental advertisements.

Hosting platforms, such as Expedia or Airbnb, are required to submit monthly reports to DPP regarding rental listings.

Any and all short term vacation rental advertisements must include a permit number from DPP.

Without a permit a $1,000 fine will be imposed the first day, jumping to $5,000 for each additional day. If the rental does not comply after a month, they face a reoccuring fine.

“A reoccurring fine means it’s $10,000 a day. So if people want to ignore the notice from Department of planning and permitting and they want to continue to do this, the fine jumps from $5,000 to 10,000. It’s really pretty tough and we’re hoping it will bring people into compliance,” Caldwell said.

Kathy Sokugawa, acting director of the department of planning and permitting, said the new law also ensures they can afford to enforce it.

“It puts all are fines and fees into a special account that only DPP can draw from. So we can use that money devoted to short term rental administration and enforcement.”

Complaints from neighbors will also continue to be investigated by the DPP.

Since the fine is considered a civil fine, officials can enforce payment in several ways. For example, anyone with outstanding fines could be forced to pay them in order to get their driver’s license renewed or any county permits.

Caldwell vetoed another bill (bill 85) relating to vacation rentals today. He said the two contradicted one another.

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