Vacation rentals’ fates hang in the balance

Local News

No more vacation rentals in your neighborhood? 

That’s one of two bills being considered by the City Council — that could drastically change Hawaii’s vacation rental industry. 

The Hawaii Lodging and Tourism Association, representing Hawaii’s top revenue-generating industry, supports the bill that would allow for modest expansion of bed-and-breakfasts run by homeowners — and would require other vacation rentals to operate only in resort areas. 

President and CEO Mufi Hannemann says, “If they fall under the bed-and-breakfast, which is an owner-occupant, they get a homeowner exemption, as I said, we’re okay with bed and breakfasts, one and two bedrooms. what we’re not okay with, is transient vacation rentals with absentee ownership and they’re renting rooms out, 4 and 5 rooms, and charging these exorbitant rents and not paying the taxes.”

Any online platform that offers booking of such properties would have to register with the City.

The other bill would tightly restrict operation of all vacation rentals — and would place stringent requirements on their advertising, among other things.

Michele Baginski is the owner of Under A Hula Moon — a shop in Kailua featuring the work of 43 local artisans. She also operates a bed and breakfast in Kailua.

“I understand, there’s a lot of wonderful places, vacation rentals that offer such great experiences for people coming into Hawaii, and as long as they’re covering their taxes and running a good business that’s not disturbing others, I don’t see a problem.”

She is opposed to vacation rentals run by absentee owners. 

UniteHere, representing Hawaii’s unionized hotel workers, supports both bills, saying that vacation rentals take affordable housing away from local residents.

Michael Biechler, a North Shore advocate and property attorney, is part of a Windward Oahu group that also believes the vacation rental industry has taken affordable rental homes away from local residents.

But, he says, “The new bill is limiting it to two bedrooms and a certain number of guests, and that’s a reasonable, I think a reasonable compromise.”

On the other side of the issue, the Oahu Short-Term Rental Alliance supports whole-home vacation rentals. It will stage a protest Wednesday morning at Honolulu Hale as the Council prepares to meet. 

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