Home Hotel industry Honolulu council votes to limit short-term rentals

Honolulu council votes to limit short-term rentals


By Christina Jedra, Honolulu Civil Beat

April 14, 2022

After hours of testimony and lengthy discussions, the Honolulu City Council on Wednesday passed a controversial measure to limit short-term rentals on Oahu.

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The final version of Bill 41, which was approved 8-1, requires a minimum reservation period of 90 days for short-term rentals in most areas of Oahu. The current minimum outside resort areas is 30 days. Short-term rentals would still be allowed in resort areas and in specific areas near resort areas.

The legislation also imposes new restrictions, fees and fines on short-term rentals; prohibits unregistered rental companies from publishing daily rates; require non-compliant rental units in residential neighborhoods to limit visitors to four adults; and requires one off-street parking space for each room rented in residential areas.

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On Tuesday, demonstrators protested Bill 41 with signs on King Street near Honolulu Hale. Short-term rental companies have been organizing against the measure for months. Cory Lum/Civil Beat/2022

Council member Andria Tupola was the only member to vote against. Council members Heidi Tsuneoyshi and Carol Fukunaga both voted yes, but with reservations. The rest of the board voted yes.

“People are just tired,” council chairman Tommy Waters said. “I’m not necessarily against people staying in a bed and breakfast or even in (a walk-through vacation rental) but at some point we have to say enough.”

Bill 41 is now heading to the office of Mayor Rick Blangiardi, who is likely to sign it. His administration proposed the original form of the bill. The order would come into effect 180 days after its approval.

The debate over Bill 41 is part of a larger struggle between the demands of Hawaii’s tourism industry and residents who feel the island is increasingly overrun with tourists. While visitors remained largely confined to the resort area of ​​Waikiki, the proliferation of vacation rentals on online platforms like Airbnb caused problems in residential areas.

Bill 41 has received support from residents who believe short-term rentals are disruptive and have engulfed housing stock, driving up already high property prices.

Proponents of the bill have criticized short-term rental operators as being driven by greed and have suggested they convert their units into long-term accommodation.

“Hawaii neighborhoods are not for sale,” said resident Mathew Johnson, who testified in support of the bill. “They’re descending on this place from everywhere.”

But there was also a mountain of opposition.

Proponents of the bill believe short-term rentals are disruptive and have swallowed up housing stock, driving up already high house prices. Cory Lum/Civil Beat/2021

Many critics pointed to the passage of Bill 89 in 2019, which would have allowed 1,700 vacation rentals to be licensed islandwide. The plan was for Airbnb and Expedia to help the city enforce the new law once the city began issuing new permits.

However, the city never funded seven enforcement positions it created to accompany this law, and the memorandums of understanding with the platforms never took effect because the city did not issue these. new permits.

Proponents of short-term rentals have accused the city of not giving this 2019 law a chance.

“By failing to implement the existing law and corresponding agreement signed by Expedia Group to assist in enforcement, Honolulu County and its residents are left without a policy solution that meaningfully addresses community concerns” , said Richard de Sam Lazaro, spokesperson for Expedia. in a report.

Airbnb also opposed the bill. In a letter to the Honolulu City Council, the rental platform said the legislation represents an unconstitutional grab of property rights.

“Bill 41 severely damages, if not effectively destroys, the reasonable and investment-backed expectations of these owners and may constitute a taking that requires payment of just compensation to aggrieved owners,” the company wrote.

Critics of Bill 41 have also argued that the legislation unfairly favors the hospitality industry and accused the city’s director of permits, whose wife is a hotel manager, of helping craft the bill. legislation in which he has a conflict of interest.

Director of the Department of Planning and Permits Dean Uchida, a supporter of Bill 41, has become the target of criticism because of his wife’s employment in the hospitality industry. Cory Lum/Civil Beat/2021

Department of Planning and Permits Director Dean Uchida denied there was a conflict, but at the urging of the Honolulu Ethics Commission, he recused himself from any involvement in Bil 41 in January.

“This bill is tainted,” Hawaii Kai resident Natalie Iwasa, a frequent critic of the city’s government, said in oral testimony. “I think the whole bill should be shelved.”

There were also more localized complaints with Bill 41.

Stephanie Brooker testified Wednesday that she purchased property in Ko Olina with the intention of renting it out for 30-day periods, but the bill would make her unit illegal.

And the World Surf League of Hawaii said the bill’s 90-day rule could “devastate professional surfing in Hawaii.”

Surfers generally can’t afford the expensive hotels on the North Shore of Oahu, one of the surfing capitals of the world, the organization’s regional director Robin Erb said in testimony. They need affordable, short-term options, she said.

“Please don’t let Hawaii, the birthplace of surfing, be where professional surfing dies,” Erb wrote.

Council not entirely happy with bill

Several council members, even those who voted for the bill, have expressed concerns about the legislation.

Honolulu City Councilmember Carol Fukunaga said there should be allowances for certain types of short-term stays. Cory Lum/Civil Beat/2021

Fukunaga was concerned about removing the option of month-to-month rentals for medical patients, traveling healthcare workers, students, military personnel and others who are staying on Oahu for reasons other than vacation.

She introduced floor drafts of Bill 41 to create exceptions for these groups, but withdrew them at Wednesday’s meeting.

The bill allows tenants of long-term rentals to convert their leases to monthly arrangements.

Councilman Calvin Say observed that the city’s enforcement of the existing short-term rental law appears “weak.” He also previously proposed a draft floor with changes to the bill, but abandoned the effort at the meeting and voted in favor.

Tsuneyoshi, who represents the North Shore, expressed concern about the bill’s ‘punitive’ impact on people who have purchased property in resort areas and will now have to pay registration fees that hotels and timeshares don’t pay.

“Many of these owners are understandably concerned about the fairness of this,” Tsuneyoshi said.

The Councilwoman for District 2 has proposed instituting a tax rate for short-term rentals below the resort rate to compensate for this “unfairness”.

Chairman Tommy Waters noted that it is unclear how much revenue the bill would gain or lose for the city. Zoning Chairman Brandon Elefante, who backed Bill 89 in 2019, made some comments Wednesday but voted yes.

Honolulu City Councilwoman Andria Tupola was the only council member to vote against Bill 41. Cory Lum/Civil Beat/2021

Tupola, whose district covers areas from Ewa to Waianae, described many issues she has with the bill.

She said she opposes illegal vacation rentals and welcomes more enforcement against them, but said Bill 41 is “not an enforcement bill”. The DPP could apply the existing law now, she said.

Tupola questioned why only two hotels would be allowed to operate mauka short-term rentals on Kuhio Avenue in Waikiki — both properties owned by Aqua-Aston, where the DPP manager’s wife works.

The adviser said that the administration had not communicated with her enough about the legislation and that the entire wording of the bill was “very disturbing to me”.

“We’re not supposed to make preferential laws,” Tupola said.

The District 1 Councilwoman also echoed Fukunaga’s concern about temporary workers who need affordable housing. And she lamented that Ko Olina neighborhoods can no longer rent short-term.

“They’ve been complying for years and now they’re being eliminated for no apparent reason,” she said.

Waters acknowledged that he also didn’t understand the rationale behind everything in the bill. He said it could be changed later.

“Vote according to your conscience,” he told members. “I don’t know why there is a line drawn here or there, but we can always come back.”

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