Focus B&B rules on enforcement

The city Department of Planning and Permitting is drafting a bill, guided in part by resolutions the Honolulu City Council adopted last fall on how to regulate bed and breakfasts (B&B) and transient accommodation units (TVUs).

As the elements of the bill start to come into focus, it’s good to see that DPP officials seem clear on the concept that enabling enforcement is key to successful regulation reform.

“I am personally not going to support or (put forward) a bill to allow any more short-term rentals if it doesn’t have a strong set of new enforcement tools,” Kathy Sokugawa, acting DPP director, told Honolulu Star-Advertiser writer Gordon Pang.

It’s a necessary position to take as the city considers issuing new permits for vacation rentals. The standards proposed by the Council, relayed to DPP, should be met at a minimum. An initial fine of $5,000 would be issued for a first violation, compounded by daily fines of $5,000 until the violation is corrected. Penalties would rise for subsequent offenses.

Hosts could be cited for failing to include a permit number and address in advertising. Having this as one enforcement route would be more feasible than current law, which requires the actual rental activity and duration be documented. That can be difficult to prove.

Among the standards required for a permit, the Council proposed mandating off-street parking and limiting guest rooms and number of guests in each home. The number of permits to be issued for each Council district would be capped at an unspecified level.

Setting that level will be contentious, as will determining which applicants get the go-ahead. The best way of doing that would be to raise the bar of qualifications.

Preference must be given to homeowners who are residents of the home as well.

If vacation rentals are to help homeowners afford to live in costly Hawaii, then those people should stand at the head of the line. City policy is meant to benefit them, not offshore investors buying up parcels to make easy money.

As Hawaii’s tourist industry has matured, and as the internet and social media have enhanced visitor access to information about unconventional accommodations, a niche for vacation rentals in residential areas has opened and expanded rapidly.

The city attempted to clamp down on it in 1989 by enacting a moratorium on additional conditional use permits that were being issued for these units in residential areas. In a residential zone, rentals are supposed to be offered for terms of 30 days or longer.

The birth of online rental brokerages such as VRBO, HomeAway and Airbnb enabled the short-term rental market to flourish, regardless of the moratorium, because the city’s laws made enforcement more difficult.

Most of the illegal lodgings being booked on Oahu are TVUs, which, unlike B&Bs, have no resident on premises but are rather vacant homes offered for short-term rental.

Hefty fines and practical, aggressive enforcement strategies could provide the needed deterrence to discourage those who would become a vacation-rental “host” in pursuit of profits at the expense of the neighborhood.

Homeowners who would like extra rental income but don’t want to risk tens of thousands of dollars in fines would have a reason to consider a long-term tenant instead, filling a tremendous need in that marketplace.

The lure of vacation-rental income is so great that the city must offset that and curb the scofflaws. Otherwise, the exodus of landlords from the long-term rental market will accelerate, worsening the island’s already shrinking inventory of affordable housing.

Now, as the city comes close to proposing new rules governing all this, and before the Honolulu City Council approves them, it would be wise to keep such arguments in mind.