7 vacation rental bills before the Honolulu City Council

Seven bills that try to both regulate and legitimize Oahu’s short-term vacation rentals get their first airing before the Honolulu City Council on Wednesday.

Bill 89 is Mayor Kirk Caldwell’s omnibus proposal that would allow for permits to be issued for new bed-and-breakfast establishments and transient vacation unit — TVUs — while imposing tough laws on how they’re operated and stiffer fines when there are violations.

The city stopped issuing certificates for vacation rentals in 1989, and the city Department of Planning and Permitting estimates there are only 816 legal ones outside of resort zones but between 6,000-8,000 illegal ones on Oahu.

Past Councils have tried unsuccessfully since 1989 to come up with a plan to deal with vacation rentals, Council Zoning Chairwoman Kymberly Pine said. “We are not going to make the same mistake again,” she said Monday.

The vacation rental debate is a highly emotional one. Supporters say they offer homeowners a chance to make a few extra dollars while giving Hawaii’s visitors an alternative experience from the traditional hotels and resorts. Opponents say they disrupt neighborhoods; use up valuable sewer lines, street parking and other infrastructure; and take away potential housing units in the middle of a housing crunch.

The Honolulu Planning Commission gave its OK to the Caldwell version at its Oct. 31 meeting after rejecting previous drafts from the mayor.

DPP estimates the new proposal would cap the number of permitted B&Bs and TVUs at about 4,000 because it requires that the combined number of vacation rentals totals no more than 1 percent of all dwelling units in each of the island’s eight Development Plan areas. An earlier draft allowed for an unlimited number of B&Bs in single-family residential properties and a limited number of TVUs, but only in non-single-family residential areas.

The Caldwell plan also proposes stiffer penalties for violators: a $1,000 initial fine and then $1,000 for each additional day for a first offense, but then a $25,000 initial fine and $25,000 for each additional day for a first recurring violation, $50,000 for a third recurring violation and then $100,000 for a fourth recurring violation.

What’s more, legal B&B and TVU properties would be taxed at their own rates rather than residential rates, making it likely they would be assessed closer to the higher rates of resort properties.

In advertising, an operator must include the registration number for the TVU or B&B or face fines. Advertising used to promote an illegal TVU or B&B could be used as “prima facie” evidence of a violation.

Bills 86, 87 and 88 are variations of the Caldwell proposal offered by different Council members that use alternate approaches to permitting, violations, penalties and would, at least in one case, allow a “grandfathering” of existing B&Bs and TVUs.

Pine said she would like language to allow neighbors of those seeking a permit to have a say on the matter. Enforcement is a key component, and the Council already added 10 new positions in DPP to improve enforcement, she said.

Bill 85, introduced by Councilman Ron Menor, would allow a neighbor to bring a civil action against a violator of vacation rental rules.

Two related bills introduced by the administration are also on Wed­nes­day’s agenda.

Bill 90 would require the seller of a residential property to disclose whether a B&B or TVU can be operated out of the property, and if one operated out of there previously.

Bill 91 would make it a misdemeanor, punishable by a maximum of one year in jail, a fine of up to $2,000 or a maximum of 80 hours of community service, to lie to a DPP inspector or other city official during an investigation.