Legalize below-radar housing

The city has within its reach a way to expand the inventory of affordable units suited to the singles and smaller households that are increasingly typical would-be tenants in Oahu’s rental market. It can do so without spending government funds on them and likely would improve city revenues by regulating what is now an underground industry.

The City Council proposal is to reform Honolulu’s underutilized "ohana unit" program, which for decades has allowed homeowners to build small units in tandem with their main house to accommodate family members.

Under Resolution 14-200, that provision would regulate "accessory dwelling units" (ADUs) that are rentable to anyone, related or not.

This is a promising development, because it would give homeowners a way to legitimately gain rental income from their property instead of trying to stay below the radar — sometimes resulting in unpermitted and substandard work on their home. And it would meet the housing needs of many in a city that needs to find ways to increase density in its urban core.

Both ohana units and ADUs are departures from the city’s Land Use Ordinance because they allow additional living units where the lot can’t be divided conventionally.

So the aim of regulation should be to keep these departures from degrading the community by overly taxing utilities or causing fire hazards due to substandard building practices.

Done well, it also should result in more rational property valuation, fattening city tax coffers.

The primary challenge city authorities must address is how to enforce new rules, given the laxity of enforcement to this point. That’s evident by a large number of permitted home additions that city regulators suspect may be illicit rentals.

The "suspicious" permits were uncovered by Questor Lau, an architect who examined the trend of adding on dens, workshops or other structures. More than 15,000 permits for add-ons were issued in Honolulu between 2005 and 2012 — only 1 percent for legal ohana units.

About 37 percent were "suspicious" because they included a separate entrance, bathroom or other feature that made it easily convertible to a secondary residence. These applicants had to sign an affidavit or restrictive covenant not to use them as separate dwellings.

But that doesn’t mean it’s not happening anyway. Enforcement is made difficult because inspections require the homeowner to grant access to the interior, which they can decline to do.

Less intrusive ways to check up on illicit rentals — a requirement to post the permit in an accessible spot, among other strategies — should be explored. Unhappy neighbors and tenants in illicit units can serve as effective enforcement deputies, too.

City Councilman Ron Menor, who sponsored the resolution, said people determined to cheat will do so regardless of regulation. But he makes a persuasive argument that most landlords would rather move aboveboard with their rentals and should be invited to do so without penalty.

The resolution allows ample time for public input, following review by the city Planning and Permitting director and hearings before the city Planning Commission, before the final ordinance is drafted.

Already there have been some critics who cite the poor enforcement of existing laws banning both short- and long-term rentals in such secondary units, leading to the proliferation of illegal vacation rentals as well. Requirements barring short-term rentals in accessory units and assessing stiff fines for those uncovered should help deter abuse.

The city still should contemplate a way for limited short-term vacation rentals in communities where they can be controlled and sustained. But that will require a separate set of standards, and a higher property tax rate as well, and is a debate for another day.

The focus here should be allowing more housing for renters and revenue for homeowners, some of whom are on a fixed income and want to remain in their homes.

The ADU proposal, on balance, seems to offer a win-win proposition for both of these groups, and for the city as a whole.