Vacation rental proposal draws mixed reviews
Mayor Kirk Caldwell’s vacation rental proposal to allow for more legal bed-and- breakfast establishments and transient vacation units across Oahu — under stricter guidelines — got a warmer reception from Honolulu City Council members last week than when it was announced last month.
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Mayor Kirk Caldwell’s
vacation rental proposal to allow for more legal bed-and- breakfast establishments and transient vacation units across Oahu — under stricter guidelines — got a warmer reception from Honolulu City Council members last week than when it was announced last month.
After a presentation of the draft plan was made to the Council Zoning Committee on Thursday, committee members applauded the Department of Planning and Permitting for its initial steps toward a short-term rental policy. A proposed draft bill establishing a new policy is now before the city Planning Commission. After that panel makes its recommendations by the end of summer, the Council will
begin deliberations on it.
Zoning Chairwoman Kymberly Pine, after Caldwell made the strategy public last month, said she would not support a vacation rental policy that did not include a strict enforcement mechanism.
On Thursday, Pine said she’s ready to support a policy but also stressed that she is proposing to add more inspector positions in next year’s DPP budget to ensure stepped-up enforcement capability.
“I really feel that we must make a decision this year,” Pine said. “We have to just find a way to stop the madness and out-of-control parts of this situation and see how we can make this work for Hawaii,” she said. “I’m confident that the members of this committee will have the resolve to be able to push through some of those issues and come up with a solution.”
Councilman Trevor Ozawa praised DPP Acting Director Kathy Sokugawa for considering different aspects of the intricate issue. A B&B enforcement bill would make it tougher for “monster” houses to operate as illegal vacation rentals since only individuals with homeowner exemptions would be eligible for either of the permits, an effort to discourage outside investors, he said.
“A lot of these are owned by corporations or investment (groups) … that are just picking them as investment opportunities,” Ozawa said. At the same time, the draft has elements “that allow people that do find value in this type of renting of a room in their house to be able to do so more respectfully in the residential neighborhoods.”
He added, “Nobody’s going to be happy either way — just like with taxis, Lyft and Uber, just like affordable-housing policy, TOD and rail.”
Sokugawa said the draft proposal has three key components:
>> Establishing new “Bed and Breakfast Home” and “Transient Vacation Unit” property tax classifications.
>> Creating a new permitting system for new B&Bs and TVUs.
>> Adopting a new law making it illegal to advertise a B&B or TVU without listing a valid permit number.
Under the current draft, there would be no limit on the number of B&B permits issued, but only a limited amount of TVU permits issued, and only outside of neighborhoods zoned for single-family residential homes. The proposal calls for the new restrictions to not apply to homeowners who rent out their units for fewer than 30 days total each year.
Research by DPP shows 8,000-10,000 short-term rentals available on Oahu. Outside of areas zoned for resort use, where short-term rentals are allowed, there are only 816 short-term rental operations that have permits. The city stopped issuing permits for both in 1989-90, except in hotel-resort zones.
Two people who support vacation rentals and two people who oppose them testified Thursday — all raising objections.
Pokai Bay resident Dan Carpenter said that using the information he saw in DPP’s draft proposal, he calculated the economics of continuing to rent his house when he goes on vacation.
“When we went through and calculated the change in property tax amount plus the registration fees, it comes out more than what we get in rentals,” Carpenter said. “You need to accommodate the local people like us who are retired, on fixed income. Renting out our house when we’re gone is an important part of our survival tactic.”
He also questioned the fairness of imposing restrictions on short-term rentals that don’t apply to long-term arrangements. “We have had more horrible problems with long-term rentals next door than we ever did with vacation rentals next door.”
Kailua resident Vern Hinsvark said the city needs to focus on enforcement first before undertaking any proposal to legalize more vacation rentals. “We had two people right here in this room right now saying they’re breaking the law and we do not enforce it,” Hinsvark said. “Here we are just patting them on the back and saying, ‘That’s OK.’”
Hinsvark said he rejects the argument that the demand for short-term rentals warrants a need to supply more of them. “Well, we have a demand for housing, also, and the housing problem is not going to be improved by allowing … an unlimited amount of bed-and-breakfasts that take rental units off the market.”