After more than 100 hundred people testified on the short-term vacation rental issue over a span of over five hours Wednesday, the Honolulu City Council decided to hold off on a final decision on the two bills before them and send them to a newly formed Council Zoning, Planning and Housing Committee.

Council members cited confusion over multiple drafts of Bill 89 (2018) that had been introduced just prior to Wednesday’s meeting.

The vote was 8-0 with Councilwoman Ann Kobayashi excused and not in the room for the vote.

Sending the bills back to committee means it will likely be months before the Council takes any final action on vacation rental regulation. The Council members can revise the bills and conduct at least one additional hearing in the committee.

Wednesday’s result was nothing new. City officials have wrestled with the vexing vacation rental issue since the city stopped issuing permits for them in 1989. The Department of Planning and Permitting estimates there are only 816 legal vacation units outside of resort zones but between 6,000 and 8,000 illegal units on Oahu.

Opponents of vacation rentals say they’ve ruined the complexion of residential neighborhoods, created noise and on-street parking problems, and made it more difficult for Oahu residents to find reasonably-priced places to stay. They also point out that most vacation rentals are illegal and that the city Department of Planning and Permitting has been ineffective in enforcing current regulations.

Supporters of vacation rentals believe they are aimed at a growing number of travelers who want an experience outside of the hotel-resort zones and offer local residents an opportunity to raise additional income that allows them to pay their mortgage and stay in Hawaii. They warn that limiting rentals could have widespread repercussions on the entire visitor industry and the state’s economy.

Supporters of vacation rentals applauded when the Council decided at about 7:30 p.m. that they would send the bills to the newly formed committee.

Councilwoman Kymberly Pine made the motion to send the vacation rental bills back to the committee and it was seconded by Councilman Joey Manahan.

The Zoning, Planning and Housing Committee will be a merging of the former Zoning and Housing Committee with the Planning Committee. It is being headed by Councilman Ron Menor under the newly reorganized leadership plan headed by newly elected Council Chairman Ikaika Anderson, who took the gavel Wednesday morning from interim Chairwoman Kobayashi.

One reason cited for delaying a decision was a lack of clarity on whether so-called 30-day rentals, where a party agrees to a 30-day lease but actually stays a shorter span, would or should be allowed.

The current law bars the owner of a residential property from renting to a party for less than 30 days unless specifically permitted by the city to do so.

The latest draft of Bill 89 (2018) allowed for up to 1,715 new permitted rentals across Oahu, but only if the owners live on the property, what is known as a hosted vacation rental.

The bill would have prohibited so-called whole-home rentals.

A hosted vacation rental, also referred to by the city as a bed and breakfast establishment, is one where the operator is also the owner of the property and lives on site during the stay. A whole-home vacation rental, also know as a transient vacation unit or TVU, is one where neither an operator nor owner is on site during the stay.

The 1,715 new vacation rentals allowed in Bill 89 (2018) represent 0.5% of the total number of residential units on the island.

Under the bill, the city would determine (likely by lottery) who would get permits and newly permitted short-term rentals could not be within 1,000 feet of another permitted short-term rental. Further, advertisements for a short-term rentals must include either the permit number or street address of the rental. Airbnb, VRBO, HomeAway and other hosting advertising platforms would need to disclose information about the host to DPP.

The second bill considered, Bill 85 (2019), included only the enforcement provisions of Bill 89, such as steep fines for violations of at least $25,000.

The slew of testifiers generally fell into several categories:

>> Hard-line opponents of vacation rentals, including the group Save Oahu’s Neighborhoods, who want enforcement to occur without opening the process up to new vacation rental permits. They urged Council members to support Bill 85.

“We are on the edge of an explosion of illegal rentals that are going to take place if we allow (Bill 89) to go forward,” former Gov. Neil Abercrombie said. “I plead with you.”

>> Proponents of short-term vacation rentals who urged Council members to hold off on passing either bill, arguing that they needed more information on how devastating a ban on whole-home rentals would be on the economy. The Oahu Short Term Vacation Rental Owners Alliance joined the hosting platform companies in seeking a delay.

East Honolulu resident Kristin Counter said not only would either bill prohibit whole-home rentals, it would “impose obscene fines” on those that would be left. She and other supporters of short-term rentals said a 2018 agreement between vacation home owners and the city allows short-term rentals but limits them to one renter per month. “This practice allows for whole-home rentals without turning our neighborhoods into the revolving doors that they have become.”

>> Supporters of Councilman Ron Menor’s version of Bill 89 (2019), which allows 1,715 new permits for hosted vacation rentals but cracks down on other rentals. They argued that hosted rentals would allow for better self-regulation by operators. Among those in this category were the Hawaii Lodging and Tourism Association, the UNITE HERE Local 5 union of hotel workers and the Hawai‘i Appleseed Center for Law and Economic Justice.

James Bersson, a representative of the Lanikai Association, said his home­owners initially only wanted to support Bill 85 but now are amenable to Bill 89. “We think that vacation rentals, as they currently are, are devastating to residential communities.” While his group still has some issues with Bill 89, ensuring stiffer enforcement provisions are in place is a larger priority.