Vacation rental restraining order to be heard Aug. 15

A restraining order seeking to stop the city from enforcing its new vacation rental ordinance will be heard by U.S. District Judge Derrick Watson on Aug. 15.

The date was set Friday during a status conference between Watson and attorneys for the Kokua Coalition and the city.

Ordinance 19-18, which went into effect Thursday, makes it illegal to rent or advertise unpermitted short-term rentals that are outside a resort district. It also increases the fines for renting or advertising such units to a maximum of $10,000 a day from the previous $1,000 a day.

The Kokua Coalition, also known as the Hawaii Vacation Rental Owners Association, is made up of vacation rental operators including those who run so-called 30-day rentals, where only one tenant has exclusive use for a 30-day period, even if the tenant uses the unit for days or weeks short of 30 days.

The city says rentals of houses or apartments for less than 30 days are illegal unless they are in designated hotel-resort areas or are specifically approved under a nonconforming use certificate. The city stopped issuing NCUs in 1989 and there are currently only 808 in existence on Oahu.

But attorneys for the Kokua Coalition point out that their clients reached a settlement agreement with the city — and approval by a federal judge — that allows them to continue 30-day rental agreements.

Greg Kugle, a Kokua Coalition attorney, said the new ordinance appears to allow 30-day rentals, but that a city Department of Planning and Permitting website specifically disallows it. It states, “Advertising is a new violation, but actually staying in a home for less than 30 days is still a violation. The DPP will continue to monitor for occupancy violations.”

That’s a reversal from how DPP has been dealing with his clients, Kugle said.

City officials said they won’t comment on ongoing litigation.

The city has until Friday to file materials with the court under the timetable reached Friday. The Kokua Coalition has until Aug. 13 to reply.

Opponents of vacation rentals frown on 30-day rental agreements, calling them “fake rental agreements” being utilized by operators trying to exploit the loophole.