Officials step up citations for illegal rentals

The number of violation notices issued by the city to operators for allegedly advertising unpermitted short-term rentals has risen to 37 with more anticipated in the coming weeks.

The notices are part of a city ramp-up in enforcement of suspected violators of short-term rental laws since Ordinance 19-18 (Bill 89) took effect Aug. 1. The new law makes it illegal to advertise properties for short-term rentals of less than 30 days unless the property owner previously had obtained a nonconforming-use certificate. It also requires owners with certificates to display their registration numbers in their advertisements.

The city Department of Planning and Permitting said in a news release that seven of the notices have been corrected, “meaning the operator has either removed the ad, or changed it to comply with the ordinance.”

DPP said it is preparing to send at least one operator a notice of order, which carries fines. Thus far, no fines have been levied on property owners.

According to the new law, short-term rental operators have seven days to resolve a suspected violation. Owners who don’t make timely corrections could face an initial fine of $1,000 and daily fines of $1,000 to $10,000.

The city said the new ordinance and enforcement efforts “appear to be having an impact on the number of advertisements on hosting platforms.” Since Aug. 1, the city said short-term rental advertisements across several platforms dropped last week to 3,400 from about 5,000.

State Rep. Tom Brower (D, Waikiki-Ala Moana), chairman of the Legislature’s housing committee, told the Waikiki Neighborhood Board at its monthly meeting Tuesday that he thinks “the overwhelming majority of residents would be happy with what the city did on the vacation rental bill.”

“It almost seems like when your government does the right thing or tackles a big issue it almost seems unusual, but by doing this they restored faith in government,” Brower said.

Prior to the law’s passage, the city had long heard complaints about how the spread of vacation rentals was cutting into affordable housing, straining infrastructure and natural resources and threatening safety. Perhaps the most widespread complaint was that the sprawl of illegal short-term rentals had impinged on the social structure of communities.

“This was a grassroots effort for over 15 years by regular folk who wanted their neighborhoods back,” said Kathleen Pahinui, a North Shore neighborhood advocate. “We want to see the city give this law a chance and not cave into specialty interests.”

But not everybody is a fan of the city’s month-old, short-term rental law, which already has drawn widespread legal attention, three lawsuits, and warnings from investors and economists.

Separate lawsuits have been filed by the Association of Apartment Owners of Waikiki Lanais, the Kokua Coalition and the AOAO of the Waikiki Banyan. There’s also been broad pushback from some residential owners in resort districts like Waikiki and Kuilima, who say they were blindsided by the new law.

Short-term rental proponents like Ainslie Ports, AOAO Waikiki Lanais board member, said the new city law puts short-term rental owners in danger of losing money that keeps them afloat. She also fears it could dampen tourism, depress property values, harm businesses and reduce jobs.

The bill was brought up during the most recent earnings calls for Hawaiian Airlines, Alaska Airlines and Southwest Airlines. Andrew Watterson, executive vice president and chief revenue officer for Southwest, told the Honolulu Star-Advertiser during a recent interview that the airline is closely monitoring the effect of the new law.

“We fully understand the burden of overtourism, but we also don’t want hotels or accommodations to get out of whack with seats. So right now we’re taking a wait-and-see approach for what the implication is for lodging supply.”