City seeks first fines for illegal short-term rental properties

The city is attempting to collect its first fines for violations of a new law banning online advertising of illegal short-term rentals, which in just two months has more than doubled the city’s enforcement record from last year.

Ordinance 19-89, which took effect Aug. 1, makes it illegal to advertise a vacation rental that is not properly permitted or not inside a hotel-resort zone.

Since Aug. 1 the city already has issued 75 notices of violation to owners that were advertising unpermitted short-term rentals. During the same period, the city also has issued 13 violation notices for vacation rentals that were violating longtime occupancy laws. These numbers suggest that the new advertising law has added extra teeth to city short-term rental enforcement efforts. Last year the city issued only 33 notices of violations and 14 notices of order.

According to DPP policy, property owners who receive a notice of violation have seven days to correct the situation before DPP issues a notice of order, whereby fines begin accruing. The initial fine is $1,000, followed by subsequent daily fines of up to $10,000.

DPP hasn’t collected any fines related to the 75 notices of violations sent to property owners. However, last week it did send out notices of order potentially triggering fines for three property owners that had allegedly violated the short-term rental ban.

The city closed its case against Michael Miske Jr. on Tuesday after confirming that the property owner had corrected his ad on Sept. 25, the same day a notice of order was sent out for recurring short-term rental violations. However, Kathy Sokugawa, acting director of the city Department of Planning and Permitting, wrote Miske that any future violation would be considered recurring, thus triggering a higher fine of $10,000 a day. Miske did not return a call from the Honolulu Star- Advertiser.

The city also issued a notice of order to Christopher and Kim Stevens, who own a seven-bedroom, six-bath Hawaii Kai home at 274 Hakalau Place. They failed to correct an Aug. 26 notice of warning for allegedly violating short-term rental advertising rules. The order instructed the pair to pay a daily fine of $1,000 until the violation was collected.

The pair, who did not return calls from the Star- Advertiser, had sought to become intervening plaintiffs in an Aug. 1 lawsuit filed by the Kokua Coalition against the city Department of Planning and Permitting for its more stringent short-term rental policies.

The city also is pursuing fines from Alexander Wilson, owner of Oahu Photography Tours, who was issued a notice of violation Aug. 14 advising that he was advertising an unpermitted short-term rental for rental periods of less than 30 days. The city sent Wilson a Sept. 26 notice of order requiring him to “cease and desist immediately any bed and breakfast and/or transient vacation unit activity, and remove the rental solicitation listing from your website.”

The order also instructed Wilson to pay a daily fine of $1,000 until the violation was corrected. The city said Wilson’s notice of violation was corrected Tuesday. However, the notice of order, which imposed daily fines, remains open pending the resolution of Wilson’s fines, which as of the date of correction totaled $4,000, the city said.

Wilson said Thursday that he immediately corrected the violation. However, he said the city did not promptly return his calls to clear his case.

“As soon as I got the letter, I let the person who was staying finish out their six days and canceled everyone else,” said Wilson, who began using a Waikiki Townhouse unit as a short-term rental last year to make ends meet. “They also had to see that my rental ad says it’s a 30-day rental.”

Wilson said Oahu’s short-term rental crackdown has hurt his short-term rental business and his tour business.

“There isn’t as much demand for 30-day short-term rentals. I’ve also seen fewer tours being booked because not as many visitors are coming,” he said. “Every single person on my tour has mentioned that it’s ridiculous. They say that they won’t come back if they have to stay in a hotel that charges $400 a night and doesn’t even have a kitchen where they can cook.”

Wilson said he hopes city lawmakers will reevaluate short-term rental policies once they realize how much the crackdown is straining the tourist economy. However, a major complaint by opponents of unpermitted short-term rentals is that they strain affordable housing and reduce quality of life for local residents.