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Enforcement of city Ordinance 22-7, a controversial bill to regulate short-term rentals, is supposed to start today.
However, the city already has hit some snags. The biggest is an Oct. 13 court order from U.S. District Judge Derrick Watson ordering the city to stop its planned enforcement of a 90-day minimum stay for Oahu short-term rentals that are outside of resort districts.
Honolulu Mayor Rick Blangiardi said the city plans to fight the court challenge. Increasing short-term rental minimums to 90 days from 30 days was put into the law to dissuade scofflaws and make it easier for city personnel to catch short-term rental violators after decades of struggle.
Blangiardi, who spoke about the city’s short-term rental plans Thursday at a news conference, said while the city cannot enforce the minimum-stay provision, it is ready to begin enforcing its new rules on rentals of less than 30 days and all other provisions of Ordinance 22-7 (Bill 41), which sets fines at up to $10,000 a day.
While the city says it’s ready to begin enforcement, its future plans hinge on the registration process, which still has many elements to clarify. For starters, short-term rental owners in resort districts who want to rent their properties for less than 30 days are nervous that they were not given the opportunity to register active properties by Sunday, the start date of the new law.
On Friday the Blangiardi administration told the Honolulu Star-Advertiser that it “expects the registration portal to be up and operational by Monday.” But the administration declined to provide a start time for the registration website.
The eleventh-hour rollout is sparking fears among short-term rental owners that the city site could crash. After all, most remember when an avalanche of new pandemic-related unemployment claims gummed up the state’s online system. They also fear that approval lag times could cause them to run afoul of the new law.
Dawn Borjesson, chair of the Friends of Kuilima, a North Shore resort neighborhood where the city allows rentals of less than 30 days, said Sunday that on Friday members asked the city for a 45-day grace period because registration is down to the wire and more clarification is needed.
“The minute that we cannot follow specific guidance that they have indicated is allowable and meets the definition of the law, they have introduced subjective enforcement on their side.
“We want clarity,” she said. “We don’t want them to be able to cherry-pick who they are going to go after.”
She said Sunday that city officials had not yet responded to her request for a grace period, but as late as Friday were still trying to clarify registration requirements.
Borjesson said short-term rental owners had been working with the city on a general affidavit process that would have lessened the burden of uploading so many documents to the registration site. However, she said on Friday the city reversed course and said applicants must upload all documents required with the registration under Ordinance 22-7, including the binder.
“Thousands of owners will be uploading thousands of documents when registration opens,” she said. “We are all worried about the system crashing.”
Paul Nachtigall, an Oahu- based short-term rental owner who bought resort rental properties as part of his family’s retirement plan, said he’s still navigating through the ordinance’s complex rules and restrictions, as well as its discrepancies.
Nachtigall said language in Ordinance 22-7 requires owners to submit an Oahu Transient Accommodations Tax form, which doesn’t exist.
The Blangiardi administration has TAT owners who are registered with the state do not need to register with the city in order to pay their OTAT. However, that opinion is not in the law.
“It’s very stressful for the owners,” Nachtigall said. “We want to follow the law.”
Borjesson said owners also might need guidance concerning which title property records and commercial insurance policies satisfy the city’s registration requirements.
The Blangiardi administration told the Star-Advertiser on Friday that “any title report will suffice if it is updated or issued within 30 days prior to the date of registration and shows property ownership.”
The administration said the insurance issue “needs to be resolved on a case-by-case basis, depending on the terms of the umbrella policy at issue. However, supplemental umbrella coverage is generally acceptable if it covers the same liabilities addressed by the required primary coverage.”
Though the city undoubtedly will have more questions to answer on the registration side, the Blangiardi administration has pledged to begin aggressively enforcing the new law today.
The administration told the Star-Advertiser on Friday that seven full-time city Department of Planning and Permitting staff have been dedicated to an Short Term Vacation Rental Enforcement Unit. The administration said they will work city hours, 7:45 a.m. to 4:30 p.m., starting Monday.
The city also has contracted with LTAS Technologies Inc. to assist with identifying illegal STRs and delivering the registration portal. The annual base cost for these services is $73,000.
The city has set up a telephone hotline (808-768-7887) so that DPP can field complaints about illegal short-term rentals. That’s in addition to the city’s online complaint portal, which still wasn’t working as late as Thursday.
Hector Trapani told the Star-Advertiser that the DPP complaint portal has been malfunctioning on and off for over a year — sometimes returning a message of “undefined” when the form is ready to be sent.
Trapani opined that the broken complaint portal is an enforcement problem, as the city typically does not have the manpower to identify and pursue violators without a complaint. Blangiardi told the Star- Advertiser on Thursday that he had been unaware that the portal was broken and that the city would fix it.
Honolulu City Council member Andria Tupola, who represents District 1, which runs from Ewa Beach to Kaena Point, and cast the lone dissenting vote when Bill 41 passed, described Ordinance 22-7’s start as “rough” and “sloppy.”
“I don’t feel like it’s a concerted effort from the Council, the department, the administration,” she said. “It’s like a hobbling soldier that’s just dragging on the ground now.”
Tupola said City Council members should have fully enforced Bill 89, Ordinance 19-8, rather than doubling down on a what she views as a problematic law. Tupola said Ordinance 22-7 is likely unenforceable given the preliminary injunction, as well as the personnel shortages at DPP.
“Who is going to go around and enforce the registration? They don’t even know who is supposed to be registered,” Tupola said. “You cannot stand up there and be like, ‘I’m going to drop the hammer’ and then, ‘Oh, by the way, the hammer’s broken, and it doesn’t hurt and it’s actually a paddle.’”
REGISTRATION ASSISTANCE
>> The Blangiardi administration said an online chat option will not be available on the registration website, but those who need assistance may call 808-768-7887. Leave a message and someone will get back to you as soon as possible, they said.
>> They ask the public to review the STR FAQs on the website prior to calling.
Source: Blangiardi administration
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