Hawaii News Registration for Oahu short-term rentals is progressing By Jack Truesdale firstname.lastname@example.org Nov. 5, 2022 Mahalo for supporting Honolulu Star-Advertiser. Enjoy this free story! Short-term rental owners in resort districts submitted 132 applications to register their properties with the Department of Planning and Permitting as of Thursday. Read more Mahalo for reading the Honolulu Star-Advertiser! You're reading a premium story. Read the full story with our Print & Digital Subscription. Subscribe Now Read this story for free: Watch an ad or complete a survey Log In Already a subscriber? Log in now to continue reading this story. Activate Digital Account Print subscriber but without online access? Activate your Digital Account now. The long-awaited city ordinance regulating short-term rentals took effect Oct. 24 to an anticlimax: Honolulu Hale’s registration website came a day after, few property owners in resort districts registered, and a federal court had already barred the city from penalizing people who rented out property for 30 to 89 days. But now, the program is getting underway. Short-term rental owners in resort districts submitted 132 applications to register their properties with the Department of Planning and Permitting as of Thursday. DPP reviewed 67 of them, approving 28, and finding 39 needed corrections. “The most common registration correction issue: Lack of a title report,” DPP spokesperson Curtis Lum wrote in an email. The numbers had not “changed much” by Friday afternoon, he said. Since Oct. 23, the day before enforcement of Ordinance 22-7 took effect, DPP’s Short-Term Rental Enforcement Branch has issued 45 Notices of Violation for illegal short-term rentals, but “we have not yet referred the NOVs for fines,” Lum said. By contrast, DPP issued 14 in the entire month of September and 15 in August. Meanwhile, 114 complaints about illegal short-term rentals have been submitted, he said. Despite “bad predictions in the media that it would crash,” the registration website “has been operating smoothly since we launched it,” Lum said. DPP has been receiving about 15 to 20 calls a day, with most callers asking whether they need to register. Generally, Oahu’s major resort districts encompass portions of Waikiki, Turtle Bay on the North Shore and Ko Olina resort by Kapolei. Some small pockets of resort districts are in Makaha Valley, Kahala, Laie and Ewa. Paul Nachtigall, 77, rents out a three-bedroom condominium at Kuilima Estates on the North Shore. The retired research professor of marine biology at the University of Hawaii at Manoa has owned his rental property for about five years and rents it out on Airbnb, where guests typically book it for a week. Some come from Japan, some from Europe and even some from Hawaii Kai. “A whole bunch more local people than you might think,” he said. Nachtigall managed to get conditional approval for his rental, but it didn’t come easy. “It took me about a week of fighting with it just to register,” he said regarding the website. It wasn’t exactly user- friendly, Nachtigall said. He struggled to upload all his documents, which the system sometimes rejected, and his “business” insurance initially did not count as “commercial” insurance, as the law required. The issue is now resolved. “Perhaps it’s just me, and I feel bad about it,” he said. But the immediacy of the law taking effect strikes Nachtigall as insensitive to law-abiding landlords. “It would be very nice if the city looked at us as taxpaying customers who are trying to do the right thing, and they don’t,” he said. “They look at us as potential criminals. It’s just the wrong approach.” Dawn Borjesson, the chair of Friends of Kuilima, an all-volunteer group that advocates for legal short-term rentals, reported hearing several complaints from people whose documentation the system rejected. “DPP, to give them credit, they’re trying really hard to help, but on the IT side of things it’s tricky to register. People have been having difficulties,” she said. “If their system times out on them when they step away to get more documents, it’s been locking them out.” Borjesson herself owns a short-term rental that she lists on Airbnb and Vrbo. She has not registered it yet. “It’s not that I’m not wanting to,” she said. “We just wanted to make sure we’ve got all the bugs worked out … to be able to use that as a training example” to help other owners register their properties, she said. Among the bugs: “The system shuts down on them, and they’re locked out,” she said. “Or they submit the incorrect document.” Since the 1980s, the city has limited home rentals of less than 30 days unless they are in resort districts. Certain owners in residential areas who had already been renting out their properties for less than 30 days were allowed to continue the practice after obtaining a “nonconforming use certificate.” Meanwhile, property owners outside of resort districts were free to rent out their home or a spare room for longer than 30 days. When the new short-term rentals law took effect in April, it prohibited those landlords from continuing the practice — that some had been relying on as income for decades — if their tenants stayed for less than 90 days. The nonconforming use certificate-holders were exempt. Under the law, the owners of short-term rentals would have to register, providing an initial $1,000 fee, a title report, tax licenses and other paperwork. Also, the city may fine violators up to $10,000 a day, plus any income from renting illegally. Aimed at protecting residential neighborhoods from the negative effects of short-term rentals, the ordinance states that the rentals are “inconsistent with the land uses that are intended for our residential zoned areas and increase the price of housing for Oahu’s resident population by removing housing stock from the for-sale and long-term rental markets.” On June 6, a group known as the Hawaii Legal Short-Term Rental Alliance sued the City and County of Honolulu and DPP in federal court to halt enforcement of the new law. The suit stated that should the law take effect “without the protection of preexisting lawful uses and property rights,” thousands of Oahu property owners and related businesses would be “irreparably harmed.” Additionally, even the city would “face damages in the tens, if not hundreds of millions of dollars.” The suit pointed out that short-term renters are not always vacationing visitors. Oftentimes military members in transition, doctors and nurses, contractors and residents in between homes stay in legal 30-day rentals, the suit said. In response, in mid- October U.S. District Court Judge Derrick Watson granted a preliminary injunction ordering the city not to enforce the provisions in the law that pertains to increasing the minimum allowable stay for Oahu rentals outside of resort districts to 90 days from 30 days. In his ruling, Watson cited Hawaii state law specifying that no future ordinance “shall prohibit the continued lawful use of any building or premises for any … purpose for which the building or premises is used at the time this section or the ordinance takes effect.” The judge wrote, “A plain reading of this provision bars a county from passing a law that discontinues any previously lawful use of any property.” Like the nonconforming use certificate-holders in the 1980s, owners legally renting out properties for 30 to 89 days would be protected. Any notion that the ordinance would eliminate them, Watson wrote, is invalid. The judge agreed with the plaintiffs that 30- to 89-day rentals were used by residents, military families, off-island families seeking medical care on Oahu, temporary health care and other workers, displaced families, and those who wish to live temporarily closer to school or work. “Whether a use is residential depends much more on what is being done at a residence than for how long,” he wrote. “Although the occupants of monthly rentals may shift more frequently than some neighbors and perhaps defendants would like, there is no doubt that these tenants are using the homes for residential purposes,” he wrote. Honolulu Mayor Rick Blangiardi has said the city intends to defend the ordinance and review how it might proceed against the injunction. Previous Story Hawaii auto sales lose traction, but 2023 outlook brighter Next Story Kokua Line: Can I keep Hawaii rebate sent to deceased spouse?