The demand for short-term rentals by way of online home-sharing platforms is soaring. A decade ago, Airbnb reported 1,400 guests stayed at its listings on New Year’s Eve. Today some 2 million guests in 81,000 cities stay in rooms, flats and full houses advertised on the company’s website every day.
In Honolulu, home-sharing has plenty of appeal for visitors, as Hawaii has the nation’s highest average daily hotel room rate, $280, and ranks third-highest for occupancy. Also, while nights at short-term rentals are typically less expensive, the vacation set-up can be far more lucrative for hosts than renting units to long-term tenants.
In other regards, though, the industry is increasingly unappealing. In Honolulu and in many other cities, platforms are being blamed for contributing to affordable housing shortages and a disintegration of residential neighborhood character as some operators sidestep local laws regulating such rentals.
Last week, Honolulu Hale put some 5,000 suspected illegal operators on notice that a long overdue crackdown will get underway Thursday, when the city starts enforcing a much-needed new law’s provision that bans advertising short-term rentals without a valid permit or non-conforming use certificate. Violators could face hefty daily fines of up to $10,000.
Better enforcement is the key. Due to decades of increasing demand for short-term rentals outmatching weak regulation and enforcement strategy, there are 770 permitted units and about 10 times as many illegal units. Tasked with the enforcement, the city’s Department of Planning and Permitting (DPP), will peruse online listings for dwellings to be rented or leased for less than 30 days. Those lacking certification will be flagged. Previously, DPP struggled with an often virtually impossible requirement that tied violation to catching an illegal operator red-handed.
While the new law may make enforcement easier, it clearly requires refinement. DPP received 390 complaints between Wednesday and Friday from people who said the notices were sent in error — an indication that the city needs to “more accurately focus our attention and not unduly stress residents,” said acting DPP Director Kathy Sokugawa. Agreed.
Two other important provisions in the new law take effect in October 2020. One requires platforms to file monthly client-related reports with DPP that are to be shared with the City Council. While the home-sharing businesses likely will balk, it’s encouraging that in recent legal cases, judges are challenging the notion that federal law gives web-based transactions a blanket go-ahead to disregard local laws.
Through the other provision, the city will issue new short-term rental permits for the first time in three decades. Ordinance 19-18 allows up to 1,699 more bed-and-breakfast operations, in which an owner stays on-site during the rental period; it does not allow any new permits for rentals known as transient vacation units.
In the interest of preserving established neighborhoods and the intent of zoning laws, that’s a wise move. DPP contends that unhosted “whole home” rentals have long generated the most complaints about noise, illegal parking and other matters at houses being used as de facto hotels.
Under the ad-focused portion of the new law soon to take effect, an illegal operator could be issued a notice of violation requiring the listing to be removed within seven days. Noncompliance could bring the property owner fines of $1,000-$10,000 for the initial offense, and $1,000-$10,000 for each subsequent day of noncompliance.
We’re encouraged that the city is poised to toughen up regulation. Success in thwarting further proliferation of illegal vacation rentals will hinge on accurate targeting, and strict follow-through measures.
