City Council approves tough new regulations for vacation rental industry

HONOLULU, Hawaii (HawaiiNewsNow) - After months of debate, the Honolulu City Council on Monday night passed a pair of bills that are considered some of the toughest new regulations for Oahu’s vacation rental industry in decades.

In a vote that took place just after 6 p.m., members of the council approved Bill 89 unanimously. The new law will allow permitting for up to 1,715 owner-occupied bed-and-breakfast rentals.

Currently, there are 816 legal legal short-term rentals licensed on Oahu, but estimates put the number of illegal vacation rentals at up to 8,000.

The second measure, which passed by a 7-2 margin, settled on fines of $1,000 for the first offense and up to $10,000 for repeated violations and bans all vacation rentals outside of resort areas.

The measure also imposes higher fines for those discovered to be running illegal units, and provides new enforcement tools to the city’s Department of Planning and Permitting.

In testimony just prior to the vote, Mayor Kirk Caldwell told council members that while the bills weren’t perfect, they’ll begin to address the problem.

“I don’t think we should let the perfect get in the way of the good,” he said. “I think the current model of enforcement is not working. And I don’t think it will ever work, by the way.”

More than 150 people signed up to weigh in on the issue Monday, with testimony continuing into the evening.

State Sen. Gil Riviere, whose district covers Haleiwa, said the uncontrolled spread of vacation rentals has created “the wild, wild West" in community.

“(They’re) wreaking havoc on home prices, rental prices, housing availability,” he testified.

But those who run vacation rentals say they’re just trying to make ends meet.

“If short-term rentals are shut down, it will completely devastate many local families like us," said resident Ethan Powell. "Many people will be forced to sell their homes.”

Added resident Mary Kuehner: “This bill as written is not fair. If this bill passes as written, we will lose so many local businesses. We will so many families who vacation rented for decades.”

After the votes Monday, travel website Expedia said in a statement that measures would harm the Hawaii economy.

“The Council had a clear choice between fair and enforceable compromise and a dangerous and onerous ban," the company said. “Unfortunately, with tonight’s vote, Council puts in jeopardy nearly 7,000 local jobs, $336 million in local household income, and $77 million in state taxes.”

This story will be updated.

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