HONOLULU, Hawaii (HawaiiNewsNow) - The city’s new law regulating the vacation rental industry went into effect Thursday and is already facing two legal challenges.
The Hawaii Vacation Rental Owners Association filed the first lawsuit, saying the new law is unconstitutional and violates laws governing zoning and administrative procedures.
“The City Council rushed through a flawed, unfair and illegal bill, and in its haste to crack down, the (Department of Planning and Permitting) has released illegal rules which violate the rights of the owners of legal rentals,” said attorney Greg Kugle.
A second lawsuit by the owners at the Waikiki Banyan condos will also seek a temporary injunction to halt the city from enforcing the new law.
“Basically, the whole financial structure of the building is under the assumption that they they could continue to due the short-term vacation rental,” said Christian Porter, attorney for the condo owners who plan to sue in the next several days.
“At least 87% of the folks have been operating as a hotel type condo, they’ve had a front desk, they’ve paid the taxes.”
But the city said the law is working and that it has already reduced the number of illegal vacation rentals here.
“A search of the Internet earlier this week showed a drop in the number of ads from 5,000 to 4,150, or a 17.7% decline, since mid-July,” the city said, in a news release Thursday.
A federal judge has set a status conference for the first lawsuit Friday morning.