City to crack down on illegal vacation rentals

HONOLULU (HawaiiNewsNow) - They're all over the Internet: thousand of illegal vacation rentals. And now the city wants to crack down on them.

"This is fraud and they have to step up and pay," said Honolulu Mayor Kirk Caldwell.

"We need to make sure everyone is in compliance. As mayor I want that. I want the DPP to use the resources they have to bring people into compliance."

The Department of Planning and Permitting tries to enforce the law but owners of illegal rentals are often able to hide from inspection.

"We're looking at greater subpoena power, we're looking at introducing legislation both in the county and the state legislature to give us that authority," Caldwell said.

Caldwell says he's even spoken with Gov. David Ige about combining forces, like sharing the city's property tax records with the state tax department.

"If we combine those two incredible data resources, I think it's a way to crack down on those not paying the taxes," he said.

About 1,000 vacation rentals in Hawaii have proper permits. The rest -- at least 22,000 -- aren't registered and don't pay the hotel room tax or general excise tax.

That's costing the city and the state about $40 million a year.

Sharon Price of Kailua is one of the few vacation rental owners who does pay the taxes. She says she's in favor of operators carrying their fair share.

"I do feel they have to pay a fine. They should have to pay back year's licenses," she said.

But she also says other city proposals that would raise taxes for B&Bs and vacation rentals go to too far.

"The latest thing they're thinking of is raising our taxes beyond what any of us could afford and yes that would drive us out of business," Price said.