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Short-Term Rental Restrictions Approved by Planning Commission

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The Honolulu Planning Commission has unanimously approved a proposal from Mayor Kirk Caldwell to regulate short term rentals on Oahu. Last month a similar proposal was voted down by Planning Commission after overwhelming community opposition from both sides of the issue.

Credit Ryan Finnerty
Honolulu Mayor Kirk Caldwell appears before the Planning Commission. This was the second time the mayor appeared in person since his original bill was voted down.

To understand the proposed rules, we need to define a few terms. Short Term Rentals, or STR’s, are units rented out for less than 30 days. Permits for these have not been issued on the island of Oahu since the 1980’s.

A Bed and Breakfast, or B&B, refers to a home in which the owner rents out individual rooms within their full-time residence. These are also called hosted rentals.

A Temporary Vacation Unit, or TVU, is a house or condo that is rented out in its entirety for fewer than 30 days at a time. These are also referred to as unhosted rentals.

Large numbers of both supporters and opponents of short term rentals turned out to oppose Mayor Kirk Caldwell’s previous regulatory proposal. In response the mayor and the Honolulu Department of Planning and Permitting revised the bill. The proposal heard yesterday was revised according to feedback collected by the Planning Commission.

Credit Ryan Finnerty
This hearing had a smaller turnout than previous meetings which saw upwards of 100 residents appear in person.

Several major points were changed, covering quotas, taxes, and fines. All short term rentals would now be capped at 1% of the housing stock in every planning district. The previous version allowed an unlimited number of hosted B&B’s island wide.

Separate tax categories would be created for the hosted B&B’s and un-hosted TVU’s, with higher rates for unhosted. According to the DPP’s Chief Land Use Planner Katya Balassiano, this is meant to encourage hosted rentals rather than unhosted rentals. City officials stated that they receive fewer complaints regarding hosted rentals.

Violators of the new rules would be hit with serious fines; starting at $10,000 per day and quickly escalating. Mayor Kirk Caldwell appeared in person to make the case for those fines, which he called draconian. His hope is that the severe financial penalties will discourage rule breakers and prevent the need to hire more building inspectors for enforcement.

Residents present at the meeting were skeptical. During his remarks before the Planning Commission, Alex Ress of Kailua voiced his opinion that any new laws will be ineffective without enforcement provisions.

Credit Ryan Finnerty
A land use planner from the Department of Permitting and Planning presents the proposal to the Planning Commission. The commission's vote is non-binding, but their approval is viewed as a signal to the City Council.

Other residents expressed opposition to the regulations. Honolulu homeowner Julian Ritchey frequently travels to the mainland and rents out his home short term while it is empty. He argued that because he does reside in the home for part of the year that a long term rental would not be suitable. He also took issue with having to pay an elevated tax rate for the entire year, even if he only rents out his property for a few weeks.

The bill now moves to the Honolulu City Council where it will face an even more difficult road to passage. Mayor Kirk Caldwell expressed hope that a final version will be approved by the council for him to sign into law this summer.

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