Short-Term Rental Regulation Advances at Honolulu Hale

Apr 18, 2019

If regulations pass the Honolulu City Council, neighborhoods across Oahu could see vastly different rules regarding short term rentals.
Credit Wikimedia Commons

Local lawmakers are making another attempt to regulate short-term rentals. On Wednesday, the Honolulu City Council held a public hearing on the latest proposals to rein in Oahu’s vacation accommodations, like those rented on Airbnb, HomeAway, and VRBO.

Dozens of residents sat in line for hours at Honolulu Hale to give lawmakers their thoughts on two bills that would represent sweeping changes for how Oahu’s vacation rental industry is regulated.

State and county lawmakers have struggled for years to find a solution that works for everyone. Honolulu Mayor Kirk Caldwell acknowledged that no one solution will please everyone when the city council took up the issue in March.      

With that in mind, Mayor Caldwell and the Department of Permitting and Planning have crafted what the mayor calls “a compromise bill.” That bill, labeled Bill 89, was developed after months of public feedback and input from the independent Honolulu Planning Commission.

Under that proposal, whole home short term rentals would only be allowed in resort areas like Waikiki and Ko Olina. Hosted rentals, where the owners live on site, would be allowed in some areas, but many residential neighborhoods would be off limits.

That provision has generated opposition from many short-term rental operators and platforms like Expedia Group, which owns VRBO and HomeAway. Philip Minardi, the Director of Policy Communications for Expedia Group, says Expedia is open to limits on the rentals, but not an outright ban.

Minardi cites municipalities like Seattle and San Antonio that have implemented caps on short term rentals by area and individual owner, rather than outright bans. He argues that those type of restrictions can reduce the negative impacts while still allowing residents to benefit from short-term rentals, which annually generate 34,000 jobs and $5 billion in economic activity statewide according to an Expedia estimate.

In an attempt to mitgate some of the issues associated with short term rentals, Expedia has created a website called Stay Neighborly.  Neighbors can report problems like excesive noise and a special unit of customer service representatives will attempt to address the issue without involving police or zoning enforcement officials.

Not everyone thinks that profit potential from short term rentals is a positive for the community. Victor Gemiani, a lawyer with the Hawaii Appleseed Center for Law and Economic Justice, highlighted where those profits are going.

"27% of short term rentals are now posted by people who have more than 20 units each. The bottom line is, this an enormous business."

The Appleseed Center and many other vacation rental hawks support a more hardline bill, number 85, which was also heard on Wednesday. That measure would ban all short-term rentals outside of resort areas and allow residents to sue their neighbors who violate the law.

Following Wednesday’s public testimony, councilmembers now have a chance to make revisions on both Bill 85 and 89. Each will have one more hearing before the council takes a final vote.

A separate measure currently under consideration at the state capitol would require operations like Airbnb and Expedia to collect General Excise and Transient Accommodation Taxes.