Lawmakers are considering bills to crack down on thousands of illegal vacation rentals that operate in Hawaii.
Two bills were passed by the full House on Tuesday. House Bill 825 would crack down on the regulatory requirements, while House Bill 792 would address property crime associated with tourist areas.
Another proposed measure, Senate Bill 409, has already crossed over to the House, and would allow zoning of single-family vacation rental units to phase out over time.
A residential area in Manoa. Officials say there illegal vacation rentals throughout the islands.
Cory Lum/Civil Beat
Meanwhile, the Honolulu City Council is considering a bill that would amend the Land Use Ordinance to require owners or agents of vacation rentals to list the property’s address and permit number on advertisements. The information would help the city’s Department of Planning and Permitting more easily identify illegal vacation rentals.
The department is also looking at increasing fines for illegally operating a vacation rental from $1,000 to a maximum of $10,000 a day.
Some people complain that illegal vacation rentals have caused housing prices to soar and have torn apart communities where residents know all their neighbors. Although lawmakers have made multiple attempts to halt the spread of short-term rentals in recent decades, they estimate that the numbers have proliferated in recent years.
Honolulu’s zoning laws prohibit property owners in residential neighborhoods from renting out homes for less than 30 days.
Of approximately 88,000 visitor accommodations that were advertised in 2014, one-fourth were vacation rentals advertised for short-term use, according to a recent report by the Hawaii Tourism Authority. Hawaii could be missing out on millions of dollars in tax revenue from a portion of those units that aren’t legal.
Honolulu’s zoning laws prohibit property owners in residential neighborhoods from renting out homes for less than 30 days. The only way that property owners can legally rent out residentially zoned homes is by obtaining a Nonconforming Use Certificate. Only after homeowners have the permit can they rent out properties for 29 days or less.
The state considers “transient vacation rental” to be any unit that is rented for 180 days or less.
HB 825 would establish stricter licensing and enforcement requirements for vacation rental units. The bill would give the Department of Commerce and Consumer Affairs the authority to enforce licensing requirements and regulations for transient vacation rentals. HB 825 clarifies that homeowners cannot advertise a vacation rental unit without holding valid permits.
If vacation rental owners fail to comply with any of the requirements specified in HB 825, they could face a $10,000 fine for each violation.
HB 825 was opposed by several vacation rental owners, who said the regulations were too strict and would fail to address the problem of illegal vacation rentals. Most of the property owners who testified in opposition were especially worried about a provision in the bill that would require them to put all payments from customers into a trust account. The provision is supposed to protect consumers if they needed a refund.
“Why should my money be put in a trust account?” Linda Mitchell said in written testimony in opposition to HB 825. “No one has complained about my services or the charges for them.”
SB 409 would allow zoning of single-family vacation rental units to phase out over a “reasonable” period of time. Supporters of the bill say that non-conforming vacation rental owners can bypass regulatory controls by claiming that their use is more residential the commercial.
SB 409 would give counties the ability to distinguish single-family residential use from single-family vacation rental use. Currently, counties don’t have the zoning authority to differentiate between the two uses. The proposed bill has crossed over to the House.
Some Hawaii residents are unhappy with how the short-term rentals have changed neighborhoods. Vacation rentals have also been linked increased property crime, because criminals frequently target tourists.
And visitors are less likely to testify in a criminal case because they don’t live in Hawaii, but another proposed bill could change that. HB 792 would allow non-resident victims of property crime to testify over a live two-way video connector.
“This legislation will ensure that those visitors, who are victims of property crimes, will have a sense of relief in knowing that distance will no longer equate to being re-victimized if they are unable to return to Hawai‘i to testify,” Hawaii County Police Chief Harry Kubojiri said in support of HB 792.
Civil Beat’s Sophie Cocke contributed to this report.
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