Virtually any Oahu homeowner could legally rent out part of the home that they are living in as a bed-and-breakfast under a bill unveiled Thursday by Honolulu Mayor Kirk Caldwell.

At the same time, the proposal would limit the number of short-term vacation rentals offered by absentee owners — and impose tough penalties for violations.

The sweeping measure calls for dramatic changes in the way short-term vacation rentals are regulated on Oahu.

Mayor Kirk Caldwell, center, was joined by Council Member Ikaika Anderson for an announcement of a new bill to dramatically change the way the city regulates short-term vacation rentals. Stewart Yerton/Civil Beat

It includes a variety of amendments to the city zoning ordinance, property tax increases for people operating vacation rentals, and tough new penalties for people who fail to comply with the proposed law.

But perhaps the most striking element of the sweeping legislation is a provision that essentially allows any homeowner to use part of their home as a bed-and-breakfast.

The proposal is designed to address a thorny issue facing city and county planning and zoning departments statewide, particularly on Oahu, where a proliferation of short-term vacation rentals has created headaches for policymakers trying to balance a variety of competing interests.

Online rental platforms like Airbnb have made it extraordinarily easy for homeowners and real estate investors to rent out their properties to tourists.

This ad appeared on the Airbnb website advertising properties for rent in Waikiki. Screenshot

This has proved a popular option for visitors, entrepreneurs and homeowners trying to make extra money. But housing advocates have said it has taken away from the pool of available housing, especially rentals.

Residents of areas such as Kailua and the North Shore have also complained that the mushrooming short-term rentals have turned their quiet neighborhoods into resort zones.

The bill essentially makes it easier for residents who want to make extra money by renting out part of their homes. But it makes it harder for property owners who buy residences simply to rent those out on platforms like Airbnb.

The bill places no limit on the number of owner occupied bed-and-breakfasts, or B&Bs, allowed on Oahu. But the transient vacation units, or TVUs, listed by absentee owners would be limited to 4,000, said Kathy Sokugawa, director of the Honolulu Department of Planning and Permitting.

The measure also would steeply increase property taxes for those B&Bs and TVUs.

There would be an initial registration fee of $1,200 for a TVU and $800 for a B&B, with annual renewal fees of $500 for TVUs and $200 for B&Bs.

Caldwell noted that the bill also imposes tough pentalties for non-compliance, including fines of $25,000 per day for first offenses and $100,000 per day for third offenses.

Caldwell called the penalties “draconian fines to send a clear message to people that you’ve got to comply with the law.”

A spokeman for a local hotel industry group praised the bill.

“Mayor Kirk Caldwell and the Department of Planning and Permitting recognize the imact that illegal short-term rentals have on residential communities while appreciating there is a space for limited bed and breakfast type home sharing,” said Kekoa McClellan, Hawaii spokesman for the American Hotel and Lodging Association

Shane Peters, a local spokesman for Airbnb, declined to comment.

A national lodging technology organization was noncommittal.

“We look forward to collaborating with lawmakers to refine the regulations to protect the economy while addressing key community concerns,” said Matthew Kiessling, vice president of short-term rental policy at the Travel Technology Association.

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