Maui voters fed up with people skirting county laws on short-term vacation rentals soon can vote to give government officials a hefty weapon: a 20-fold increase in the amount the county can fine violators.

A measure on Maui ballots in November would increase from the current $1,000 to up to $20,000 the amount a person could be fined for operating a short-term rental without a permit.

And that’s just for starters. The measure would also impose a $10,000 fine for each day the illegal rental persists. The measure also would apply to Lanai and Molokai.

Mike White, the chair of the Maui County Council, introduced the measure to deal with what he said was a proliferation of unlicensed short-term rentals on the Valley Isle.

“The process to get a license is all defined,” said White. “It should be used by anyone wanting to get into this business.”

The growing popularity of short-term vacation rentals on Maui has county officials concerned about unlicensed properties. Airbnb

Voters will get a direct say in the matter because the Maui County Charter now generally limits fines to $1,000, and amending the charter requires approval of the voters.

Specifically, the ballot asks voters, “Shall the Charter be amended, effective January 2, 2019, to increase the penalty for the operation of a transient accommodation without a necessary permit from the current $1,000 amount to a civil fine of up to $20,000 plus $10,000 per day for each day the unlawful operation persists?”

Unlike other policy proposals, Airbnb has stayed out of the fray on the proposed charter amendment.

Will Enforcement Be Effective?

Tom Croly, a board member of the Maui Vacation Rental Association, said the organization doesn’t oppose the measure, but he questions whether it will do much to prevent vacation rentals without permits.

“This is a measure that it destined to be ineffective,” he said. The issue is that Maui can already fine people $1,000 a day, Croly said, but doesn’t enforce the ordinance.

“They can make the fine a million dollars, and it won’t matter,” he said.

The proposal comes as Hawaii counties are struggling to deal with an explosion of unlicensed short-term vacation rentals.

On Oahu, for instance, there were approximately 8,500 short-term rentals being advertised online in August, according to Airdna, a site that provides market data for landlords wanting to rent out their properties. The vast majority were outside of the resort zones where the short-term rentals are allowed.

Public officials face a difficult task of balancing the need to enforce zoning laws with the growing popularity of online services like Airbnb and VRBO. Despite the obvious demand for such alternative accommodations, housing advocates say the rentals are taking away housing for residents and exacerbating already high rents.

Maui generally allows far more short-term rentals than Oahu, said White, who is also general manager of the Kaanapali Beach Hotel. The vacation rentals are generally OK in the resort areas of Kapalua, Kaanapali, Wailea and Makena, White said. That results in some 10,000 permitted short-term rentals, he said.

Saturday, August 11, 2018. Hawaii is headed to the polls Saturday to weigh in on a number of key primary election races, including governor and congress. (Civilbeat Photo Ronen Zilberman)
Maui County voters will decide whether to dramatically increase the fine for operating an unlicensed vacation rental to $20,000. Ronen Zilberman/Civil Beat

Outside of those areas, the county grants conditional use permits for both owner-occupied bed and breakfasts and vacation units rented out by absentee landlords. The problem, White said, is that many owners simply shrug off the permit requirements.

“This is a significant disadvantage to those who are licensed and pay all of their taxes,” he said.

“It’s not just a problem in Maui County. It’s a statewide problem; it’s a problem around the world.” — Michele McLean, planning director.

Maui has taken steps to crack down. Unlike Honolulu’s land-use ordinance, the law for Maui presumes a property advertised for rent is being rented, McLean said.

Although the online sites like Airbnb don’t list property addresses, McLean said that planning department staff often can find properties using photos from the online advertisements and the Google Earth mapping program.

In addition, she said Maui has also contracted with a firm that can use metadata from posted photos to sleuth out the location where the picture was taken.

But White said, even when the counties catch scofflaws, the $1,000 fine is often viewed merely as a cost of doing business and thus does little to discourage un-permitted rentals.

Croly, whose organization represents owners of vacation rentals, said it’s a myth that people make so much money renting properties that they can afford a $1,000 per day fine.

“There’s no one doing that,” he said.

Whether voters are displeased enough to support the big fine increase is far from clear. There haven’t been any polls to test the public’s sentiment, he said.

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