Reaching a stalemate in the charged debate over how to manage the proliferation of short-term vacation rentals on Oahu, the Honolulu City Council on Wednesday deferred voting on two measures to regulate the industry.

The decision to not decide came after a marathon meeting in which more than 100 people testified for and against the proposed amendments to the county’s land-use ordinance.

Amid a flurry of proposed changes and complaints about confusion over the current drafts, Councilwoman Kymberly Pine moved to send the measures back to the council’s zoning and housing committee for further work.

Demonstrators holding sigs in opposition to City Council bills 89 and 85 rally in front of Honolulu Hale before city council meeting.

Dozens of protesters in front of Honolulu Hale demonstrated against bills to regulate short-term vacation rentals Wednesday.

Cory Lum/Civil Beat

The decision followed hours of intense testimony for and against the measures.

Among those supporting a crackdown on the illegal rentals were hotel workers and current and former state officials, including former Gov. Neil Abercrombie and Sens. Laura Thielen and Kurt Fevella, who said the rentals are exacerbating the island’s housing shortage and disrupting neighborhoods.

Opponents included dozens of people who said their livelihoods depended on short-term rentals, either because they rented out the properties or worked in ancillary businesses, like cleaning services. A number of real estate executives also testified against the bills.

The deferral represents at least a temporary reprieve for owners of vacation rentals, who were facing two options that would have cut back dramatically on the practice of renting out whole homes to tourists.

Jill Lawrence, a property manager who represents North Shore property owners, said she was glad that the council has more time to work on the bills and get public input.

“It means they’re not going to pass something more draconian and drastic,” said Lawrence. “They’re listening.”

Honolulu City Council member Ron Menor.

City Councilman Ron Menor, left, submitted both the measures.

Cory Lum/Civil Beat

But Kekoa McClellan, a Hawaii spokesman for the American Hotel and Lodging Association, said the council had missed an opportunity to fix a broken system.

“The council has before them solid legislation that will ensure we don’t lose any more homes to illegal short term rentals,” McClellan said in a statement after the council’s vote. “This is an unfortunate setback.”

“Assuming these measures make it through committee and are back on the full council agenda next month, as many as 100 or more housing units in Honolulu will be lost to illegal short term rentals,” he said. “The longer we wait, the more of Hawaii we lose to these whole home operators.”

The tourism industry has changed dramatically in Hawaii and elsewhere in recent years, as travelers increasingly opt to rent properties listed on platforms like Airbnb and Homeaway instead of hotel rooms. Hawaii’s inventory of hotel rooms has shown little growth, but the number of tourists has boomed to 10 million annually, growth that experts attribute in large part to the explosion of people converting residential properties into tourist accommodations.

Even hoteliers agree such alternative accommodations need to be part of the mix for visitors. And some homeowners say the ability to rent part of their properties to tourists helps them make ends meet.

“You need to pass one or both bills today and enforce them. The longer you wait to do something, the more difficult it’s going to be.” — Sen. Laura Thielen

Still, amidst this revolutionary shift, Honolulu’s land-use ordinance has remained largely unchanged. Under the ordinance, short-term rentals are generally allowed only in resort zones, mainly Waikiki and Ko Olina, with an exception carved out for about 800 units. Meanwhile, the City Council estimates there are 8,000 to 10,000 properties being rented out short term at any given time. Many if not most are illegal.

Although all sides of the debate seem to agree the current law is flawed, the issue has been how to fix it. The City Council spent months hashing out two alternative proposals, but neither legalized an expansion of whole-home vacation rentals.

One measure, Bill 85, focused mainly on making it easier to enforce the current laws. The other, Bill 89, imposed tougher penalties for violators, but allowed property owners to use up to two bedrooms in their homes as short-term rentals. Both were submitted by Councilman Ron Menor.

Much of the testimony Wednesday was in opposition to both measures. Opponents cited the revenue the vacation rentals generate for residents, the need for alternative accommodations and the jobs created for people like housekeepers and landscapers.

“Some business owners were on the verge of tears hearing the news.” — Jenny Kono, testifying that most Kailua businesses oppose a crackdown on short-term vacation rentals

Angela Tseng testified about the benefits her properties in downtown Honolulu generate for neighborhood businesses.

“As more farmers markets appeared all over Honolulu, Chinatown’s fruit and vegetable vendors began losing business, as local patrons now shop closer to home,” Tseng said. “ Luckily, the drop in local buyers is backfilled by the rise in visitor clients.”

Jenny Kono shared a similar story about Kailua. Although the Windward Coast community often is viewed as a prime example of vacation rentals run amok, she said the vast majority of business owners there support short-term rentals. Kono said she was so concerned she walked around the community and drew up a petition opposing the pending bills.

Senator Kurt Fevella testifies in support of City Council Bills 89 85.

Sen. Kurt Fevella urged the City Council to support the bills, saying, ““We’re here because we want our neighborhoods back.”

Cory Lum/Civil Beat

“Some business owners were on the verge of tears hearing the news,” Kono said.

Sen. Laura Thielen, who represents the area, had a different take. She urged the council to act now and not wait until even more property owners convert homes into short-term rentals for tourists.

“You need to pass one or both bills today and enforce them,” Thielen said. “The longer you wait to do something, the more difficult it’s going to be.”

Sen. Kurt Fevella said it wasn’t about hurting small businesses but about regaining housing that has been lost to short-term rentals.

“I’m basically here to ask you guys to support these bills to take back the community,” he said. “We’re here because we want our neighborhoods back.”

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