Lee Cataluna: Waikiki Is Not Just For Tourists. People Actually Live There, Too
The latest attempt to rein in unregulated vacation rental units could put Waikiki residential units at risk.
By Lee Cataluna
November 10, 2021 · 5 min read
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You’re in line at the airport and the person in front of you is trying to convince the screeners that their carry-on bag is small enough to fit in the overhead compartment. You watch because it’s amusing in an “at least I’m not that desperate” way.
The overstuffed passenger is told to pay the money to check the bag. No, no, see? It all fits. Let me just squish this down and smoosh this together. There! It closes!
Same amount of stuff, just as heavy and still too big. Only now, the macadamia nut cookies and plush turtle doll are smashed almost to oblivion and the zipper is holding on for dear life.
Dealing with Hawaii’s tourism situation is feeling that way, like just rearranging things and squishing things around, rather than having fewer visitors in the islands.
On Wednesday, the Honolulu City Council will have the first reading of a bill aimed at cracking down on vacation rentals in residential neighborhoods, a situation that has affected the quality of life for many Oahu residents and has taken long-term rental units off the market.
For the most part, Bill 41 offers bold relief for communities where strangers come and go, park wherever they please and party late into the night; but like the overfull suitcase, part of the bill pushes vacation rentals elsewhere and would squish out affordable housing for residents.
On the positive side, the bill undoes a 2019 measure that would have allowed up to 1,700 new vacation rental permits in zoned neighborhoods, which really was a backward way to curtail the problem. It also increases the minimum booking from the current 30 days to at least 180 days.
Fines for illegal vacation rentals would increase from $10,000 per day per violation to $25,000 per day, and transient vacation units would be taxed at the same rate as hotels. Of course the vacation rental owners are mad. They wouldn’t get to make the kind of money that they were making in the good old days when tourism was insane before the pandemic.

The common argument is that homeowners should get to do whatever they want on their own property. But if that were the case, an auto body and paint shop could pop up in the house next door to their vacation rental and they wouldn’t be able to complain about it — though they probably would.
One part of the bill, though, is not about controlling the number of vacation rentals, but instead, opening up zones where they would now be allowed. The bill proposes opening resort districts like Waikiki, Ko Olina and the area near Turtle Bay Resort for residential apartments to be converted to vacation rentals.
Christine Otto-Zaa has been working to stem the proliferation of unpermitted “monster houses” in Honolulu for years now. She worries that allowing residential units in Waikiki to become vacation rentals will feed into the same problem of squeezing out local residents.
Otto-Zaa says there are over 19,000 units in Waikiki currently in residential use — from the funky walk-ups near the Ala Wai to the more glamorous buildings near Kapiolani Park — that could become vacation rentals. She worries about where those long-term renters will go.
“I know that a lot of folks feel that Waikiki is ruined anyway so let the tourists run amok there. But there are a lot of low-to-medium income residents living there, and not just the wealthy. To take away this housing for residents is extremely concerning when we have a housing crisis,” Otto-Zaa said.
“And then what happens when these 19,000 units are turned into vacation rentals, you force the density into the surrounding neighborhoods like Kaimuki, Kapahulu, Palolo and McCully, where we already have density and overcrowding issues with monster homes and vacation rentals. So what they are proposing in and around the resort districts will exacerbate the need for housing,” she added.
Council Chair Tommy Waters, who represents the Waikiki district, already has voiced concerns about this specific part of the bill.
“As the councilmember for that district and as council Chair, I am working to create housing for our local families, not take it away. There are many residents living in Diamond Head and the Waikiki Apartment Precinct whose quality of life would be negatively impacted by the de facto expansion of resorts in their neighborhoods, and I look forward to amending the bill to address this issue,” Waters said in an email.
It might be odd to think of trying to save Waikiki for local residents. In some ways, that area was given up for lost a long time ago. But working people live there. Families live there. Retirees live there. If given the choice between getting a monthly rent of, say, $1,900 from a long-term tenant or scooping up a nightly rate of $100 to $130 from visitors, landlords tend to favor the latter.
The bill is only in its first reading and many things can change, but it is an example of how hard it is to solve an issue by just moving things around and not actually reducing the massive bulk causing the problem.
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ContributeAbout the Author
Lee Cataluna is a columnist for Civil Beat. You can reach her by email at columnists@civilbeat.org. Opinions are the author’s own and do not necessarily reflect Civil Beat’s views.
Latest Comments (0)
For the most part, Bill 41 offers bold relief for communities where strangers come and go, park wherever they please and party late into the night; but like the overfull suitcase, part of the bill pushes vacation rentals elsewhere and would squish out affordable housing for residents.The narrative that vacation rentals are mega party homes is unrealistic and an old complaint we have heard all too much. It's an argument that the hotel industry likes to play up along with the vocal minority. Reality is locals have more parties than any visitors, who have limited, if any friends to invite over to party. Secondly, regular part-home rentals double the occupants of single family homes which is what causes parking issues. Add to that monster homes, which are permitted apartment buildings, into the mix and you have major parking issues and have over populated a neighborhood. Vacation rentals are definitely not to blame for these issues. Visitors come to explore the island, they play all day, use one car where a regular family tenant will add at least 2. Lastly, it is not up to private property owners to spearhead affordable housing, that is the state's responsibility.
wailani1961 · 4 years ago
The most predominate loophole used by illegal vacation rentals is the fabrication of fake 30-day leases by either the property owner or a property manager. Vacationers will request a less than 30-day rental and the owners/property managers quote them with a daily rate based on the number of day they stay. Once they make their reservations, the owners/property managers present the vacationers with a fake 30-day lease to be signed. Both parties fully understand the guests will not be utilizing the property for the full 30 days. This scam allows illegal vacation rental owners to have 12 vacation rental bookings per year (which is profitable). In the Kokua Coalition vs DPP, US District Court Judge Derrick Watson ruled this type of subterfuge is illegal. Regrettably, it's also very hard to prosecute unless the owner/property manager or the guests concede that the lease was fraudulent. Bill 41 CD1 will eliminate this loophole by requiring vacation rental owners to create 180-day leases in place of the phony 30-day leases. Vacation rental owners can only rent a vacation rental twice a year and for most of them, it would be unprofitable.
Mauka · 4 years ago
If the zoning is residential, then that is what it should be. Permanent residences for residents. NO vacation rentals, B&B's, motels, hotels or any type lodging for less than 180 days should be allowed residential zoning. It's that simple. Bill 41 CD1 eliminates the loopholes that Ordinances 19-18 (Bill 89) did not resolve.
Mauka · 4 years ago
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