A proposed crackdown on short-term vacation rentals on Oahu has been amended to address several areas of criticism from rental operators, a move that is getting a mixed reaction from the community.

Mayor Rick Blangiardi’s administration introduced Bill 41 last year. The proposal would require bookings to be no shorter than 180 days, increase fees and fines, and compel some condo owners to operate their units as hotel rooms, among other land use changes. The mayor said he aimed to shut down the short-term rental business. 

Brandon Elefante, chairman of the City Council’s zoning and planning committee, has since proposed an amendment, written in part by the Department of Planning and Permitting, that “attempts to clarify, simplify and reorganize Bill 41 and focus directly on issues related to short-term rentals,” according to the council. 

“With so many moving parts to this issue, it is important that all the pieces fit together cohesively,” Elefante said in a statement. “We welcome community input as this process is complex and multifaceted. We want to find a path forward that is fair and enforceable.”

City Councilman Brandon Elefante, chair of the zoning and planning committee, listened to hours of testimony on Thursday.
City Councilman Brandon Elefante, chair of the zoning and planning committee, listened to hours of testimony on Thursday. Screenshot/Olelo/2022

Short-term rental operators have strongly opposed Blangiardi’s proposal. Elefante’s bill, which he further amended verbally on Thursday, offered several points of compromise.

It would increase the renewal fee for nonconforming units from $600 every two years to $4,000 every two years, instead of Blangiardi’s originally proposed $5,000. Unlike the original Bill 41, it would allow people to own more than one rental property and restore their ability to legally operate in resort districts.

It would also allow bookings for a minimum of 90 days, up from the current 30 but half the time of Blangiardi’s proposed 180 days. 

But at Thursday’s zoning and planning committee meeting, numerous short-term rental operators testified they are still unhappy with the bill. 

Margo Brower, a broker with Captain Cook Real Estate, called the legislation “a futile attempt to create a monopoly for the hotel industry.”

Elefante’s amended Bill 41 would allow short-term rentals in the resort zone of Waikiki. Anthony Quintano/Civil Beat

“This is a huge waste of time, and you know it will result in years of lawsuits,” she said. 

Several testifiers who operate short-term rentals urged the city to enforce legislation passed in 2019. Ordinance 19-18 would have permitted 1,700 short-term rentals in residential areas and imposed fines of up to $10,000 a day for violators.

It was meant to be paired with memorandums of understanding with rental platforms, in which the companies would help with enforcement, but those MOUs never went into full effect because DPP never permitted those 1,700 units.

DPP Director Dean Uchida said those MOUs are now “moot” and the platforms are no longer cooperating with the city. 

“Once they saw the initial drafts of Bill 41, they stopped talking to us,” he said.

In response, Ann Simons, a Hawaii-based government affairs manager for Expedia Group, said the company has “worked to be part of a solution that serves the entire community.”

“Expedia Group supports the reasonable regulation of vacation rentals, as well as effective compliance with those laws,” she said. “Rather than debate radical changes, threaten economic recovery, and create needless unenforceable burdens, we urge the County to implement the existing law. Responsible vacation rentals play a critical role and are an essential option for travelers and non-tourist visitors alike.”

In their testimony, some rental owners pointed to Kauai, where illegal rentals went from 1,500 in 2017 to less than 50 last year thanks to partnerships with Expedia and Airbnb, as The Garden Island reported.

Kaiula Jack, a rental operator, asked why Oahu can’t do the same. 

“There is currently no meaningful enforcement,” he said. 

Councilwoman Esther Kiaaina said people were making a fair point about Kauai but noted that the Garden Isle has a 180-day booking rule. She suggested inviting Kauai permitting officials to a future meeting to share their experience.

Meanwhile, several tourism industry officials and local residents spoke in support of the city’s effort to rein in vacation rentals. 

“The profiteering from non-regulated vacation rentals has perverted our neighborhoods and created a culture of selfish entitlement and a disregard for community standards,” Carl Freidl wrote in submitted testimony.

“The disrespect of those crying about the infringement on their pursuit of happiness spit on community norms of respect and aloha,” Freidl added.

Bryantt Bernardo, a longtime resident and teacher, said in written testimony that he and his wife have been saving up to buy a home for 15 years, but rising real estate prices keep their dream out of reach.

“How are we supposed to compete with rich mainland people who are not looking at buying a home but paying over the normal cost because they see this as an investment to become even richer?” he wrote. “This bill doesn’t stop anyone (local or mainland) from renting their home as a long-term rental to Hawaii residents. RESIDENTS should be able to find a place to rent or buy.”

Kekoa McClellan, a spokesman for the American Hotel and Lodging Association, said the industry is concerned about the lack of affordable housing on the island and how it contributes to hotels’ struggle to retain staff.

The taxation of bed and breakfast units and transient vacation rentals will be addressed by separate legislation, Elefante said. The Blangiardi administration initially had pitched the idea of collecting over $3 million in bed-and-breakfast and transient vacation rental tax revenue and using it to enforce the new law. 

Following Thursday’s meeting, the bill will return to the zoning committee for further discussion, the council said in a press release. 

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