The head of Honolulu’s permitting department has recused himself from working on short-term rental legislation after conflict of interest concerns were filed with the Honolulu Ethics Commission. 

Department of Planning and Permitting Director Dean Uchida attracted complaints when he helped the city administration craft Bill 41, which seeks to rein in short-term rental businesses on Oahu. 

An early version of the bill received vociferous pushback from rental operators in part because it would have forced owners in condo-hotel buildings to essentially convert their units into hotel rooms and pay hotel management fees.

Uchida’s wife, Joy Uchida, is an executive with Aqua-Aston Hospitality, which owns over a dozen condo-hotel properties in Waikiki and stood to benefit from the legislation’s passage. Asked about ethics concerns regarding his wife last year, Uchida said he didn’t view the situation as a conflict of interest.

The Honolulu Ethics Commission received at least one complaint about the matter late last year. It investigated and shared its findings with the complainant in a letter on March 30, according to a copy obtained by Civil Beat in which the complainant’s name is redacted.

City law prohibits employees from taking “any official action directly affecting a business or matter in which such person has a substantial financial interest.” According to the letter, the commission found there is “insufficient evidence” to prove that Uchida broke the law but said he should step away from Bill 41 nonetheless. 

Uchida’s job duties include preparing zoning ordinances, maps, rules, regulations and amendments, but it is the Honolulu Planning Commission that holds hearings and issues recommendations to the City Council, Laurie Wong-Nowinski, the assistant executive director of the commission, wrote. 

“Further, upon review of Dir. Uchida’s spouse’s employment, we conclude that the terms and conditions of his spouse’s employment is not dependent on whether Bill 41 passes or not,” Wong-Nowinski wrote. 

“Thus, Dir. Uchida has an indirect financial interest in the hotel industry that is not in violation of the city’s ethics laws.” 

However, even the appearance of a conflict of interest could be damaging for Uchida’s and the city’s reputation, she wrote in an addendum.

Wong-Nowinski recommended that Uchida delegate Bill 41 responsibilities to his staff and “recuse himself from any further participation in an abundance of caution to avoid even an appearance of a conflict of interest.”

As a result of that directive, Uchida filed a statement with the city disclosing a conflict of interest and recused himself, Wong-Nowinski wrote.

Uchida declined to comment on his recusal on Tuesday.

The hotel-related provisions in Bill 41 that caused the controversy have since been removed from the legislation, which passed third reading in the zoning committee last month. 

The bill is expected to go before the full City Council at a future meeting. 

In a statement, the Oahu Short-Term Rental Alliance, or OSTRA, said the recusal was “long overdue” and that the legislation should be thrown out.

“He had direct authority over a law that would benefit his spouse,” short-term rental operator John Lisoway, one of multiple people who complained about Uchida to the commission, said in an interview. “That in itself is a perceived conflict of interest.”

Even now, Lisoway said there are parts of Bill 41 that he believes give unfair advantages to the hotel industry. And the legislation specifically allows owners in the Waikiki Sunset and Waikiki Banyan, both Aqua-Aston properties outside of Waikiki’s resort zone, to operate short-term rentals, Lisoway noted. 

“People start to get suspicious,” he said. “They have distrust in politicians, in the administration.”