Oahu's new vacation rental law takes effect 8-1-2019

By
Real Estate Agent with Century 21 iProperties Hawaii RS-54129

City and County of Honolulu illegal vacation rentals law effective August 1, 2019

Bill 89 was adopted by the City Council on June 17 and signed into law as Ordinance 19-18 by Mayor Kirk Caldwell on June 25, 2019.

The new ordinance:

  • Allows a limited number of new Bed and Breakfast Homes (B&B) in non-resort areas under a new registration process, with annual renewal required.
  • Continues to prohibit Transient Vacation Units, or “unhosted” rentals, in non-resort areas, unless the dwelling has a Nonconforming Use Certificate (NUC).
  • Regulates hosting platforms, such as Expedia or Airbnb, requiring monthly reports to be filed with the Department of Planning and Permitting, which will share the information with City Council.
  • Makes illegal any form of advertising short-term rentals which are not in compliance with zoning regulations as provided in Ord. 19-18.

Owners of properties involved in illegal advertising will be notified, and if advertisements ar taken down in 7 days, no fine will be imposed for a first offense. If not taken down within this deadline, fines of between $1,000 and $10,000 can be imposed for each day the advertisement remains on display.

For City and County of Honolulu purposes, a short-term rental is a rental for less than 30 days.

Exemptions from Ordinance 19-18

The following properties are exempt:

  • Buildings with resort zoning subject to Article 5.  This is tricky because the ordinance does not include Article 5 language and it doesn't refer to a specific document.  I found Article 5 in the Revised Ordinances of Honolulu (ROH).  Here are the specifics:

revised ordinances of honolulu article 5

Still hard to figure out? A-2 is apartment zoning and many parts of Waikiki are in a resort zoning district. Buildings meeting the A-2 medium density apartment zoning and within 3,500 feet of a resort zoning district of greater than 50 contiguous acres "should" be legal for short-term rentals.  Note - Ordinance 19-18 adds A-1 (low density) apartment zoning to the list of buildings that can be exempt.

  • Homes and condos with non-conforming use (NUC) certificates.  Note - non-conforming use certificates were issued in 1989 and none have been issued since then.  Owners are required to renew their certificate every two years and if an owner fails to renew, the certificate expires and the non-conforming use is gone.  The certificates are rare.  I have sold one property that had the certificate. The condo is at the Makaha Beach Cabanas and it was the only unit in the building that had a certificate. The sale was years ago and I don't know if the unit still has the certificate.

Exempt Buildings (Legal for short term rentals)

The easy buildings to figure out are hotel-condos.  Examples are:

Buildings meeting the Apartment zoning criteria near Resort Zoning include (to the best of our knowledge):

  • Capri Apartments
  • Kuhio Village 1
  • Kuhio Village 2
  • Hawaiian King
  • Inn on the Park

Buildings NOT meeting zoning criteria per the Honolulu Star-Advertiser on 8/1/2019 - a surprise to owners and associations because these were presumed legal for years:

  • Waikiki Banyan
  • Waikiki Sunset
  • Kuilima Estates

A group of owners at the Waikiki Banyan are planning to sue and ask a judge to rule their building legal for vacation rentals.  The building has a front desk and has operated as a hotel for decades.

Apparently the Department of Permitting and Planning decided to use Kuhio Avenue as a boundary line for most vacation rentals.  The makai (ocean) side remains legal for vacation rentals and the mauka (mountain) side is generally illegal for vacation rentals.

Expected long term effect

Illegal vacation rentals have been an issue for years and the complaints have increased as use of the internet and vacation rental websites has proliferated.  Illegal vacation rentals make more money renting short-term and some claim they need the income to survive the cost of living in Hawaii. 

On the other hand, renters, particularly those with lower incomes, have witnessed some of the more affordable long-term rentals vanish because they were converted to vacation rentals.  Hopefully the long term rental inventory will increase and operators of illegal vacation rentals may decide to sell, temporarily adding inventory of properties on the market.

Aloha, Mike

Mike Bates (Realtor Associate)
RS-54129
Century 21 iProperties Hawaii
1585 Kapiolani Blvd #1533
Honolulu, HI 96814

Oahu MLS

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