Keep It Kailua

The Oahu vacation rental industry is facing a major issue of illegal activity. Property owners are renting out their properties to vacationers for less than 30 days, which is against the rules. To hide these illegal rentals, property owners create fake or misleading 30-day contracts, which makes it difficult for neighbors and city inspectors to enforce the rules. While the illegal vacation rental industry claims that it rents primarily to traveling nurses, students, and displaced families, the reality is that it caters to vacationers. This has become a major issue, and the state legislature has recognized the loophole. To address this issue, they have created two bills, SB2919 and HB1838, which will allow the counties to phase out vacation rentals in residential-zoned neighborhoods and require vacation rentals to only rent once every 90 days. The Keep it Kailua community group supports these bills and hopes that they will be passed and signed by the governor.

The Hawaii Legislature has proposed bills HB1838 and SB2919 – Both bills give the Counties the authority to phase out vacation rentals in residential zoning. Both bills have passed their first hearings and are strongly supported by the Oahu, Maui, Kauai & Hawaii County governments. Maui Strong, Sierra Club, Housing Hawaii’s Future, Save Oahu’s Neighborhoods and Keep it Kailua.

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=2919&year=2024

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=HB&billnumber=1838&year=2024

On Oahu, the bill would assist the DPP in eliminating a loophole that allows illegal vacation rentals to skirt the law by creating fake 30-day contracts for guests who stay less than 30 days.

We need your help! Both Bills will have another hearing. As we are only given 48 hours notice of Hearing dates, we are asking that you prepare now. Here’s what you can do to help in passing these important Bills:

• Register on the State Capitol website to enable testimony submission.

• Prepare your testimony now. Tell your personal story of how vacation rentals have taken housing opportunities away from you and other local residents and/or have negatively changed the residential character of your neighborhoods. Let them know that the Home rule of the counties should prevail in determining where vacation rentals can be allowed in our communities.
• Call or email your local legislators. Look up HERE https://www.capitol.hawaii.gov/fyl/. Communicate your concerns about these Bills. As a constituent, you are VERY important to them. The following legislators are key at the next Hearings: Senator Rhodes, Senator Dela Cruz and Representative Tarnas.

“Renting to tourists 12 times a year in our neighborhoods is unacceptable!”

Our residential neighborhoods are being bought out by mainland investors who are able to out-bid local families because they are running mini-hotels. The new vacation rental business model is to rent 12 times a year (1x a month) to tourists.

Bill 41 will stop this loophole by requiring all residentially zoned properties to be rented for a minimum of three months (90 days). The 3 month minimum will make renting to tourists unprofitable since most vacation rental tourists stay only 14-30 days.

Oahu is facing a housing crisis. Not only is there a shortage of homes for local families, but the cost of residential-zoned homes and long-term rentals is simply unaffordable for most residents.

Vacation rentals in Residential zones increase the number of tourists who visit Oahu to unsustainable levels and promote tourism sprawl.

WE NEED YOUR TESTIMONY FOR BILL 41 CD1 (Please Share)

Please support Bill 41 CD1 by testifying at the Zoning Committee on Thursday 1/20/22 at 9 AM via Zoom and submitting written testimony to the council.

BILL 41 CD1:

Will increase the number of long-term (90 days and longer) rentals in our community!

Will stop Tourism Sprawl from over-taking our residential and rural communities and give our neighborhoods back to the residents!*

Will eliminate loopholes like “fake 30-day” contracts that have allowed illegal vacation rentals to proliferate in our neighborhoods!

Will allow vacation rentals to expand in resort-zoned communities where they belong!

Recommended amendments to Bill 41 CD1: We recommend Bill 41 define a short-term rental as 180 days or less as the Mayor and the DPP Director recommend. This is the same definition that the State of Hawaii, Maui County, Kauai County, and the Kaka’ako Special District uses to define short-term rentals.

ZOOM MEETING TESTIMONY: (Quick link to register to speak)

Persons may submit oral testimony remotely through the Zoom video conferencing platform. To participate, persons should visit zoom.us, click “Join,” enter meeting ID 98283806262, and complete the registration process. Registrants will receive an email that contains links and information on joining the meeting by either phone or video conference. Zoom testifiers are strongly encouraged to register at least 24 hours before the start of the meeting. Remote testimony will be taken at the start of the agenda and then closed.

To audio conference on the day of the meeting, call +1-253-215-8782, enter ID 98283806262, and Passcode 904641.

Each speaker may not have anyone else read their statement and is limited to a one-minute

WRITTEN TESTIMONY: (Quick link to submit written testimony)

Written testimony may be faxed to (808) 768-3826, transmitted via the internet at http://www.honolulu.gov/ccl-testimony-form.html, or mailed to Office of the City Clerk, Attention: Information Section, 530 South King Street, Room 100, Honolulu, HI 96813. If submitted, written testimonies, including the testifier’s address, email address, and phone number, will be available to the public at https://hnldoc.ehawaii.gov. Written testimony will not be accepted in person at the meeting.

Should you have any questions, please call (808) 768-3801 or send an email to guehara@honolulu.gov.

You can read the entire Bill 41 CD1 here:

https://hnldoc.ehawaii.gov/hnldoc/document-download?id=12809

• Stops illegal vacation rentals and unscrupulous Realtors from creating “Fake” 30-day leases by redefining short-term rentals 180 days or less.
• Allows long-term tenants to continue to rent month to month.
• Raises fines from $10,000 to $25,000 per violation and per day that violation continues.
• Only allows “new” short-term rentals in or near resort zone areas like Waikiki, Ko Olina and Turtle Bay.
• All existing short-term rentals with a Non-conforming Use certificate since 1987 can continue to operate and apply for new permits.
• Creates a special fund to specifically improve the City’s enforcement efforts against illegal vacation rentals.
• All legal vacation rentals advertisement must include a registration number and their TMK number. Illegal vacation rentals will be removed from all advertisements or face significant fines.

• BOTTOM LINE: Illegal vacation rentals will either shut down or face significant fines. Oahu housing supply for residents will increase and our residential neighbors and communities will stay residential in their character!

Please support the DPP’s draft bill by submitting supportive testimony to the Planning Commission by

1) Email: info@honoluludpp.org

2) Fax: 768-6743, or

3) Mail: Planning Commission, 650 South King Street, 7th Floor, Honolulu, Hawaii 96813, and must be received by 4:30 p.m., Tuesday, August 31, 2021.

Attend in-person at Mission Memorial Auditorium, Mission MemorialBuilding, 550 South King Street, Honolulu, Hawaii

DATE: Wednesday, September 1, 2021

TIME: 11:30 a.m.

or via a computer: (Please mute your devices except to testify) at:

https://globalpage-prod.webex.com/joinMeeting

Number: 123 096 9887

Meeting Password: dpp1

After extensive analysis and consulting with the residential communities and civic leaders, the City Administration and the Department of Planning and Permitting have introduced a very comprehensive and well-written Illegal Vacation Rental Enforcement Bill that we support as written.

Illegal vacation rentals have plagued Oahu for many years. These illegal businesses reduce our residential housing supply and negatively alters the social fabric of our neighborhoods and our residential communities. In recent years tourism numbers have exploded to over 10 million per year, but no new hotels were built. A significant number of tourists are now staying in illegal vacation rentals and are overwhelming our beaches, parks, trails, and roads to a point that is harming residents’ quality of life.

The proposed bill as written will help bring balance back to Oahu!

Please support the DPP’s draft bill by submitting supportive testimony to the Planning Commission by 1) Email: info@honoluludpp.org, 2) Fax: 768-6743, or 3) Mail: Planning Commission, 650 South King Street, 7th Floor, Honolulu, Hawaii 96813, and must be received by 4:30 p.m., Tuesday, August 31, 2021.

And attending in person at Mission Memorial Auditorium, Mission MemorialBuilding, 550 South King Street, Honolulu, HawaiiDATE: Wednesday, September 1, 2021TIME: 11:30 a.m.
or via a computer: (Please mute your devices except to testify) at:

https://globalpage-prod.webex.com/joinMeeting

Number: 123 096 9887Meeting Password: dpp1

Download DPP Summary and Proposed bill

Register to testify by April 5 (See details below) The DPP has proposed administrative rules to implement ordinances 18-19 of the Honolulu Land Use Ordinances that govern short-term rentals. The rules primarily focus on the process for granting B&B permits and enforcement actions against illegal vacation rentals.

Keep it Kailua proposes:

1. Both the permit granting process and all enforcement actions against illegal vacation rentals should be totally transparent to the public and consumers

.2. We recommend all proposed B&B permit locations be posted on the department’s webpage.

3. Neighbors and the public should be allowed to oppose permits if the properties are in violation of any Land Use Ordinances or there are other good causes for the denial of the permits.

4. All property locations, the owners, and the property management firms who have received a complaint and/or an NOV for operating an illegal short-term rental should be posted on the department’s webpage with the fine issued and what corrective actions were taken.

5. The 1000′ separation between short-term rentals in residential zoning must be strictly adhered to and any new permits that are found to be in violation of the separation requirement must have their permits immediately revoked.

6. As ordinance 18-19 dictates; all initial short-term rental violators should pay a civil fine of $1000 and $5000 per day for each day the violation persists. All recurring violators should pay a fine of $10,000 and $10,000 for each day the violation persists. (NO MORE REDUCTION OF FINES).

Virtual via Webex and in person at Mission Memorial Auditorium | 550 South King Street, Honolulu.

The public may join the public hearing and offer testimony from a computer, smartphone, telephone, or in-person as follows:

1. Join the public hearing from a computer:(Please mute your devices except to testify) https://globalpage-prod.webex.com/join Meeting Number: 187 616 9319Meeting Password: dpp1

2. Join the public hearing from the WebEx smartphone app:(Please mute your devices except to testify)Meeting Number: 187 616 9319Meeting Password: dpp1

3. Join the public hearing from a telephone (audio only):(Please mute your devices except to testify. Press *6 to unmute and re-mute yourselves)408-418-9388 (USA Toll)Access code: 187 616 9319 Numeric meeting password: 37714.

In-person attendance:

All in-person attendees and testifiers must wear a mask while on the Mission Memorial premises and must maintain six feet of distance between themselves and others or they will not be allowed in the Auditorium.

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At a recent Oahu Vacation Rental group meeting, illegal vacation rental owners and Realtors were distraught and angered when their attorney told them the bad news that their sham 30-day vacation rental model was illegal if they charged a daily rate or restricted their guest’s occupancy for less than 30 days. Many of the illegal vacation rental owners want to ignorantly believe that they are allowed to offer one short-term rental (less than 30 days) once a month, but the attorney said that’s not allowed and illegal vacation rentals would be violating the law if they did.

The attorney also disappointed the group when he told them their belief that the Honolulu Short-term Rental zoning law violates their constitutional property rights was bogus and has no legal merit. The attorney cited a 1926 US Supreme Court ruling (Euclid v. Ambler) that affirmed there was valid government interest in maintaining the character of a neighborhood and in regulating where certain land uses should occur, including short-term rental businesses.

Keep it Kailua has received numerous inquiries regarding the recent news that the DPP and the Kokua Coalition (dba Hawaii Vacation Rental Owners Association) signed a settlement agreement and what it means in regards to the recently adopted Short-term rental ordinances 19-18 and the so-called 30-day rental sham.

We asked our legal team to analyze the agreement and give their opinions.

Our legal team unanimously believes the Hawaii Vacation Rental Owners Association made a gigantic mistake in filing their lawsuit and their subsequent negotiations with the City. The court-approved agreement had no significant impact on the ordinances, but it did substantially strengthen the law and will help the DPP issue more violations and fines.
The new agreement (sanctioned by the Federal Court) declares unpermitted short-term rentals cannot offer a rental whose price is based on a less than 30-day occupancy. In other words, they must offer the property based upon a minimum “30-day” rental and any offer that is based upon less than 30 day occupancy is illegal.

The agreement stated “solicitations and offers to rent property violate Ordinance 19-18 if the price paid for the rental is determined, in whole or in part, by an anticipated or agreed upon occupancy of the property for less than thirty days”.
The agreement also specifies that it is illegal for the property owner or their representatives to limit the actual occupancy to less than 30 days or conditioned the right to occupy the premises for the 30-day rental period on the payment of additional consideration.

It’s only a matter of time that every vacationer will learn that they have the legal right to stay on a property for a minimum of 30-days, regardless of what price they pay, or what they told owners would be their expected arrival and departure dates.

According to the agreement, renters are also allowed to leave a property at any time during a 30-day period, but they also have the right to reenter property during the same 30 day period and no other party, including the owners, are allowed to utilize the rental property.

This is a detail many unscrupulous Realtors and Illegal vacation rentals owners have not been disclosing to the renters. The owner and their representatives will try to trick the renters into giving them their arrival and departure dates. They then will quote the illegal vacation rental based upon the guest’s estimated length of stay, but not explain to them they are actually renting for 30 days. This trick gives the renters the impression that they are paying for a less than 30-day rental, which of course fits their travel plans and makes the lodging more attractive than staying in legal accommodations.

Only after the renters have committed to the short-term rental, do the owners or Realtors request the renters to sign a 30-day rental agreement, which they call a “formality” required by the City zoning laws. The rental agreement’s start and finish date is made after the trip is agreed upon and is at the discretion of the property owner or their representative, not the guests. One of the unethical tricks proposed at the recent Illegal vacation rental meeting was to slyly make the ending date of a fraudulent 30-day contract the same date the short-term rental guests proposed to depart. That way if the guests find out that they are entitled to stay longer on the property during their stay, it will be too late for them to do anything legally about it.

Of course, this scam and deception is illegal. It not only breaks City and County Zoning laws, but we also believe it is in violation of State of Hawaii statutes for deceiving the consumer and violates Landlord-tenant laws. We recommend complaints be direct to not only the DPP, but also the State Consumer Affairs office and the Regulated Industries Complaints Office (RICO).

In our opinion, the recent lawsuit filed by the Hawaii Vacation Rental Owners Association (HVROA) vs. the City & County of Honolulu is frivolous and has no merit.

It appears to us the purpose of the lawsuit is a desperate attempt to delay the enforcement actions by the City against illegal vacation rental owners and the unscrupulous Realtors who manage them.

The lawsuit is actually a “Motion” for a temporary restraining order (TRO) to delay the City from enacting the new enforcement ordinances (19-18 Bill 89) against illegal vacation rentals (which have been illegal since 1987). We believe there is no actual legal “complaint” against the ordinance and a Judge shouldn’t entertain this motion unless it was connected to an actual challenge to the ordinance. We don’t see any valid cause for action.

Overall, HVROA has little going for them and they use a lot of attorney “double-talk” to try to make a case.

A major portion of the suit claims the new ordinances and/or DPP regulations cause legal long-term rentals (30-days plus) to be “illegal” if tenants are not physically on the property for 30 consecutive days. This is absolutely ridiculous. No Honolulu ordinances or DPP Administrative regulations make legal long-term rental illegal. The HVROA lawsuit cites the following Q&A section of the DPP’s website:

Question: To comply with the law, people will be advertising only 30-day stays. But, in follow-up conversations, they will offer daily and weekly stays. How will you know who’s doing this to skirt the law?

Answer: Advertising is a new violation, but actually staying in a home for less than 30 days is still a violation. The DPP will continue to monitor for occupancy violations. Also, just as a caution to homeowners, Governor David Ige recently signed House Bill No. 807 (Act 114), which makes it a misdemeanor offense to knowingly make a false statement to a county inspector.

Obviously, the DPP’s Q&A’s are not the verbiage of the Land-Use Ordinances and are also not DPP’s administrative regulations. Even HVROA lawyer, Greg Kugle, admitted the new ordinance appears to allow 30-day rentals according to a Star-Advertiser article. It’s pretty clear the Q&A is only meant to be informative and help explain the new ordinance and indicate how certain situations would be affected. The average person would understand the DPP would consider the length of stay of a visitor as evidence of a less than a 30-day rental, but additional evidence may be necessary to issue a violation (short-term rental ads, confession by the guests, etc…). In our opinion, HVROA claims that a Q&A on a website is statutory in nature is rather idiotic!

The DPP and Corporate Counsel has repeatedly stated to the public that tenants of a long-term rental are not required to be physically on a property for 30 days or longer in order to not be considered a short-term rental, but the tenants must be given full possession and tenant rights to the property at an agreed-upon lump sum for at least 30 days. They can come and go as they please for at least 30 days and there can not be any additional rental or rental fees based upon the length of stay for at least a month.

Sadly, we have observed numerous illegal vacation rental owners and unscrupulous Realtors offer and create fraudulent 30-day contracts or other unlawful schemes to hide a less than a 30-day rental. If the evidence proves the contracts are fraudulent and/or a property owner/agent knowingly offers or provides a short-term rental, then a notice of violation should be issued.

The motion for a TRO should be denied by the Court and illegal vacation rental owners should simply stop breaking the law or face significant fines for their actions!