Why Neighborhoods Suffer

Kailua residential neighborhoods are being harmed with the proliferation of Illegal visitor lodging. Scofflaw property owners break the law because they can generate revenue 5 to 6 times what a residential rental would earn. The proponents of illegal vacation rentals and B&B hotels claim the only challenges with their businesses being located in residential zoning are nuisance issues such as noise and parking. These impacts do exist, but they are not the primary issues relating to visitor lodging businesses in residential zoning.

The foremost problems with visitor-lodging businesses in residential-zoning are the following:

Reduces Residential Housing Supply
Allowing residential homes and rooms to become visitor lodging reduces Oahu residential housing. In communities such as Kailua, the North Shore and Laie, there has been severe shortage of available housing for residents that can be attributed to the proliferation of illegal vacation rentals and B&B hotels. As an Island community, Oahu has finite quantity of land that could be used for residential housing. Reducing the availability of housing in one community, ultimately will impact other communities.

Drives-up Property Values and Long-Term Rental Rates
This might be good for some residents who already own homes (54%) , but it’s definitely bad for residents who are renters or hope to own a home someday. Because visitor lodging businesses have a significant higher cash-flow than residential rentals, investors (including out-of-state) can easily outbid Hawaii residents who want to use a residential property as a home or a residential rental. These higher purchase prices properties will also increase property-tax assessment values for surrounding properties.  Real estate experts believe illegal visitor lodging in residential neighborhoods have contributed to Honolulu’s record-high long-term rental rates by reducing housing inventory and increasing property owners’ expectations for return on investment .

Alters the Residential Character and Ambiance of Neighborhoods and Communities
Visitor lodging businesses in residential neighborhoods compromise the social fabric of neighborhoods and their communities by displacing local residents from neighborhoods and their communities. Their presence changes the character of a neighborhood from being residential to vacation home or de-facto resort. Many Hawaii residents chose their residential-zoned neighborhood because they want to live in a neighborhood where they know their neighbors or there are neighborhood families with children that their kids can play with. Allowing visitor lodging businesses in their neighborhoods is a taking of their rights to enjoy a residential neighborhood environment. Furthermore, pushing mini-hotels into residential areas can also create resident resentment that could cause conflict with visitors and mar future tourism sustainability.

Jeopardizes the Hotel Industry and its Employees
Visitor lodging businesses in residential zoning have unfair competitive advantages that could lead to reduction in existing hotel rooms and their employees. The owners of residential visitor lodging businesses do not pay resort-zoned property tax rates, employ union employees or carry commercial liability insurance as required for most Oahu hotels .

Compromises Neighbors’ Safety and Security
Visitor lodging businesses bring in a constant stream of strangers into a neighborhood, making it difficult for neighbors to know who belongs in the neighborhood and who does not.  In addition, visitor lodging guests do not need to comply with Hawaii’s sexual predator laws and register their stays with authorities since their visits will be short term. Neighbors could be living next to convicted sexual predators without being informed. In contrast, long-term renters who are convicted sexual predators are required to register their residence with authorities who will post their name and addresses on the Internet.

Keep it Kailua believes all future visitors lodging should only be located in resort-zoned land parcels. New visitor accommodation developments in Waikiki, Ko Olina and the North Shore resort-zoned areas are including vacation rentals in their product mix. Investors who wish to partake in the vacation rental industry can purchase properties in these areas. If individuals or communities determine they would like to develop visitor lodging on non-resort zoned parcels, they have the option to follow the appropriate due-process required for re-zoning land-uses.

 

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