In 1986, after extensive public hearings and debates, the City Council concluded visitor lodging businesses were not appropriate for residential zoned neighborhoods and passed Land Use Ordinance (LUO) 86-96 that prohibited transient rentals (rentals for less than 30 days) for all zoned districts except resort and resort mixed-use. In 1989, the City Council passed LUO 89-154 that specifically prohibited new Bed and Breakfast hotels (B&B’s) in residential zoning, but grandfathered existing Transient Vacation Units (TVU’s) and B&B’s with non-conforming use certificates (NUC) that proved that they were in operation prior to the passing of the ordinances. This compromise was agreed upon to avoid possible “unjust taking” law-suits, but included the assurance by the City Council that visitor lodging businesses would ultimately be removed from residential-zoning via attrition . The legislative intent of these ordinances was to prohibit hotel-like businesses from operating outside resort-zoning and protect residential-zoning for residential uses.
Sadly, illegal vacation rentals and B&B lodges have proliferated in the residential community of Kailua. It is now estimated there are over 1600 visitor lodging rooms in Kailua that were previously residential homes and long-term rentals. That would be the almost the equivalent of the Kahala Resort, The Royal Hawaiian Hotel, Marriott Ihilani Resort and the Turtle Bay Resort being located in Kailua.
Seven years ago, after being lobbied by a special interest group of illegal vacation rentals and B&B hotel owners, a City Council member by request proposed a bill to legalize visitor lodging businesses in residence zones. The public purpose behind this action remained obscure.
After extensively reviewing the issue, the Honolulu Planning Commission “unanimously” rejected all proposed bills that allow additional visitor accommodations in residential zoning. This decision required the City Council to have a super-majority in order to pass any of the proposed bills. Commission Chair Karin Holma summarized their decision by stating; “Legalizing bed and breakfast is spot zoning without the legal process involved and it’s difficult for me to justify the legalization of mini-resort use in a residential area…I don’t see much evidence of a community need or benefit. I think this is a really slippery slope… There is a lot of money to be made in bed and breakfast and for us to think that allowing more of them will not result in something uncontrollable could be a serious problem.”
A tsunami wave of community groups and individuals from around Oahu came forward to oppose all bills that allowed additional visitor lodging businesses in residential zoning including the Kuli’ou’ou/Kalani Iki Neighborhood Board No.2, Waialae/Kahala Neighborhood Board No. 3, Diamond Head/Kapahulu/St. Louis Neighborhood Board No. 5, Waianae Neighborhood Board No. 24, North Shore Neighborhood Board No. 27, Koolauloa Neighborhood Board No. 28, Kailua Neighborhood Board No. 31, Waimanalo Neighborhood Board No. 32, ILWU Local 142, Unite Here Local 5 AFL-CIO, Hawai`I, League of Women Voters-Honolulu, The Institute for Human Services, Punalu’u Community Association, Waimanalo Beach Lots Association, Livable Hawai’i Kai Hui, Save Oahu’s Neighborhoods Hawai`I, Lanikai Community Association, LaniKailua Outdoor Circle, Keep it Kailua, Senator Carol Fukunaga, Senator Fred Hemmings,, Senator Ken Ito, Representative Lyla Berg., Representative Michael Magaoay, Representative Cynthia Thielen and Representative Gene Ward and petitions with over 2,000 signatures from Oahu residents.
No Neighborhood Board and no community associations came out to publicly support the proposed legislation that would allow additional visitor lodging businesses in residential neighborhoods.
On December 16th 2009, after careful deliberations, the City Council in third reading rejected Bill 7 that would have allowed B&B hotels in residential zoning. Numerous residents and community groups applauded their final decision.