City submits revised short-term rental bill to Planning Commission

News Release from City and County of Honolulu, August 23, 2021

HONOLULU – The Department of Planning and Permitting (DPP) is proposing major changes to the short-term rental (STR) ordinance that would not allow any new STRs in residential areas, but allow STRs adjacent to existing resort areas, and would provide needed resources to enforce against illegal STRs.

The amendments to Ordinance 19-18 are included in a draft bill that was sent to the Honolulu Planning Commission for consideration. A public hearing will be held on Sept. 1 at 11:30 a.m. For information on the draft bill and how to testify, see www.honolulu.gov/dppstr.

Because a large number of people are expected to testify, the commission has reserved Sept. 3 and 8 to continue hearing testimony, if necessary. The public is encouraged to submit written testimony or testify remotely because of limits on gathering.

Once the hearing is closed, the commission will make a recommendation to the City Council, which will hold additional hearings before acting on the measure.

Ordinance 19-18 was signed into law by former Mayor Kirk Caldwell in June 2019 and called for additional bed and breakfast (B&B) units in residential areas on O‘ahu. The ordinance required the DPP to implement a registration program for existing, legally operating vacation rentals, in addition to the new B&Bs. However, major flaws were discovered in the ordinance following a public hearing in April on proposed administrative rules to implement the ordinance.

The DPP took into consideration overwhelming community opposition to STRs in residential areas. At the same time, the bill acknowledges that there is a demand for STRs, which is why they will be permitted in and around resort areas of Waikīkī, Ko Olina and Kuilima. The bill also would allow STRs in Waikīkī’s Gold Coast.

DPP Director Dean Uchida said the COVID-19 pandemic and the sharp decline in visitors staying in neighborhood STRs reminded everyone what life was like before the proliferation of STRs.

“STRs are disruptive to the character and fabric of our residential neighborhoods,” Uchida said. “They are not consistent with the land uses that are intended for our residential zoned areas, they decrease the supply of long-term housing for our local residents, and they increase the prices and rents of housing.”

Some of the highlights of the bill:

• STRs with nonconforming use certificates (NUC) will be allowed to continue
• No new STRs will be permitted in residential areas
• New STRs will be allowed in areas adjacent to and associated with existing resort zoned property
• All STRs will have to register with the city and the certificate of registration number or their NUC number will be required in advertisements
• All newly registered and existing NUC transient vacation units (TVU) will be assessed at the hotel and resort rate for real property purposes. B&Bs will be taxed at the B&B rate
• The DPP’s enforcement procedures are being overhauled to better equip inspectors to investigate and enforce violations of the Land Use Ordinance, including provision related to STRs
• The DPP will receive proceeds from the STR fines and a portion of the resort and B&B property tax to be used specifically for STR enforcement

If you require special assistance, auxiliary aid and/or service to participate in this event (i.e., sign language interpreter, interpreter for language other than English, or wheelchair accessibility), please call 768-8000, or email your request to info@honoluludpp.org at least three business days prior to the event.

—PAU—

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