Short-term rental ban will disrupt Honolulu economy

from Grassroot Institute, April 26, 2022

Joe Kent tried his best during a Monday morning interview with KHON2 reporter Dallis Ontiveros to explain the negative ramifications of Bill 41. But Honolulu’s mayor went ahead and signed the bill the next day anyway

Approved 8-1 by the Honolulu City Council, Bill 41 essentially bans short-term rentals on Oahu, with a few exceptions, and will fund the creation of a new city enforcement division consisting of seven new employees whose sole duty will be to ferret out Honolulu homeowners who dare to rent out their homes or parts of their homes for less than 90 days.

Kent, Grassroot Institute of Hawaii executive vice president, dubbed the future new city employees “vacation cops.”

“There are going to be seven full-time vacation cops who will send out notices and requests to inspect your home and see if you really are doing a short-term vacation rental or if it’s really a long-term rental, and they’ll ask you all kinds of questions. So this is a violation on privacy and property rights, and it’s a huge enforcement division that is going to be funded,” he said.

Bill 41 — which barring any successful legal action takes effect in six months — is also a gift to Oahu’s hotel operators, who now will have a virtual monopoly on providing short-term rentals to visitors to Oahu.

“This is going to be a huge impact on the economy,” Kent said. “We’re talking thousands and thousands of jobs, hundreds of millions of dollars. But also it’s going to affect locals too because vacationers and locals come to Hawaii, either from the mainland or from the islands, and visit tutu, and now it’s going to be harder to find a place to stay.”

See the entire interview above. A complete transcript is provided.

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4-25-22 Joe Kent interviewed by Dallis Ontiveros on KHON2 “Wake Up 2day”

Kristine Uyeno: Changes to short-term rentals could happen soon with summer just around the corner.

Ross Shimabuku: Dallas Ontiveros joins us live from Honolulu Hale with more details. Morning, Dallis.

Dallis Ontiveros: Good morning, Kristy and Ross. Yes, we’re talking about Bill 41 this morning. It relates to short-term rentals in residential areas now being less than 90 days. Right now it’s currently 30 days. However, nothing has been signed into law just yet by Mayor Rick Blangiardi. 

But here joining us on “Wake Up 2day” we have more to discuss. This is Joe Kent. He’s the executive vice president of Grassroot Institute of Hawaii. Good morning, Joe.

Joe Kent: Good morning.

Dallis: Thank you so much for joining us.

Joe: Thanks for having me.

Dallis: So for our viewers who are watching right now, say in your own words, what’s the update on Bill 41 right now? And what do things look like moving forward?

Joe: Well, Bill 41 was passed at the Council and it’s sitting on the mayor’s desk. It basically bans all short-term vacation rentals throughout O’ahu, except for those in the resort districts. But even those in the resort districts have to do it for 90 days, at least. These are no longer short-term rentals. These are more like medium-term rentals, you might say.

Dallis: As far as the overall impact goes, it’s already hard enough to live out here in Hawaii. People are looking for ways to make money. How is this not only going to impact the homeowner?

Joe: This is going to be a huge impact on the economy. We’re talking thousands and thousands of jobs, hundreds of millions of dollars. But also it’s going to affect locals too because vacationers and locals come to Hawaii, either from the mainland or from the islands, and visit tutu, and now it’s going to be harder to find a place to stay.

Dallis: Something that we’ve been curious about this morning is how this is going to be regulated. How is this going to be enforced?

Joe: We have “vacation cops” put in the bill; there are seven enforcement officers full-time that are going to be going around Oahu, trying to see whether or not people are doing short-term rentals. They can request to see inside your house to snoop around. This is a big deal and we’re going to see a huge impact on our economy.

Dallis: “Vacation cops.” Interesting. 

If this bill just does get signed by mayor Rick Blangiardi, what’s going to happen to the places that have been grandfathered in and who are operating differently right now?

Joe: Well, there’s about 800 lucky ducks from the 1980s who got a nonconforming-use certificate that can still do short-term rentals. But if you’re not one of those 800 people, you basically can’t do it across Oahu … unless you live in the resort districts, in which case you could do it for 90 days, but you still have to get registered. 

S this is a whole bunch of red tape that is covering Oahu. It’s a blanket ban on short-term rentals.

Dallis: But in a way, doesn’t Bill 41 somewhat help the hotel industry because there’s this big shift with short-term rentals?

Joe: That’s right. So if people can’t stay in short-term rentals, they’ll stay in a hotel, and now, there’s only so much hotel space, and now, we’re going to use that even more. So this is going to jack up prices in hotels, who already have risen their prices because of our increased taxes on hotels.

Dallis: And we all know international travel hasn’t fully reopened either, so that’s going to be another factor, too.

Joe: That’s true. And locals also pay for these high prices when they visit tutu on Thanksgiving; they’re all going to be competing for space in Waikiki.

Dallis: In your own words, why do you think Bill 41 was passed with a 7-1 vote?

Joe: It was passed to ease the housing situation, but vacation rentals are not really the problem with the housing situation. The problem is we live in a state that has the most burdensome housing regulations in the nation. If lawmakers focused on that, they could do a lot to ease the housing situation, but this is more of a scapegoat.

Dallis: I know in the last half hour you mentioned in this Bill 41, in your own words, “vacation cops” would be included, which means that seven people would go through these popular websites looking for those who are operating differently, who are not following the rules. But how are they going to really regulate this? Are they going to be showing up at your house? Or how do you even prove that you are following the rules?

Joe: There are going to be seven full-time vacation cops who will send out notices and requests to inspect your home and see if you really are doing a short-term vacation rental or if it’s really a long-term rental, and they’ll ask you all kinds of questions. So this is a violation on privacy and property rights, and it’s a huge enforcement division that is going to be funded.

Dallis: Joe Kent, thank you so much for joining us here on “Wake Up Today,” and we look forward to the future for more updates on this issue.

Joe: Thanks so much.

Dallis: Again, Mayor Rick Blangiardi has not signed Bill 41 yet, so if there are anymore developments we will keep you posted first, whether it’s through our KHON2 mobile app where you can receive breaking alerts [and] free downloads, and also on our website at KHON2.com. 

Reporting here from the Honolulu Hale, Dallis Ontiveros, KHON2 news, working for Hawaii.