The Honolulu City Council voted 7-2 and passed Bill 41, CD1 in its 2nd reading on Wednesday, 1/26. In its current form, the bill increases the minimum rental requirement to 90 days from 30 days for short-term rentals.
The hearing included hours of public testimony from nearly 200 people, in addition to hundreds of written testimonies, with a majority voicing their opposition to this measure. Thank you to many of you who submitted your own testimonies. A big shoutout to CAC Chair Dianne Willoughby and Vice-Chair Jennifer Andrews for patiently waiting hours for their turn to present oral testimony on behalf of HBR. KITV’s coverage of the hearing contained a short portion of Jennifer’s testimony expressing HBR’s position against the bill and noting the change in definition from 30 to 90 days.
You can view HBR’s submitted written testimony here.
HBR’S POSITION
HBR maintains its position that the minimum rental requirement for short-term rentals remains at 30 days, as Ordinance 19-18 currently allows.
HBR’s main concern is the housing issue. Short-term rental DOES NOT mean vacation rental. The Administration (Mayor, DPP, and Councilmembers) needs to understand the distinction between a short-term rental (greater than 30 but less than 180 days) and a vacation rental unit (for tourists, generally less than 30 days). Setting the minimum at 90 days will negatively impact numerous local residents whose reasons for renting less than 90 days are non-tourism related (e.g., home sellers/buyers renting until they close on a new property, families waiting for their home to complete construction or renovations, renting to a visiting professor or college student). Countless others such as military personnel looking for a home to buy, traveling nurses, and families from out of state taking care of loved ones will also be affected. Legal short-term rentals do not take away from the affordable housing supply but rather help fill a void in the housing market. The issue is the illegal weekly and nightly rentals that are coming and going and disturbing the community.
Based on our legal review and analysis of the bill, there are concerns about the retrospective laws and vested rights of owners whose properties were purchased prior to Bill 41. Passage of this bill will leave the City open to many lawsuits from owners who purchased their properties prior to Bill 41 being enacted and are currently able to legally rent their homes for 30 days or more. With Bill 41, they will no longer be able to do that, which represents a "taking" of their property rights and will result in legal challenges. In addition, Bill 41 includes the provision that an existing NUC property, when sold, would lose its NUC, which also represents a "taking" of property rights.
We believe the focus should be on the enforcement of illegal, less than 30-day short-term rentals. Ordinance 19-18 was supposed to address enforcement, yet the administrative rules to empower DPP to implement the Ordinance were never put in place. The Administration should focus on establishing the Admin Rules to enforce Ordinance 19-18 and allow time to show its effectiveness.
Simple solutions:
- Implement reasonable registration and fees for all rentals with nonconforming use certificates and 30 days or more to streamline enforcement
- Registration fees should be different for the 30-day+ rentals vs. the less than 30-day (vacation) rentals – those who bought a property that was legal for STRs are going to be impacted by the significant increase in fees
- Eliminate the ability to advertise weekly/nightly rates so they can enforce online
HBR is concerned that Bill 41, CD1, which is very complex, is being rushed through without giving sufficient time for prior policies to be properly implemented and ensuring that legal challenges will be avoided.
WHAT’S NEXT
- Bill 41, CD1 has been referred to the Zoning and Planning Committee – its next meeting is scheduled for February 10
- HBR and CAC to meet with DPP
- Call in to the Mayor
- Meet with Councilmembers again
We encourage our members and their clients to continue to submit testimony and reach out to their councilmembers to share their personal stories on how this bill will negatively impact them.
HBR and CAC continue to monitor this legislation. We will provide updates to our members as they are available.
