Jack Tyrrell specializes in Kakaako, Honolulu, Hawaii luxury condo projects.
Photo:  Honolulu Civil Beat.  Honolulu Mayor Kirk Caldwell signs Bill 89 CD2 into law on Tuesday, June 25, 2019.

Photo: Honolulu Civil Beat. Honolulu Mayor Kirk Caldwell signs Bill 89 CD2 into law on Tuesday, June 25, 2019.

Bill 89 CD2 regulating short-term rentals has been signed into law by Mayor Kirk Caldwell on Tuesday, June 25, 2019. Bill 89 CD2 was adopted by City Council on Monday, June 17.

From Hawaii News Now,

“Mayor Kirk Caldwell signed a bill into law on Tuesday, June 25, 2019, that will enact some of the toughest new regulations for Oahu’s vacation rental industry in nearly 40 years.

In a press conference Tuesday afternoon, Caldwell announced that he was putting his signature to paper on Bill 89, which allows permits to be issued for up to 1,715 owner-occupied bed-and-breakfast rentals. The measure was passed unanimously by the Honolulu City Council last week.

Currently, there are 770 legal short-term rentals licensed on Oahu, but estimates put the number of illegal vacation rentals from 8,000 to 20,000.

Rentals in resort areas, including Waikiki, Ko Olina and Turtle Bay, are exempt from the new law.

“Everything else is illegal,” Caldwell said.”

The new law’s main points are as follows:

  • Allows a limited number of new Bed and Breakfast Homes (B&B) in non-resort area under a new registration process, with annual renewal required.

  • Continues to prohibit Transient Vacation Units, or “unhosted” rentals, in non-resort areas, unless the dwelling has a Nonconforming Use Certificate (NUC).

  • Regulates hosting platforms, such as Expedia or Airbnb, requiring monthly reports to be filed with the Department of Planning and Permitting, which will share the information with City Council.

  • Makes illegal any form of advertising short-term rentals which are not in compliance with zoning regulations as provided in Bill 89.

So, what does this mean from a regulation standpoint? Honolulu’s Department of Planning and Permitting (DPP) has put together a FAQ sheet for your reference. Please read the entire sheet. Some highlights:

Advertising:

  • If you own an unhosted, “whole house” or Transiet Vacation Unit and pay taxes, you can only continue to advertise online (including on platforms like Airbnb and VRBO) and in the local newspaper if your dwelling is located in a resort district or you have a Non-Conforming Use Certificate.

  • Enforcement on advertising restrictions begins August 1, 2019.

  • Owners of the property involved in illegal advertising will be notified, and if the advertisement is taken down in 7 days, no fine will be imposed for a first offense. If not taken down within this deadline, fines of between $1,000 and $10,000 can be imposed for each day the advertisement remains on display.

  • If the management company for your property places an illegal ad, they company may be cited; however, “the burden of proof is on the owner to establish that the property is not being used as a B&B home or Transiet Vacation Unit or that the advertisement was placed without the property owner’s knowledge or consent” (Bill 89 CD2).

Registration of New B&Bs:

  • This law does not apply to rentals of 30 days or more.

  • Registration for a Bed and Breakfast Home (B&B) in non-resort areas will begin no sooner than October 1, 2020. DPP will spend the next year developing specific procedures, adopting new rules, and creating software to help with enforcement and the registration process. We will keep you updated.

Other Requirements:

  • Density Limit: No more than 907 dwelling units in the Primary Urban Center (where Kakaako/Ala Moana are located) are allowed to be permitted as B&Bs.

  • Condominium Limit. Up to 50% of units in a condominium building may be allowed a B&B, subject to AOAO approval.

  • There is no provision that guarantees you will receive a registration number; they will be given on a first-come, first-served basis or by lottery.

  • You may not advertise and operate a short-term rental until you have been issued a registration number by DPP.

More Information:

  • Refer to the Department’s website: honoluludpp.org

  • Email the Department: info@honoluludpp.org

  • Call the Department:

    • Advertising Restrictions: 768-8127

    • Registration Process: 768-8127

    • General Zoning Information: 768-8252

    • Make a complaint: 768-8127

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