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Honolulu Mayor Signs Law Further Restricting Vacation Rentals

On April 26, Honolulu Mayor Rick Blangiardi signed into law Council Bill 41. The law, which now goes into effect on October 23rd, 2022 for properties on Oahu, lengthens the minimum stay for some rentals from the current 30 days, to 90 days. Short-term rentals will be prohibited except in resort-zoned areas which are primarily in Waikiki, and specifically apartment-zoned parts of Ko Olina, Turtle Bay, and Makaha. (For Waikiki, that area is everything below Kūhiō Avenue plus the Waikiki Banyan and the Aston Waikiki Sunset, two condo properties above Kūhiō managed by Aqua Aston Hotels).

New Fines and Restrictions for Vacation Rentals

Bill 41 adds fines, restrictions, and new procedures around parking, registration, and enforcement. Owner fines for violating the law will be a minimum of $1,000 per day, up to a maximum of $10,000 per day; hosting platforms and booking services will also face stiff penalties for advertising illegal rentals. A new enforcement branch is to be created within the City and County of Honolulu’s Department of Planning and Permitting, staffed with seven workers, with the ability for citizens to file complaints for nonconforming units.

NUCs, or properties that have an existing non-conforming use certificate, will be allowed to do daily rentals. These certificates will now have to be renewed annually during a specific window of time and at a cost of $500. If the owner lets the certificate lapse, it can never be reactivated.

Uncertainty Around the Bill’s Rationale

Critics of the bill say that it unfairly favors the hotel industry and argued that the City never tried to enforce an earlier measure, Bill 89 of 2019. With some areas of Ko Olina that were previously part of the resort-zoned carve out that have now been excluded in the current approved bill, there is some uncertainty around the rationale, and whether these boundaries will shift in future amendments to the law. Council Chair Tommy Waters said there was a chance such details may be revisited.

The information above is my understanding of the new law, and is deemed reliable but not guaranteed. For more context and history behind this bill, see my previous blog post on this topic.

With this complex and quickly shifting landscape for vacation rentals, you may need an expert guide. For help navigating which properties may be better short-term investments, please contact me, Cathy Possedi.

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