The Hawaii District Court is expected to demand that the Honolulu city government suspend the 90-day minimum short-term rental (vacation rental) bill.
On October 13, Judge Derek Watson issued a preliminary order banning the enforcement of the city’s Ordinance 22-7, which was due to take effect on October 23 this year.
Decree 22-7 (Proposition 41) contains the content to increase the current minimum number of short-term rentals of 30 days to 90 days.
In other words, once the law goes into effect, vacation rentals can only be operated for guests staying for more than 90 days.
The ruling is the result of a lawsuit filed in June by the Hawaii Legal Short-Term Rental Association (HILSTRA), a nonprofit organization in response to the city government’s ordinance.
HILSTRA maintains that Act 22-7 is unconstitutional because it violates the vested rights of property owners, such as ownership and rental, and violates state zoning laws.
In an email interview with Star Advertiser, HILSTRA President Andrea Grigore expressed his displeasure with the Hawaii District Court’s ruling, stating that Decree 22-7 was flawed from the start.
After the enforcement of Decree 22-7, the city government has set a grace period until April 21 next year so that vacation rental companies can make the necessary preparations to comply with the rules.
However, HILSTRA countered that even with a grace period, it could not provide sufficient relief for many jobs that depend on real estate rentals, such as cleaning, landscaping, real estate management, and reservation agency.
He also emphasized that millions of dollars are being generated from accommodation tax and general consumption tax from workers in this field.
Honolulu City Mayor Rick Blangiad expressed disappointment at the unconstitutional ruling, saying that the 90-day minimum limit was a way to curb illegal short-term rentals.
But Mayor Blangiade, who soon said he respected the court’s ruling, promised to study more closely what the city government could do to protect residential areas.
Dana Viola, director of the city government’s Office of Corporate Advisory (DCC), added that while the current 30-day minimum limit policy will be strongly implemented, what can be done legally to regulate illegal short-term rentals will be considered.
The ruling is “very significant” for the industry as it provides a way for short-term rentals to continue operating for guests who are staying for more than 30 days and less than 90 days.
North Shore real estate broker, Chun James, said he strongly opposes illegal short-term rentals, but said the city’s 90-day limit was excessive.
Honolulu’s Illegal Short-Term Rentals Vacation rental business has been the subject of heated debate over the past few years over displaced residents’ rights violations.
Illegal leasing reduces the availability of long-term rentals by deteriorating the atmosphere of residential areas, causing shortages of parking spaces and overcrowding.
Tourism industry groups such as the American Hotel and Accommodation Association (AHLA), Tourism Authority (HTA), Hawaii Hotels Association (HHA), and the Hawaii Accommodation and Tourism Association (HLTA), as well as local groups such as Thousand Friends and Save O’Ahu Neighborhood has expressed concerns about illegal short-term rental business.
Save O’ahu Neighborhood Director Larry Bartley expressed disappointment with the court’s decision and said he would continue to fight to curb illegal short-term rentals.
HTA chief executive John DePrice warned that the court’s decision could weaken the city’s ability to manage visitors and would pay more attention to crackdown on illegal short-term rentals.
Chuck Prantis, spokesman for local group Keepit Kailua, said that Act 22-7 is necessary because illegal short-term rentals are currently being practiced all over Oahu.
He also warned that residential areas in Kailua could be overrun with skyscrapers like Waikiki if he failed to properly control illegal short-term rentals.