New Ordinance on Short-term Rentals
In response to many of our guests inquiring about the new Hawai’i policies to regulate vacation rentals. Provided below is an overview of Bill 89 and how it might impact your vacation.
Why Bill 89? Vacation rental permits have not been available since 1989, therefore the vast majority of TVUs and B&Bs have not been regulated by the City and Council permits. According to the City and Council Bill 89 seeks to balance the benefits of STRs for hosts and guests with the desire to keep residential neighborhoods from being overrun by STRs. User friendly platforms such as AirBNB have lead to an increase in owner-operated rentals and has drawn attention to this issue which coincides with the lack of affordable housing available for residents of O‘ahu. Remarkably, after years of debate and testimony from both sides, City and Council unanimously voted to pass Bill 89, introduced by Mayor Kirk Caldwell.
Important Takeaways from Bill 89
The City Council approved Bill 89 CD2 on June 17th and was signed (Ordinance 19-18) into office by Mayor Kirk Caldwell on June 25th 2019.
Ordinance 19-18: https://bit.ly/2IS637x
- Bill 89 went into effect as of August 1st, 2019 for the island of O‘ahu. Immediately the new law was enforced carrying out new advertising restrictions. Merely advertising for illegal short-term rentals will result in a violation and hefty fines.
- Effective October 1st, 2020 permits will be issued to B&Bs outside of the resort district. There will only be a total of 1,699 permits issued and homeowners will be subjected to an application approval process. Permits will only be available to homeowners living in the residence, renting a maximum of 2 rooms. Whole homes will not be eligible for permits.
Breakdown of Bill 89
Ordinance 19-18 prohibits short term rentals that are outside the resort district unless you have a Non-Conforming Use Certificate (NUC). Resort districts are limited to certain areas within Kāhala, Waikīkī, Ko Olina, Lā‘ie, Mākaha, and Kuilima.
Short term rentals (STRs) are residential homes or condos that are rented out for less than 30-consecutive days per tenant. This includes Bed and Breakfast homes (B&Bs). City and Council defines B&Bs as short-term rentals with the homeowner or permanent resident present during the guest’s stay. Short-term rentals also includes Transient Vacation Units (TVUs) which are transient vacation rentals without the homeowner residing in the same dwelling as guests. TVU rentals are commonly known as whole home or “unhosted” rentals.
With this new Ordinance short-term rentals are not only prohibited outside the resort district without a NUC, but are now restricted to rental terms no less than 30 consecutive days per tenant. Therefore, the minimum allowable rental is 30 days. TVUs or “unhosted” TVUs are prohibited in non-resort areas regardless if you possess a NUC or not. That being said, a limited amount of B&Bs are allowed in non-resort areas under the new registration process and annual renewal requirements. However, B&Bs are prohibited from renting more than two rooms or exceeding a max occupancy of 4 guests at any given time. In addition, the homeowner must occupy the same dwelling as guests in order to qualify as a short-term vacation rental.
New B&Bs are not allowed to exist in the North Shore area due to the North Shore Sustainable Communities Plan, See link: http://bit.ly/2Y4QpLg
No more than 0.5% of the total number of dwelling units can be used as B&Bs for each regional development plan area (DPA). Please see below the limits by area:
Ordinance 19-18 introduces serious penalties and fines for illegally operating short-term rentals or advertising unpermitted short-term rentals for less than 30 days. Penalties may apply to short term rentals if they are not in compliance with zoning regulations. However, the ordinance does not prohibit the use of advertising daily rates as long as you specify that your minimum rental period is 30 days. Those with NUCs must also include their NUC number in all advertisements. Additionally, hosting platforms will be regulated requiring monthly reports to be filed with the Department of Planning and Permitting (DPP) in which that information will be shared with City Council.
Please contact Robin at robin(at)hawaiianvillarentals(dotted)com if you have any questions on how these new rules under Bill 89 might affect your Hawai’i vacation!
For More Information on Bill 89
To ensure you are up to speed on the most current revisions and guidance from the DPP regarding Ordinance 19-18, Please visit the sites below.
Contact the Department of Planning and Permitting
General Zoning Information: 768-8252
Advertising Restrictions: 768-8127
Registration Process: 768-8127
Make a complaint: 768-8127
Public Information Officer: 768-8284