With support from the Honolulu City Council, Mayor Kirk Caldwell signed Bill 89 into law, becoming Ordinance 19-18, to now impose strict enforcement of regulations affecting Vacation Rentals on Oahu. This enforcement affects long-term how and where Transient Vacation Units (TVU's) and Bed & Breakfasts (B&B's) can legally operate. Read Honolulu Ordinance 19-18 in its entirety and Ordinance 19-18 Frequently Asked Questions for a better understanding on how this may potentially affect you, whether as a current owner of Oahu real estate or a prospective Buyer.
Note: Visit our Oahu Vacation Rentals page to view condos currently for sale and check out a Oahu Map of Properties Eligible for Vacation Rentals for those holding NCU's.
To understand the context, it is worth noting that in the past few years, many residents have felt that illegal / un-permitted short-term rentals were a detriment to the local community by not serving long-term residents and by adding transient traffic to an infrastructure not capable of handling the additional load. The rules have been in existence for over 30 years but because so many have chosen to break them (with no repercussion), it has led to lawmakers putting this in place.
As a preface, a few key notes and acronyms:
NUC: Non-Conforming Use Certificates which effectively allow a property to be used in a manner that is NOT consistent with its original intended use / zoning. In essence, permission to operate in a manner that otherwise is not allowed.
B&B: Bed & Breakfast, a Residential property where the Owner and/or his representative hosts guests at the same dwelling.
TVU – Transient Vacation Units, a residential property where the Owner is NOT present at the time of guests being in the unit.
DPP – Department of Planning and Permitting, the arm of the government tasked with enforcing Ordinance 19-18. Contact the DPP at 808-768-8252 to clarify any information.
Properties are allowed to operate as short-term rentals IF:
* The property is located in a 'Resort / Resort Mixed Use' zone AND the AOAO of the property allows such rentals - in some cases, although the property is in a 'Resort' zone, the HOA House Rules may prohibit or limit rentals. Do NOT make an assumption that if a property is zoned Resort or Resort Mixed Used that short-term rentals are allowed, contact us to confirm. Specifically, some of the areas within Ko Olina, Waikiki and Turtle Bay.
* The condominium complex is outside of the Resort zoned-area but operates as a hotel with on-site services and the property is specifically exempt from requiring owners to have a NUC. In essence, the complex is 'grandfathered' by the County to operate as such even though the zoning is not Resort / Resort Mixed.
* The property is located outside of a Resort zoned-area but the individual unit has a valid Non-Conforming Use Certificate that specifically enables the unit owner to use the unit for short-term rentals.
Enforcement - The burden of proof has shifted significantly, whereas previously the DPP had to compile a great deal of mounting evidence (often times to an extent that is not feasible or practical), now merely advertising a property for short-term rental on a portal is sufficient to trigger fines. The DPP started enforcing Ordinance 19-18 effectively as of August 1st, 2019 and anecdotally it is being felt extensively.
Bed and Breakfast - Starting on October 1st, 2020, there will be an application process to issue up to 1,699 permits for B&B's outside of the resort areas. Specific details as to how the process will be carried out are still very vague, but we will post updates as information is available. Keep in mind, these permits will be for owner-host vacation rentals. There will be allowances per area as illustrated on the map below.
Whether one falls on the side of this Ordinance being anti-tourism or pro-community, what can be reasonably agreed is that this is having a major effect on the Oahu real estate market. We're already seeing some of those prospective Buyers looking at viable options on Maui, Kauai, and Big Island. For more details on this Ordinance and how it is affecting the Oahu real estate market, contact us. Take a moment and view Maui Condos that Allow Vacation Rentals page for a full list of all inventory currently available on the Valley Isle. For Kauai and Big Island, contact us as well.
Specializing in Makena and Wailea real estate, Alex Cortez is fully dedicated to representing his clients ethically and diligently. Contact him at 808.385.5034 or Alex@MauiRealEstateSearch.com for more information.