It’s tricky to unravel the legality of unlicensed short-term vacation rentals

It is definitely wet in Kaaawa this morning. Checking the traffic cams, all of Oahu is pretty much getting soaked.

But although its raining, there isn’t more than a hint of any wind. So we decided the walk to the beach would proceed as usual. It was still dark when we left the house at about 6:30. Unfortunately, too dark to see puddles until it was too late.

It had slowed to a light mist by the time we got to the beach. And we just hoped that bank of clouds offshore was heading in the other direction.


A couple of friends stopped us on the beach yesterday morning and asked if we’ve ever checked out vacation rentals in Kaaawa.

“You’ll be surprised to see how many there are!” Jeff exclaimed.

So this morning I checked, the “vacation rental by owner” website, and searched for “Kaaawa.”

It yielded a list of 26 vacation rentals with photos, ranging from $130 to $1,200 per night! A few are advertised for long-term rentals, which wouldn’t raise any legal questions, but others advertise minimum rentals of from 2-7 days.

It’s obvious that some of these are neither licensed vacation rentals nor grandfathered in, such as the new home built across from the beach and offered at rates up to $900 per day depending on occupancy, time of year, and length of stay. [An earlier error put the rate at $900 per month…it’s just so hard to wrap the old brain around $900 per day!]

But are these rentals legal? That’s where it gets very tricky. As far as I can see, the city doesn’t make readily available a list of legal and licensed vacation rentals. So figuring out whether a particular rental unit is legal or not isn’t straight forward.

The best description I’ve seem of the situation appeared on attorney Robert Thomas’ Inverse Condemnation blog back at the beginning of 2011, in response to news accounts questioning whether the Kailua home used by President Obama during his island visits is a legal vacation rental.

Thomas quotes from an statement attached to a ruling by the Honolulu Zoning Board of Appeals.

The Director interprets the LUO [Land Use Ordinance] to preclude the occupancy of a residential dwelling for less than thirty days when the property owner is receiving some sort of compensation. Because Petitioners choose to receive compensation from others for occupancy of their property, they must comply with the minimum thirty days. Thus, the LUO allows a land owner to rent their property for thirty (30) day blocks, and theoretically, may rent their property to separate individuals or party twelve times per year. The Director further interprets the LUO as not requiring that those renting for thirty (30) days be required to actually occupy the dwelling for the full thirty (30) days. Because there is no way of forcing a person or party to stay the full thirty (30) days, the Director’s interpretation is that no other person or party occupy the property for that same thirty day.

The bottom line appears to be a vacation unit can be rented just once in a 30-day period, even for less than the full 30-days, and if no other person–including the owner, family, or friends–use the unit during the same 30 day period, it’s a legal rental.

Legal if the owner pays taxes on any rental income, including the transient accommodations and general excise taxes.

This obviously makes enforcement an almost impossible task for the city, absent complaints from neighbors accompanied by evidence of multiple rentals within the same 30 days.

So is the city’s ban really a ban?

10 responses to “It’s tricky to unravel the legality of unlicensed short-term vacation rentals

  1. Do not forget to mention Joan Conrow’s blog KauaiEclectic, with its very thorough “Abuse Chronicles: TVRs Gone Wild”.

    Small beach-front homes on Kauai have been slowly transformed into single-family hotels, and the county turns a blind eye to what seems to be code violations.

    However, if I were a county official, I am sure that I would do the same. TVRs are the new foundation of Kauai’s economy. It’s that simple.

  2. How about all those b&bs operated by those who claim legality on the basis that they took out a gross excise tax license!

  3. Unfettered expansion of TVRs are a threat to communities as they take away housing opportunities for local residents. Communities with a high number of TVR units become transient communities and lose the feeling of community. No community – no aloha!

  4. Carl C. Christensen

    Can’t the City compare the list of entities paying the TAT with the list of LEGAL TVRs and inquire into the status of any that are on one but not the other of these lists? And, of course, the State would have a very legitimate interest in ferreting out any illegal (or legal) TVRs that are NOT paying the TAT. A little enforcement might be in order here.

    • There are many ways that the government could ferret out the illegal TVRs but my opinion is that they don’t want to. Think of the number of rooms/beds which go off line if all the illegals were shut down and the hit to the industry. There are many people who don’t want to stay in Waikiki. With Waikiki rooms averaging something north of $300 per night, if you have a family or a group of people $1000 plus per day for a TVR doesn’t sound bad.

  5. The City enforces what it likes. Laws are a start, and are necessary but not sufficient to fix a problem. Take red-light running, or failing to stop on a right turn or yielding to pedestrians in crosswalks– these traffic laws and the TVR issue are just examples.

    Perhaps other cities and states are the same, but if citizens are concerned (and perhaps they are not), they need to think of how to get administrative bodies to enforce laws passed by legislatures.

    • or getting uninsured/unlicensed drivers off the roads…

    • “The City” would be who exactly, Larry? That is a broad brush for the actions of 8,000 individuals.
      The Fire Prevention Bureau comes and inspects when somebody calls and writes up the owner if they are not following the Fire Code. Do you have evidence that they pick an choose what elements of the Fire Code they enforce?

      Code Compliance Branch at the Department of Planning and Permitting, in a similar manner, sends inspectors to check on complaints about violations of the laws regarding transient visitor units.

      They do not pick and choose which laws to enforce, but as Ian indicated, proving a violation under the existing law is not a slam dunk proposition.

      It is easy to assume corruption or indifference but if you don’t have direct experience or proof, you are just committing slander.

    • And another alternative that you might consider, Larry, is to think about how to get legislatures to pass enforceable laws or to fund the staffing needed to enforce the laws as written.

  6. Constantinos S. Papacostas

    A bit off topic, but I cannot resist sharing with the readers of this blog that when we at the UH Dept. of Civil and Environmental Engineering were assisting the City in the mid-1990s (and later the Hawaii Department of Transportation) to display their traffic camera feeds on the web, we had not anticipated the many uses that people found for them, including to check the weather as Ian has done today!

    As communications guru Marshall McLuhan put it, “The medium IS the message.”

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