Allison Schaefers did a good job on a package of stories about Honolulu’s vacation rental industry featured in today’s Star-Advertiser.
It’s a politically loaded issue, since it’s a pocketbook issue both for the owners of thousands of unlicensed and illegal rental units, and for their neighbors who believe their enjoyment of their own homes is threatened by this underground commercialization of neighborhoods.
Schaefers presents data on the prevalence of illegal rentals by neighborhood, and additional info on the city’s meager enforcement efforts.
Here in Kaaawa, she found 35 vacation rentals that have advertised over the past year. I’ve previously mentioned several new homes that have been built and used from Day 1 as vacation rentals, flagrantly violating the city law. A list of legal nonconforming rentals contains only a single licensed unit in the neighborhood. Apparently that’s not an unusual ratio.
Complex issues are raised.
Do vacation rentals reduce the stock of available residential housing units, contributing to the island’s housing crisis?
Do the same vacation rentals push up rents overall or boost the cost of homes for all buyers?
How do tax revenues the city loses from transient vacation rentals compare to the tax revenues lost from other illegal rentals in single family homes?
Zoning regulations have a checkered and occasionally controversial history, and have been attacked as supporting residential segregation.
Here are a few interesting links.
“The Birth of Zoning Codes, a History,” Citylab.com
“Zoning in the United States,” Wikipedia
“One of the best ways to fight inequality in cities: zoning,” Washington Post
That latter column is pretty critical of residential zoning restrictions, seen as mechanisms for continued racial segregation.
For years, activists and researchers have known that restrictive zoning is among the most powerful forces behind racial and economic segregation in the country.
This is for two reasons. First, in many neighborhoods, zoning laws prevent the construction of low-cost housing by, for example, allowing only single-family homes instead of apartments. Second, zoning laws restrict the total amount of housing that can exist in any given area, which means that wherever well-to-do people decide to move, they will bid up the price of housing until it’s out of range of everyone else. Imagine, for example, if there were a law that only 1,000 cars could be sold per year in all of New York. Those 1,000 cars would go to whoever could pay the most money for them, and chances are you and everyone you know would be out of luck.
But that’s a somewhat different question from the impact of commercialization in residential neighborhoods via vacation rentals.
And short-term vacation rentals are causing controversy across the country. I did a very cursory search this morning and found items from many different areas.
“Burbank City Council approves housing rules banning boarding homes, short-term rentals,” The Burbank Leader, 6-28-2014
“Residents, business owners hire lawyer as town crafts code on short-term rentals,” SouthHoldLocal.com, 12-15-2014
“Short-term Vacation Rentals in Residential Zones in Pacific Beach?” SavePB.org
“New Orleans confronts unlicensed short-term rentals: to legalize or keep ban?” NOLA.com, 6-3-2014 (includes links to other stories in series)
“In Wilkinson v. Chiwawa Communities Association, the Washington Supreme Court Protects Owners Ability to Use Their Homes As Vacation Rentals,” vrmawa.com (read the court decision here)
“Over Saturation of VRs Deteriorate Residential Neighborhoods and Reduce Housing for Locals,” BendVoice.org
Anyway, you get the idea.
Reactions welcome.
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Short term vacation rentals, legal and illegal, are a annoying problem here on Maui as well. Noise and extra traffic stand out in particular.
Schaefer’s online package today also includes a novel game for readers to play as a County building inspector. Presumably to demonstrate how difficult enforcement can be; but also serves to demonstrate how unimaginative the enforcement is.
http://data.staradvertiser.com/rentals/rentalgame.html
What I never understand is why those who oppose vacation rentals do not take more direct action. They could call it Guerrilla Building Inspection. Form a hui, pose as customers in distant neighborhoods (North Shore member books a stay in Kailua, and vice versa, akin to Hitchcock’s “Strangers on a Train”), gather all the necessary evidence to hand the inspector strong cases, and/or file qui tam lawsuits if the inspectors don’t or won’t pursue them.
Heck, if the issue is as widespread as Ian’s cursory search suggests, then the hui could even go nationwide. Would be difficult for the landlords to know which would-be “guests” are out to get them…
Some years back Angie Larson, lobbyist for the illegals quoted in this morning’s paper, wrote an op ed piece claiming that tourists were preferable as “renters” than locals who came with kids to “over crowd” Kailua schools. This at a time low enrollment brought talk of school mergers. There is no doubt that VCRs and B&Bs have priced the school teachers, fire fighters and police who serve Kailua out of the rental market. Paying GETs doesn’t qualify as meeting the tax obligations of this illegal trade.
Glad to read that Ikaika Anderson sees the wisdom of opposing the “Grandfathering” campaign premised on the basis that City Hall has never had the will to address the issue for lo these many years so let’s forgive and forget when Kailua was a quiet residential community. Today we have traffic grid lock and are paying the price for developing into an unplanned resort community because we let our zoning regulations go by the boards because City Fathers failed us.
Agreed this is a complex issue that is pitting neighbor against neighbor. Ian, you noted lots of places where there’s controversy, but did you come across any potential solutions that might work here?
Best way to a solution:
Avoid yet another foolish pendulum swing; ie, jump from having too many tourists to a total ban on all B&Bs.
Why does real change take so long? Too many issues are decided on an all-or-nothing basis of emotion vs. sensibility.
New laws are pointless if they are not enforced. And a legal system based on ridiculous civil lawsuits is random justice, not real justice.
It’s an issue with Senator Riviere. Curious to see what’s going to happen.
I don’t see the complexity. One group flaunts the law and makes money doing so.
I live on Malaekahana Bay out of 33 homes 13 are actively rented. There are 3 licensed vacation rentals and 10 unlicensed rentals (as advertised on VRBO) . Interesting side note is that only 1 of the 2 licensed VR’s advertises on VRBO.com. I have lived here for the past 26 years and pretty much seen it all. I am also a licensed Real Estate agent. My solution would key in on affordability. Right now renting a home on the beach with a full kitchen and 3 bedrooms for $300 to $400 a night is a deal!! If the same home was $600 to a $1,000 a night and you had to rent it for a 7 day period, that would make renters think about a hotel.
I did the same thing when my mother and I went to Oregon for a family reunion. I researched on VRBO. com and found a lovely home on the Rouge River for $125 a night. Better than a motel room in Medford. If that same home were $200 a night we would have ended up in the motel.
I hate to say that Tax increases is a most effective way to making owners increase their fees. The City and County already started it by increasing non-owner occupied homes, assessed at over $1MM from $3.50 (per $1,000 of assessed value) to $6.00 (per $1,000 of assessed value). My neighbor who has a licensed vacation rental raised their rates from $500 a night to $550 a night. They also stipulate that you must rent for a 7 day period. They are local owners and very good neighbors. Mostly tourists rent their home and never any loud or noisy parties. They do not advertise and it is all word of mouth.
I noticed in the news article that Kahuku had 263 vacation rentals. The author must have included Kuilima East and West in her numbers. I remember that in the late 80’s the owners of Kuilima East and West had their zoning changed from Resort to Residential, because they did not want to pay Resort taxes.
Ikaika Andersen had a quote in one if the earlier articles where he repeats his frequent claim that some home owners NEED to illegally rent their places to tourists to make ends meet and pay taxes. I call bullshit on that claim and am curious what other illegal activities he will support for struggling home owners that need to pay a mortgage. Is he down with me selling drugs, running a hostel, or a brothel? Gotta pay the bills yo!! His logic is completely perverse and I hope he soon recognizes it as such rather than keep sounding like a fool.
I think Anderson is referring to B&B’s (which are owner-occupied and rent 1 or 2 rooms), not vacation rentals.
Personally, I would agree that many – if not most – B&B’s are operated by retirees trying to earn extra income. I’ve stayed in B&B’s on the outer islands and on the mainland and every one was operated by a retiree.
How about the corporate “surf houses” owned by surf companies like Volcom at Pipeline. Are these utilized as vacation rentals when the pro surfers are not staying there? How many unrelated people are staying in those homes at any given time?
The Star-Advertiser and Civil Beat articles would have been improved by visuals like maps/aerial photos showing streets on the North Shore or in Kailua with high percentages of vacation rentals …
Maybe this issue pits neighbor against neighbor for B&Bs, but not for the other rentals in which the owner/renter does not live in the property.
I’m glad Schaefers pointed out many of the aspects of this issue, e.g., the impact on the overall housing market. The state and, especially, the county need to confront this issue before trying to address things like affordable housing and expanding permissibility of ohana units.