Sep. 27—The rules for short-term rentals are looking at a drastic change—increasing the minimum number of days that a property can be rented without a special permit to 180 from 30—and runs counter to years of talks with homeowners and vacation rental companies.

The Planning Commission on Wednesday is scheduled to consider the new measure, which is intended to cut down on illegal short-term rentals. It would allow the current 808 legal bed-and-breakfast and transient vacation units to continue operating but would not allow any new short-term rental properties in residential areas.

New permits would be issued only in resort areas such as Kuilima, Ko Olina, Waikiki and Makaha. Changes also would require properties to display their certification registration number on all advertisements.

The measure also plans to charge bed-and-breakfasts and transient vacation units in residential areas at the B &B property tax rate, which is higher than the residential rate. The new nonconforming units would be taxed at the resort rate, which is even higher. Up to $3.12 million in real property taxes from the B &B, hotel and resort tax classifications would then be used to staff the city's Department of Planning and Permitting special short-term rental enforcement unit.

The City Council previously granted the DPP seven positions specifically for enforcement. However, the positions were not funded and went unfilled.

In 2019 then-Mayor Kirk Caldwell passed Ordinance 19-18—more commonly referred to as Bill 89—which kept the 30-day minimum for short-term rentals without a permit but included a lottery system to select 1, 700 Oahu homeowners to receive permits to rent their properties for fewer than 30 days.

During that time, Expedia Group signed a Memorandum of Understanding to help enforce the new rules, said Expedia Group Government Affairs Vice President Amanda Pedigo.

"We tried to step in and help with some of those implementation problems by saying, 'Hey, let us gather these TMK numbers from all of our owners and send that information to you, '" she said.

"Then working together on an ongoing basis, we can take down the bad guys and get rid of the illegal operators."

TMK numbers identify property in Hawaii, which Pedigo called a unique and helpful tool the company can use to help DPP with enforcement.

However, the measure never fully went into effect, and Mayor Rick Blangiardi's administration deemed the rules unenforceable.

Milo Spindt, broker in charge at Elite Pacific, a local property management company, asked why new rules are being considered before the current rules have been put into practice.

"The biggest issue that we have is, 'Hey, we just got done with this ... why are we rehashing this entirely, again, when the DPP has not gone through the effort of enforcing the law under Bill 89 ?'" he said.

"Our biggest challenge that we're really faced with is that we went through all this negotiation, we've done this all once before. And here we are again, and they're going back on all the things that were negotiated."

DPP Director Dean Uchida said the new rules are meant to address issues raised after the original ordinance passed.

"The proposed amendments to Ordinance 19-18 were a result of comments made during the administrative rules process, internal review of Ordinance 19-18 to address potential problems in the original bill, as well as a response to changes in the community as a result of the pandemic, " he said in an email.

The intent was to crack down on illegal short-term rentals. DPP estimates that short-term-rentals represent about 35 % of vacant housing and 5 % of the state's housing stock. It also estimates about 20, 000 illegal short-term rental units operate statewide.

However, Pedigo believes the new rules would punish landlords who follow the rules and rent their properties for over 30 days but far shorter than 180.

"It hurts the people who are trying to play by the rules, " she said.

"It impacts tax revenues that are generated by those good actors, " she said. "It dismantles the spirit of cooperation and collaboration that we have embraced on the island. And it does so in favor of protecting these large multinational hotel interests over the local vacation rental owners who live and work on the island."

When Kate Bliss and her husband were looking to buy their home in St. Louis Heights, they realized that even their combined incomes made it financially difficult.

"So we had rentals pretty much from the get-go that were 30-day minimums, " she said.

"This is our primary residence, " Bliss said. "So we were really afraid that if we had someone who was very disruptive on our property, or just decided they didn't want to pay bills, or they wanted to have parties all night, we wanted to be able to get them off of our property quickly."

Bliss and her family, which includes two daughters, typically rent rooms to travel nurses, people on fellowships or who have speaking engagements at the University of Hawaii. However, in the winter when family visits for a few months, there are no short-term renters.

The new rules would make that impossible, Bliss said.

"I don't think they really thought about ... what a deleterious effect they would have on people who rely on this, " she said.

"My husband and I can't afford our mortgage without renting these places out."

The newest iteration of the rules proposes to grant exemptions to the 180-day rule for temporary employees at health care facilities, full-time students, full-time remote workers, military personnel and homeowners in transition.

Each public hearing at the Planning Commission generated testimony from hundreds of people against the measure. The last hearing on the Caldwell administration's rules in April also saw hundreds of people testify in opposition.

Following a decision by the Planning Commission, the issue then goes to the City Council.