Monday, August 8, 2011

Vacation Homes For Rent on Oahu Under Siege

Conflict Brewing in Paradise
Photo by Dianne Smith  

People traveling to Hawaii may be unaware of a serious brouhaha developing on Oahu over mom and pop small businesses offering condos and bed and breakfast accommodations to tourists. Honolulu Mayor Carlisle is listening to a small but vocal minority of residents who want to corral visitors only into resort areas like Waikiki, Turtle Bay on the North Shore, and Ko'olina, prohibiting them from staying almost anywhere else on the island. However, many vacationers prefer to travel to these types of places, and are not part of the hotel industry's clientele. Ground zero for the controversy is the upscale city of Kailua on the windward side of Oahu, where President Obama chooses to stay when he visits Hawaii.

Vacation Rentals and Bed and Breakfasts on Oahu

Honolulu Mayor Peter Carlisle is requesting a Bill to Amend #21, of the Revised Ordinances of Honolulu 1990, as Amended Relating to the Regulation of Certain Visitor Accommodations. This proposed amendment is an enforcement only bill that aims to close all Bed and Breakfast and Transient Vacation rentals on the entire island of Oahu. A Public Hearing will be held August 10, 2011 to discuss the matter. For those who wish to attend or testify, the hearing will be held at Mission Memorial Hearings Room,  550 South King Street, Honolulu, Oahu, but anyone not in attendance who would like to air an opinion can call Hawaii's officials:

  • Honolulu Mayor Peter Carlisle: (808)768-4141
  • David Tanoue, Dept. of Planning and Permitting: (808)768-8000
  • Nestor Garcia (808)768-5009
  • Ann Kobayashi (808)768-5005
  • Breene Harimoto (808)768-5008
  • Romy Cachola (808)768-5007
  • Ikaika Anderson (808)768-5003
  • Ernest Martin (808)768-5002
  • Tom Berg (808)768-5001
  • Tuisi Gabbard (808)768-5006
  • Stanley Chong (808)768-5004

The Bill to Amend Chapter 21 includes fines up to $1,000 per day for owners of the illegal vacation rentals, which is defined as any place rented for less than thirty days without a permit. Since almost no new permits have been issued in the past twenty years despite the upswing in visitors, many vacation rental homeowners are at risk. Since 1989, when 2,376 certificates were issued for Transient Vacation Units and Bed & Breakfasts, Oahu has lost on average twenty per year, according to the Department of Planning and Permitting. Only 875 remain of the legal vacation rentals, and only 200 of them are located outside of Waikiki.

Since there is no legal way of allowing Oahu small business owners to fill the void, they operate underground while crying out for more legal permits and the regulation of their industry. Angie Larson, president of the Hawaii Vacation Rentals Owners Association, said in the Honolulu Advertiser that vacation rental owners are eager to work with the council and community to find a solution that works for everyone. She recently said, "Why are we spending so many tax dollars on a subject that can be easily fixed with reasonable rules and regulations?"

Stu Simmons, resident of Kailua and an advocate for the bill, denies that noise and parking issues are the primary problems with these businesses. In a response to Honolulu's “Key Planning Issues” report of June 2011, he wrote in an e-mail to Oahu government officials that neighborhood organizations "Keep it Kailua and Save Oahu’s Neighborhoods have repeatedly stated they oppose these businesses being located in residential zoning because they reduce the inventory of long-term housing for local residents and adversely alter the character and social fabric of residential neighborhoods and communities. They also take revenue away from properly licensed hotels in properly zoned areas such as Waikiki, and compromise neighborhood security watch programs."

Oahu Condo Rentals

However, visitors that stay in the condos and B&B's generally do not use hotels. If their first choice of accommodation is taken away, they are unlikely to accept a second choice. They will simply vacation elsewhere, and the revenue they generate will be lost to Oahu. One concerned business owner is Gail Allen of Island Treasures Art Gallery, who has written an eloquent letter for the Planning Commission Hearing scheduled for August 10, 2011:
Chair Kim and Members of the Planning Commission:
My name is Gail Allen and I am the owner and President of Island Treasures Art Gallery, Inc. and Kailua Beach Walk, Inc. in Kailua, Oahu. I have been a business owner there for over 15 years and prior to that was the owner of Maui Clothing Co. Inc. which is 30 stores now owned by my daughters. Between the three corporations we employee over 300 employees and generate sales and tax revenue for the State of Hawaii. We are in the tourist resort business selling clothing and Hawaiian art and gifts on Lanai, Kauai, Big Island, Oahu, and Maui. I was the recipient of the Retailer of the Year Award in 1996 for Bank of Hawaii and now nominated again this year by FHB Bank. When I first opened in Kailua, Oahu, in 1996, it was a sleepy little town with very little tourism and we were the first retail gift gallery with Island Treasures. Most residents had to go over the Pali to buy any gift items or clothing that they needed and when we opened people were so happy to see us come to Kailua.
The town grew over the years and many small boutiques opened to service the community and tourists started coming to visit Kailua. There were only a few legal bed and breakfast rentals, not enough to accommodate all those who would love to experience visiting their families, returning to Kailua from their childhood, visiting military personal returning from war, and generally loving the beaches and paddling that Kailua has to offer. These tourists are not your normal Waikiki tourist, they are families visiting relatives and they would never stay in Waikiki or a big resort hotel. They are decent, normal families looking for the safe family experience that Kailua has to offer its guest visitors. They not only shop and eat in our restaurants, but the owners of such house rentals shop to buy new home accessories at our stores to keep their homes looking new and nice for their guests. 
It would be an economic disaster to destroy the guest industry that has been there for 20 years. It has enabled our town to grow at a strong economic rate even in light of the recession that we are experiencing now. Many homeowners are upside down on their mortgages in Kailua and would be in foreclosure if not for the bed and breakfast economy. The State and Federal Governments are experiencing a substantial tax base increase from the rental industry and from the many business that have recently been developed in our area due to increased tourism. Thousands of employees are hired by these rentals to maintain Kailua properties; maids, gardeners, pool services, and employees hired to work in the stores and restaurants. 
Do we want to see Kailua roll backward into the 90’s where only a few shops existed for our community, where there were no restaurants and boutiques to dine and buy creative and unique merchandise? Do we want to cut the government out of its tax base and have to lay off more employees to increase unemployment? The vocal minority movement is not the majority of persons voting in our community. They are not the working class dependent on jobs created by tourism. Many are retirees who have time on their hands to create turmoil in the community. They are against any kind of busing of Japanese tourists into our area to increase business. They don’t realize that the State is dependent on the tourist economy throughout Hawaii. We need to protect that tourism to save our businesses.
I say there must be a better solution than ending the home rental business in Kailua! I vote no on Mayor Carlisle's new bill to amend Chapter 21, enforcement only is premature!
Why are we spending so much of our taxpayers dollars on this issue in an economic environment of a recession to fight the actual persons and business who are making money for the State?
Why not legalize and regulate such vacation rentals as Maui has been successful in doing to increase tourism and create more jobs and economic stability in our State? A good bill would address both sides and create a compromise instead of pinning neighbors against neighbors and erasing the business community off the map financially!
I would like to speak before the community at the hearing on Wed. August 10,2011 on behalf of my businesses in Kailua and the many customers and employees in the community.
Gail Allen 
Island Treasures Art Gallery
Kailua, HI 96734
The controversy rages on Oahu, but the fallout will be felt by the multitude of visitors from the mainland United States and other countries. Their options may become severely curtailed, making a visit to paradise a dream instead of reality.

City and County of Honolulu Department of Planning and Permitting
The Honolulu Advertiser
Hawaii Vacation Rentals Owners Association
Kailua Chamber of Commerce

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