On Tuesday, Honolulu Mayor Kirk Caldwell signed Bill 89 into law, bringing sweeping reform to the way vacation rental properties operate in east Oahu.
Calling the bill a "historic signing", Mayor Caldwell claims the bill a "huge victory" after outcry from Honolulu communities.
Bill 89 passed through the Honolulu City Council with a 9 to 0 approval vote before landing on the Mayor's desk. An additional 1,700 vacation rental permits are slated to be up for grabs some time in 2020 - the first time such licenses have been offered since 1989. Vacation rental properties operating without a permit may be subject to a fine of up to $10,000.
“We want to make sure that people come into compliance, and that’s why the fines are where they are...”
Under previous law, offenders would have needed to be caught in the act of operating an illegal vacation rental. With Bill 89, offenders may be cited for simply advertising the properties online.
With so many foreign investors seeking vacation rental properties that generate rental income, the impacts on the market may be far-reaching. We will likely see both an increase in long-term rentals and sales inventory as investors scramble to adjust to the new ruling.