The City Council has judiciously undertaken the process of crafting a solution for the issue of unlicensed vacation rentals and bed-and-breakfasts. This solution, when finalized, will help strike a much-needed balance between the economic benefits that rentals and B&Bs bring and sustaining the character of residential neighborhoods.

Vacation rentals are homes, often supervised by a property manager, that are rented to visitors for less than 30 days. B&Bs observe the same 30-day rental limit, but in contrast, the owner lives on the property. There are an estimated 2,100 of these rental units on O'ahu, with vacation rentals in the overwhelming majority. Many rentals and B&Bs are unlicensed, since the city stopped issuing permits in 1989.

Yet since then hundreds of new vacation rentals and B&Bs have opened their doors and welcomed visitors who seek alternatives to the conventional resort experience. In this way, rentals and B&Bs contribute to the diversification of our all-important visitor industry, keeping O'ahu competitive with other destinations that serve broader visitor markets on the Mainland and internationally — especially in Europe. Additionally, these rental units benefit areas on the island that have visitor attractions but lack a significant hotel presence.

For example, each winter a universe of professional and amateur surfers, their families and friends and spectators flock to the North Shore for its towering, world-famous waves. According to news stories, just one event — the Triple Crown of Surfing — brings an estimated $7 million into the North Shore.

Many of the surfers and surf fans coming for the Triple Crown and other events over the three-month surf season stay at vacation rentals and B&Bs, which are user-appropriate lodging for the purpose. For these large-scale events, existing hotels in the area do not have sufficient rooms to accommodate the sheer number of visitors attending, nor could the highways to and from the North Shore further accommodate the resultant traffic were these visitors to stay in Waikiki.

The North Shore visitors also bring their spending power with them. They eat out and shop on the North Shore, supporting any number of small businesses, which in turn provide jobs in the area.

It is difficult to quantify this effect as no studies have been done of vacation rentals and B&Bs on O'ahu. Yet a telling comparison is available with the experience of Kaua'i, where there are about 2,600 vacation rentals, according to state projections. A study by the Kauaian Institute estimated that vacation rentals on Kaua'i host 300,000 visitors each year, collecting $100 million for the Garden Island's economy and supporting 1,600 jobs. The study also found that 38 percent of repeat visitors — a cornerstone of our visitor market — stay at vacation rentals and are twice as likely to visit a local market or craft fair.

Given the results of the Kaua'i study, it follows that O'ahu, the hub of the state's visitor industry, must also see significant benefits from the vacation rental and B&B sectors in terms of revenue and jobs.

Economic returns and private property rights, however, must ultimately be balanced with the concerns of residents who have vacation rentals and B&Bs in their neighborhoods. Homeowners in residential zones are entitled to peaceful neighborhoods. They should have assurance that rental and B&B operators will be responsive and responsible in conducting a small enterprise within the residential area. They deserve to know that the quality of life in their community will not be unconscionably impaired.

Other counties, other states, even other countries have found a path that properly regulates vacation rentals and B&Bs while satisfying the communities that host these units. The City Council has initiated a path on this issue for our island. I am confident that by working together, the journey will lead to a mutually satisfying solution.

Chuck Gee is dean emeritus of the University of Hawai'i School of Travel Industry Management.