Unlawful hospitality

By Eloise Aguiar and Lynda Arakawa
Advertiser Staff Writers

Every vacation rental established on O'ahu after the late 1980s is operating illegally.

Marilyn Warman, owner of the Paradise Palms Bed and Breakfast, spruced up a guest room for a visitor. She has loved hosting guests from all over the world and believes that small enterprises such as hers only enhance the spirits of the Windward community. Bruce Asato • The Honolulu Advertiser

Yet if you ask people what should be done, you might get 1,200 different opinions.

There are those who despise the added traffic and noise from tourists invading residential neighborhoods. Others welcome the money and energy visitors bring to a community.

Hank Whittington is in the fed-up camp. He's watched about six houses near his home in Kailua turn into vacation rentals recently, and he isn't pleased.

"People come in from New York at 6 a.m. It's noon in New York, and they're ready to party," Whittington said. "They're on vacation and hitting the pool at 4:30 a.m."

Gail Allen sees it differently.

These "are nice, decent families, not rock star tourists," said Allen, owner of Kailua Beachwalk and Island Treasures Art Gallery. She says many shops in the area would go out of business without the added revenue from visitors.

"I don't see how they can't be managed in a residential community," Allen said.

Now the Honolulu City Council is entering the debate.

Dela Cruz and Marshall balance that change with a second proposal that would allow home owners to register as legal bed-and-breakfasts for the first time since 1989. The bill distinguishes between a vacation rental — where the entire house or condo is rented to guests — and bed-and-breakfasts — where only part of the house is rented and the owner lives in the rest.

The thinking is that if the owner or operator is on the property, the concerns of neighbors will be better addressed. There are 60 licensed bed-and-breakfasts on O'ahu, but it's acknowledged that the actual number is much higher.

"I've tried to come up with what seems fair for the whole community," said Marshall, whose district includes Kailua, which has the greatest number of vacation rentals on O'ahu.

But Marshall acknowledges the difficulty in finding a solution that is palatable to everyone.

Following a preliminary hearing on the proposals last week, Marshall said, "I've worked with people for 2 1/2 years on both sides of this issue and as you've heard for yourself, they're very, very vehement."

Bane or blessing?

Don Bremner, spokesman for the Keep it Kailua group, called the council members' proposal a travesty. Bremner said the community was told 15 years ago that the proliferation of lodging in residential areas would end with the ban on new permits. History is now repeating itself, he said.

Gail Allen, the owner of the Kailua Beachwalk and Island Treasures Art Gallery in Kailua, testified last week in favor of vacation rentals and bed-and-breakfast operations at the City Council chambers. Eugene Tanner • The Honolulu Advertiser

Whittington agrees. He says his lane off North Kalaheo Avenue was a peaceful, laid back street for decades, but then vacationers began to arrive last year transforming it into a tourist destination with a constant flow of strangers, noise and large gatherings.

He opposes any change to the law that allows more permits to be issued.

"Basically if they allow it, it's rezoning the whole of Kailua," Whittington said.

Marilyn Warman has an opposite take. She operates a legal bed-and-breakfast and enjoys having people from all over the world stay in her home.

"I just see the wonders of it," Warman said, not to mention the added income which allowed her to give up her mortgage banker job.

Tonic Bille, who also operates a permitted bed-and-breakfast in Kailua, favors opening the market to new entrants and placing restrictions on them. The tax revenue from rentals and money spent by tourists in the community are a boon to the community, she said.

"With rules, regulations and other conditions all these other problems will go away," Bille said.

In 1989, the city council banned issuing new permits for vacation rentals or B&B out of a concern that they were growing too fast in number.

Under the current law, fines for operating unlicensed vacation rentals or bed-and-breakfasts range from $50 to $1,000, but enforcement is lax. City officials say verifying illegal use is difficult because an inspector must catch a vacation renter at the site.

Marshall said the law, which she called unenforceable, was a result of too much compromising.

"I for one am not going to support another unenforceable law. ... So if this thing gets so convoluted by the end of this interminable process, it may just die.

"I think we're just a long way away from knowing what we're going to do here."

Before becoming a law, the Marshall and Dela Cruz proposals must go through a lengthy process that involves not only a series of City Council and council committee approvals but a review by the city Department of Planning and Permitting and the Planning Commission.

Even if the proposal wins approval, the impact on the vacation rental market could be limited because the law is based on advertising and some rentals don't advertise.

"Do I think it's going to wipe out the illegal vacation rental industry in terms of transient vacation units?" Marshall asked. "I have no idea. I would hope that it will make people understand that what they're doing is illegal. Can we wipe out speeding with speeding tickets? No."

Being illegal is 'scary'

Meanwhile the debate continues.

Maxine, who declined to give her last name because she operates an unlicensed bed-and-breakfast, said the income from her bed-and-breakfast allows her to continue living in Kailua. She said she has not received any complaints from neighbors since she began the bed-and-breakfast a few years ago and that she pays state general excise and transient accommodations taxes. But knowing that it's still illegal is unsettling to her.

"It's scary," she said. "It really is — not being legal and knowing that we're doing something wrong and yet wanting so much to be licensed and willing to follow the rules and do whatever we can."