HONOLULU — Officials on the Hawaii island of Oahu are looking for ways to cut down on subleasing as its popularity rises with the advent of businesses such as Airbnb.
HONOLULU — Officials on the Hawaii island of Oahu are looking for ways to cut down on subleasing as its popularity rises with the advent of businesses such as Airbnb.
Renters have been cashing in on the profitability of the island’s vacation rental market through online rental sites, The Honolulu Star-Advertiser reported. But Honolulu officials are working on a way to curb the trend by strengthening the city’s subleasing enforcement strategy.
Kathy Sokugawa, acting director for the city Department of Planning and Permitting, said the city has encountered a few illegal subleasing situations. Officials recently cited a church property owner and their tenant for “illegal bed-and-breakfast activity,” she said.
Subleasing is only legal on Oahu if the tenant has the landlord’s permission and the property is in one of Oahu’s resort districts or has a city-issued non-conforming use certificate. But legal opportunities on Oahu are limited by a 1989 city moratorium that has reduced certificates to 775 vacation rentals and 41 bed-and-breakfast homes.
Tenants who sublease their units as vacation rental properties without the owner’s permission face eviction. Those who break city rules also face penalties starting with an initial fine of $1,000 and up to $1,000 a day for continued violations.
But those fines are not high enough to deter people, Hawaii real estate analyst Stephany Sofos said.
Sofos once had a tenant who was renting from her for $1,500 per month, but was subleasing for $1,000 per week through Craigslist and Airbnb, she said.
One of the things officials are looking at is increasing these subleasing fines.
Elizabeth Churchill, owner of tourism consultancy Churchill Group LLC, called the practice “brilliant” for tenants, but says those who are making money should follow regulations and pay their share.
Airbnb wants the city to update vacation rental laws, which public policy manager Matt Middlebrook said don’t account for technological developments or today’s travel preferences.
Airbnb has 8,400 active Hawaii hosts who are part of the more than $5 billion alternative accommodations industry in the state, Airbnb officials said. Many local hosts use home sharing as a way to make ends meet, Middlebrook said.
“In Hawaii, an average host earns $11,800 per year,” he said. “Hosts have told us this supplementary income enables them to keep up with the high cost of living in the islands.”
The Hawaii Appleseed Center for Law and Economic Justice acknowledges that renting a property as a vacation rental may help a small percentage of struggling local families, but said their data show that the practice disproportionately benefits out-of-state interests.
“Our main issue is renting out an entire dwelling to visitors that local families could rent,” said Gavin Thornton, Hawaii Appleseed co-executive director. “When a tenant does that, it’s equally concerning.”