Vacation rental fines hit $429,000
The city has collected just $5,000 of the sum due to pending appeals over the illegal sites
The proliferation of illegal vacation rentals in residential areas could boost the city's treasury this year.
Since January, city inspectors fined 19 homeowners a combined $429,000 for renting their properties for less than a month without a permit. In comparison, just five people were cited in 2005 for a total of $3,000, according to statistics from the city's Department of Planning and Permitting.
Penalties for running the short-term rentals increased from $50 to $1,000 a day last summer after residents began complaining over noise and traffic from tourists vacationing in their neighborhoods. The money goes to the city's general fund.
Because of pending appeals, the city has collected just $5,000 as of Tuesday, compared with $3,000 in all of last year. But it expects to get accumulated payments from at least 10 residents who have been ignoring orders to cease operations.
"If they just ignore it, it's like a meter in a taxicab," said Henry Eng, director of planning and permitting. "The daily fines continue until the matter is corrected ... and then when it is resolved, we work on collections of the fine."
For example, one landlord in Lanikai, who was ordered to stop offering the rentals on March 15, owed $78,000 as of June 1, according to Don Bremner, an upset Kailua resident who is keeping track of enforcement.
"It's working," said Bremner, a consultant. "There's still a lot of people renting. However, we are seeing the beginnings of a turn back."
Another dispute involving two neighbors in Lanikai is now in court.
Susan Cummings is suing her next-door neighbor, claiming the woman has been making thousands of dollars in rent each month from guests who stay at the home for less than 30 days.
"She's living in hell in Lanikai," said Cummings' attorney, John Remis.
He said her client, who installed security cameras around her home to film guests, plans to submit the images as evidence in court hearings.
About 1,000 homeowners on Oahu have a certificate to manage the short-term rentals. Although the city stopped issuing new certificates in 1989, a state study done last year found more than 2,000 online advertisements for the rentals on the island.
Even with new fines, Bremner said some homeowners could still be profiting from nightly rates as high as $2,000.
"There maybe one or two who are in the category of being able to pay $1,000 a day and still make money," he said, "but those are few and far between."
Many property owners involved in the industry live outside Hawaii and advertise their homes on the Internet to mainland visitors, according to Michael Friedel, code compliance chief for the city. "We are getting referrals every day for vacation rentals. The community is up in arms over this," he said.
The daily fines kick in if landlords continue to offer the illegal rentals 30 days after being warned.
Friedel said some operators who have been contesting the fines claim that they were not aware of the law, while others argue that visitors who sign leases for more than a month leave earlier without giving notice.
"They act like they are (surprised), but I don't really think so," Friedel said, noting that guests who stay at the rentals are not breaking the law. "The word is out."