City right in going after illegal rentals

THE ISSUE Heavy fines have been levied on vacation rentals operating without permits.

A SHARP boost in fines and increased enforcement appears to be paying off in cash for the city's lean coffers and in peace of mind for Oahu residents troubled by illegal vacation rentals in their neighborhoods.

The effort should continue persistently to curb the illicit operations. The issue isn't whether Hawaii's tourism industry needs expanded options for visitor accommodations. It's about those who are renting to tourists without proper certification breaking the law.

The city says that since the start of the year, 19 people running illegal vacation rentals have been issued fines totaling $429,000. The amount reflects the increase in daily penalties from $50 to $1,000, which the City Council put in place last year.

That was in response to complaints about the disturbances created in residential areas not suited to short-term occupants. It also gave the city more of an incentive to go after those who carry on the illegal businesses. The 19 citations so far this year already far exceed the five issued in all of 2005.

Though only about 1,000 vacation rentals are permitted on Oahu, a state study last year showed that more than 2,000 rentals were advertised on Web sites. Across the state, vacation rentals and bed-and-breakfast operations number nearly 9,000. It appears many do not have necessary licenses and do not pay tourist accommodation or excise taxes.

The state Tax Department has been examining these businesses, initiating audits of 93 vacation rentals on Oahu and 123 bed-and-breakfast enterprises statewide.

A city official says that many vacation rental owners do not live in Hawaii and claim ignorance of the law. Enforcement and fines should raise awareness.

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Editorial Update: In an editorial yesterday, we urged the governor and mayor to end their quarrel over whether the city or state collects a 0.5 percent Oahu excise tax surcharge to pay for a Honolulu mass transit system. By the weekend, cooler heads prevailed as Governor Lingle, her aides and City Council members tentatively agreed to a plan to resolve the problem that could have jeopardized federal funding for the project. News of the agreement came after our Sunday editorial deadline but was more than welcome. The Council is set to hold a meeting Thursday on a proposal that would have the city contract a vendor who would upgrade the state's computerized tax collection system.