After years of trying to cope with short-term rentals in residential neighborhoods, the City Council is backing away from the issue, at least temporarily. The Council should resolve the issue soon with the realization that neither the vacation renters nor nearby neighbors are likely to be satisfied.

The storm has been brewing almost since 1989, when the city banned short-term rental of bedrooms or entire houses - “;transient vacation units”; - in residential districts, grandfathering and issuing permits for 141 then-existing rentals. While licensed units have dwindled, renegade bed-and-breakfast homes and transient units have flourished, exceeding 3,000 units, according a state estimate.

The Council's Zoning Committee heard testimony this week about a proposal that would increase but limit the number of vacation rental units, but neither side was satisfied. Nearly all the testimony, coming mainly from the Kailua and North Shore areas, opposed approval of the compromise proposal.

Councilman Gary Okino said he agrees there is a “;need to keep the character of residential areas residential”; but added that “;some”; vacation rentals should be allowed “;on a reasonable basis.”; The proposal being considered would require a separation of 500 feet between vacation rentals, which might result in some rentals being shut down.

At the very least, such an ordinance should be enforced, disallowing the proliferation of unlicensed units that has grown in the past 20 years. Angie Larson, president of the Hawaii Vacation Rental Association, said her members are “;asking to be regulated but not in a punitive way.”; That should not allow expansion of the present activity, which residents say already has dominated and damaged the neighborhood atmosphere.