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Renter Beware Hawaiian Vacation Rentals Face Closure

by Debra A. Klein | Published November 2007 | See more Condé Nast Traveler articles

Travel plans are threatened on several islands as officials shut down thousands of holiday villas. Debra A. Klein reports

Local governments on the Hawaiian islands of Maui, Kauai, and Oahu are cracking down on unlicensed vacation rentals, a move that will potentially affect the holiday plans of countless visitors who prefer private homes and bungalows to traditional hotels and resorts.

For years, authorities have not enforced—or not enacted—zoning and licensing regulations for vacation rentals, allowing thousands of villas and unlicensed bed-and-breakfasts to operate unregulated. Travelers looking to live like a local for a week or two in paradise can still find an ample selection of vacation rentals in online listings, but how much longer many of the properties will remain open is now unclear: Prompted by a growing number of complaints from residents over the parade of tourists in their neighborhoods and skyrocketing property prices and rents, authorities are starting to enforce or impose laws designed to rein in the number of short-term rentals.

Travelers with holiday villas reserved on Maui, Kauai, and Oahu are trying to learn whether their accommodations will still be open, or are scrambling to find alternative lodgings. Maria Utagawa says that she and her family rent on the quiet North Shore of Maui to be close to nature and enjoy the island lifestyle. "When I go to Hawaii, I want my kids to experience Hawaii, not just a hotel," Utagawa says. A year ago, they decided to celebrate Christmas on Maui with three other families. Now she's afraid there won't be any place to rent—or worse, that what she finds may be illegal and will shut down midweek. "I don't want to ruin this whole trip for everybody," she says, "and I don't want to stay in a resort." Bob Hurwitz, who has rented entertainer Charo's Kauai beach house for the past 16 years, says that he's booking a private island next year instead.

Adding to the confusion: Each island is addressing the issue in a different way. On Maui, a new administration has told owners of an estimated 800 vacation rentals without proper permits to begin the arduous process of obtaining a license by January 1 or face fines that start at $1,000 and accrue from $100 to $1,000 in penalties a day. Some properties may be subject to even steeper state fines, depending on their location. There are currently only 21 legal vacation rentals outside Maui's hotel zones. As vacation-rental owners hope for a reprieve, Maui enforcement authorities say that they will try to accommodate properties which have imminent bookings, but only for a brief time.

On Kauai, seasonal rentals make up nearly half the homes built in the 1990s, with the majority running along the ribbon of North Shore beach road that dead-ends at the Kalalau Trail head. Last spring, the state swiftly shuttered 16 luxury rentals in Ha'ena for allegedly violating a conservation land use policy. Elsewhere, worried owners have closed down voluntarily, as the county hammers out legislation to regulate the entire industry.

Although the home Regina and Bob Zimmerman rent each year was permitted to remain open this summer, the couple are concerned. For more than a decade, they have considered their Tunnels beach rental, just east of Ha'ena, a home away from home. "We have so many amazing memories," Regina says. "We treasure the area as much as a homeowner would."

Still, islanders who live year-round on Hawaii's beachfronts say that these vacation rentals are more like small hotels than homes and don't belong on their streets. Lisa Marten is tired of sharing her real life in the Lanikai neighborhood of Kailua, Oahu, with jet-lagged vacationers who awaken at two in the morning and party on the beach. "I don't mind hearing 'Margaritaville,'" she says, "but after the fourth night, I'm thinking: I'm not on vacation even if you are."

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