- New city ordinance restricts property rights by changing the 30-day minimum rental term to 90 days!
- How will this affect my residential Oahu property?
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Look out! – Do you own Oahu residential real estate and rent it with a 30- to 89-day rental term?
According to CO 25-02 (Bill 62), which Honolulu City & County mayor Blangiardi signed into law on January 3, 2025, rental benefits for your residential Oahu property will be reduced effective September 2025.
We don’t vouch for the mayor, city council, or government actions. We are not attorneys. We are licensed realtors. We are writing about this to keep you up to date. Sign up for newsletter updates here.
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First introduced in 2023, CO 25-02 (Bill 62) is a comprehensive revamping, amending, and consolidating of Honolulu County’s LUO—Land Use Ordinance. It has been revised many times since and addresses agricultural properties, windmills, and other land use issues. Most of it appears reasonable.
However, possibly the most far-reaching change for Oahu residential real estate caught everyone off guard. In the eleventh hour, without prior announcements and public discussions, residential rental rule restrictions got baked into the final 281-page version:
Starting in September 2025, the minimum rental term in residential neighborhoods must be 90! (not 30) consecutive days per tenant. Page 63 reads:
“It is unlawful for any person to advertise or cause the advertisement of a dwelling unit that is not a registered bed and breakfast home or transient vacation unit pursuant to this section or is not operating under a nonconforming use certificate pursuant to § 21-4.110-1 or § 21-4.110-2, for a term of less than 90 consecutive days.”
Any advertisement for the rental of a dwelling unit that is not a registered bed and breakfast home or transient vacation unit or is not operating pursuant to a nonconforming use certificate as aforesaid may not include daily or less than three-month rental rates, and must include the following statement: “This property may not be rented for less than 90 consecutive days. Rental prices will not be reduced or adjusted based on the number of days the rental is actually used or occupied.”
Initial fines are up to $5,000 and can increase to $10,000 each day the property is advertised!
However, Honolulu’s failure to collect millions in STR fines perfectly demonstrates its inability to enforce existing rules. That’s precisely why the city’s insatiable craving for more restrictive rules and additional fees continues. – Incompetence.
“Every accretion of government power for whatever purpose increases the danger that government, instead of serving the great majority of its citizens, will become a means whereby some of its citizens can take advantage of others.
Once government undertakes an activity, it is seldom terminated. The activity may not live up to expectation, but that is more likely to lead to its expansion, to its being granted a larger budget, than to its curtailment or abolition.” ~ Milton and Rose Friedman from the book ‘Free To Choose’
Tinkering with a complex system, such as restricting rental rules and property rights, creates unintended consequences and throws everyone for a loop.
In his book ‘The Origin of Wealth,’ Eric Beinhocker argues that existing property rights, the rule of law, economic transparency, a lack of corruption, and other social and institutional factors greatly determine national or regional economic success.
A government that behaves predictably drives innovation and investments that foster economic progress. That’s what Hawaii, Honolulu County, and every thriving society needs to rely on. – Can we?
Erratic changes to long-standing existing rules erode trust in a stable business environment and stifle economic progress.
—What will our government cook up next?
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How Did We Get Here?
If overwhelm makes your eyes glaze over, or if you have been following our blog in the past, you may skip this historical recap section and scroll down to look for: “How Will This Affect My Residential Oahu Property?“
More than fifteen years ago, the proliferation of Airbnb / VRBO vacation rentals in residential neighborhoods began negatively affecting housing affordability and the residents’ peaceful and quiet enjoyment. The mayor and city council aggressively pushed for the following changes:
- In 2019, CO 19-18 (Bill 89) – Short-Term Rental Rules For Oahu re-stated consistent with the decades-old LUO that rental terms of less than 30 days in residential neighborhoods are illegal. Merely advertising them will trigger hefty fines.
- In 2022, CO 22-7 (Bill 41) – Oahu’s New Short-Term Rental Rules attempted to make rental terms of less than 90 days (formerly 30 days) illegal in residential neighborhoods. The intent was to preserve housing for residents. Some carve-out exemptions were supposed to be allowed for temporary workers, families in transition, temporarily displaced tenants, medical emergencies, and others. However, on 10.13.2022, ten days before the 10.23.2022 enforcement day, Federal Judge Watson’s preliminary injunction declared that the DPP and the City and County of Honolulu shall not implement and enforce changing minimum rental terms from 30 days to 90 days! One of the key provisions of Bill 41 was voided.
- In 2023, the U.S. District Court for the District of Hawaii reconfirmed the ruling as permanent (HILSTRA vs City & County of Honolulu) because Hawaii Revised Statutes (HRS) § 46-4(a) limits counties from enacting zoning laws that discontinue prior lawful residential uses.
- In 2024, Hawaii Governor Josh Green signed Act 017 (SB 2919) into law. This State of Hawaii Act sets the stage for further regulation of STRs (Short-Term Rentals). The Act grants each county the power to “control the time, place, manner and duration in which uses of land and structures take place.” Each county has complete control over short-term rentals, including the authority to phase out (!) or amortize currently legal STRs (properties with rental terms of less than 30 days per tenant). On Oahu, this could affect some Waikiki condotels.
- Today, in 2025, CO 25-02 (Bill 62) again makes rental terms of less than 90 days (not 30 days) illegal in residential neighborhoods. There are no carve-out exemptions for temporary workers, families in transition, temporarily displaced tenants, medical emergencies, etc.
Nobody talks about these drastic changes yet. And nobody knows how this got snuck into the ordinance.
Attorneys will review this and challenge it as an illegal taking of property rights. It’s too soon to predict how this will play out; clarity might take many more months.
As of this writing in April 2025, the city’s STR website still defines legal STRs as properties that allow < 30-day rentals and not < 90-day rentals as implied by the new ordinance. The city works in mysterious ways.
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30 Days, 90 Days, or 180 Days?
Some inconsistent terminology between existing HI State and City & County rules adds to the confusion.
- On the State level, Hawaii’s State tax law defines Transient Vacation rental terms as < 180 days, subject to the TAT – Transient Accommodation Tax.
- A few years ago, the State of Hawaii’s tax office suddenly stopped sharing its TAT – Transient Accommodation Tax revenue with the individual counties! All four counties started collecting their own TAT – Transient Accommodation Tax on rental income from < 180-day rental terms. Honolulu County (Oahu) now collects the OTAT – Oahu Transient Accommodation Tax.
- Hawaii’s Revised Statutes – HRS Chapter 512 – Residential Landlord-Tenant Code allows month-to-month tenancies.
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Where Did The 90 Days Come From?
Honolulu’s mayor, Blangiardi, pushed for 180-day minimum rental terms, but settled for the compromise of 90-day minimum rental terms. CO 25-02 (Bill 62) re-defines on page 219:
- Transient Occupant. Any person who rents a lodging or dwelling unit, or portion thereof, for less than 90 consecutive days, and whose permanent address for legal purposes is not the lodging or dwelling unit being rented.
- Transient Vacation Unit. A dwelling unit or lodging unit that is advertised, solicited, offered, or provided for, or a combination of any of the foregoing, for compensation to transient occupants for less than 90 consecutive days.
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30- to 89-Day “Gap” Rental Terms – The Tragedy of The Commons
Until now, the rules have been the same for decades:
- Legal TVUs or B&Bs can be rented daily, just like a hotel.
- Residential properties, homes, and condos may be rented with a 30-day minimum rental term.
Many property owners and managers rent their property long-term, for 6+ months, to minimize turnover and avoid paying the TAT—Transient Accommodation Tax.
However, some property owners and managers discovered a niche market for residential properties catering to tourists and visitors who like to stay for more than 30 days. Traveling nurses, temporary workers, families in transition, medical emergencies, etc., also need medium-term temporary housing between 30 and 89 days.
I call this the 30- to 89-day “Gap” rental term.
CO 25-02 (Bill 62) eliminates medium-term 30- to 89-day “GAP” rental terms in residential neighborhoods. The city argues that this will improve housing affordability by preserving housing for residents.
A few property owners and managers discovered that renting residential properties for less than 30 consecutive days per tenant can be lucrative while pretending to comply with 30-day minimum rental terms using fake 30-day rental contracts. – That’s blatant cheating and running an illegal vacation rental.
It’s like driving your Ferrari at 60 miles per hour through a residential zone despite your upset neighbors.
A classic tale of the ‘tragedy of the commons’ where exploiters guided by self-interest compromise the integrity of communities and the quality of life in residential neighborhoods.
“The tragedy of the commons is a situation in a shared-resource system where individual users acting independently according to their own self-interest behave contrary to the common good of all users by depleting or spoiling that resource through their collective action.” ~ Wikipedia
- Did illegal vacation rentals and fake 30-day rental contracts contribute to the city’s push to eliminate 30- to 89-day “Gap” rentals in residential neighborhoods?
- Does the city go too far by pushing 30- to 89-day “Gap” rentals out of residential neighborhoods?
Yes, absolutely, and absolutely yes!
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How Will This Affect My Residential Oahu Property?
- If you rent your residential property with a 90-day minimum rental term, you may continue.
- If you rent your residential property with a 30- to 89-day rental term, stay tuned!
It is too early to predict how the change from 30- to 90-day minimum rental terms will fare against potential legal challenges.
But be prepared; the city might succeed this time. It could require a phase-out for properties.
Remember, the 2023 U.S. District Court ruling (HILSTRA vs City & County of Honolulu) was based on Hawaii Revised Statutes (HRS) § 46-4(a), which limits counties from enacting zoning laws that discontinue prior lawful residential uses.
You might be able to continue 30- to 89-day rental terms if you can prove that you did them before 10.23.2022. However, you and your property are out of luck if you cannot prove it. Hopefully, you kept immaculate rental records.
The proposed change could also increase rental demand for legal TVUs and B&Bs and boost condotel values.
But don’t take our word for it. We are only expert realtors, not fortune tellers. We will have to wait and see how the cookie crumbles. More to come…
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