KAILUA — City officials are considering aggressive new tactics — including fines held against liens and foreclosure of some homes — in a continuing effort to crack down on illegal temporary vacation rentals in residential neighborhoods.

While no cases have gotten to those levels yet, new city regulations make it more likely that the authorities could take action against owners who continue to run unpermitted operations after receiving a notice of violations, said Mike Friedel, chief code enforcement officer for the city Department of Planning and Permitting.

The move would be the toughest step yet in what the city says is an ongoing effort to eliminate hundreds of illegal bed-and-breakfast and temporary vacation rental operators that have sprung up in Kailua and elsewhere in recent years.

Talk of foreclosure comes in the wake of a Honolulu Zoning Board of Appeals decision last week that highlights how difficult it can be for the city to enforce laws against suspected violators. In that case, the appeals board rejected a city complaint that a Kailua beach home was being rented to short-term vacationers, defined as those who stay less than 30 days.

City investigators say they relied on numerous complaints, two affidavits from neighbors and a Web site that advertised the home for rent for $1,500 a night as evidence against the owner of the home on Kailuana Loop. The neighbors said they saw several rental cars visiting the home during a one-week period in April 2006.

However, the zoning board refused to uphold the city's action after a manager for the Utah-based company that owns the home testified it was never rented for less than a month and that a friend of the owner was staying there for free at the time of the alleged violation. He said the advertisement of a daily rental rate was the result of a misunderstanding by a Hawai'i agent for the property.

While zoning officials declined to talk about specifics of the case and its implications until a written decision is issued, it was clear from testimony at the hearing that the city will have to go further in some cases to stop short-term rentals, which have been banned in all but a handful of Honolulu residences since 1989.

"Verifying the violation can be a very difficult thing. We follow up on every complaint, but if we don't actually see the nonconforming use ongoing, we can't always take action," Friedel said.

PUSH FOR PERMITTING

A new group, however, believes that the city should spend more time on permitting new vacation rentals and less time going after illegal ones.

"We're frustrated with all this enforcement emphasis. It's gotten to a ridiculous point," said Angie Larsen, a member of Ho'okipa Network, a group pushing the city to establish permitting procedures for new bed-and-breakfast and vacation rental operators. "It just encourages harassment. Instead of encouraging people to spy on their neighbors, the city should be looking for a reasonable process to offer a middle ground that allows the community to come together on this issue."

In the Kailua case, a city inspector testified that he went to the home several times following complaints from neighbors but never was able to talk to the occupants or verify that any compensation had been paid for the use of the house. Friedel said inspectors frequently can't find vacation renters home in the daytime.

"Most of the time they are out doing tourist things," he said.

City officials in recent years have increased enforcement of unpermitted temporary vacation rentals. They assessed about $150,000 in civil fines against 33 homeowners since Jan. 1, 2006. Another 57 homeowners received notices of violation in the same time period, but did not face civil fines because the violations were corrected, said Department of Planning and Permitting Director Henry Eng.

In the past year, city officials have begun negotiations with the homeowners to reduce the fines in return for signing an affidavit admitting wrongdoing and promising not to offer unpermitted vacation rentals in the future.

"The beauty of it is that we can assess a lesser amount in return for guaranteeing they won't have another violation," Friedel said. "If they are guilty of the same infraction any time in the future, the fines levied before the settlement can be reinstated."

The city can fine violators up to $1,000 a day for each continued violation.

Josh Wisch, who heads a Kailua Neighborhood Board committee dealing with temporary vacation rentals, said he was pleased with the city's negotiating policy.

'POINT IS COMPLIANCE'

"The result is what's important. The point isn't to punish them but to bring them into compliance," Wisch said. "If it shuts down an illegal operator, then it's getting the job done. The goal is to keep them from going back and doing it again."

Don Bremner, one of the two neighbors who filed affidavits against the owner of the Kailua home, said he, too, was satisfied with the outcome of the case, even though the board did not uphold his complaint.

"The owners testified under oath that they are not renting it for the short term, and now they'll have to hold to that. That's all I wanted," Bremner said.

Meanwhile, city officials hope to add another tool to their enforcement arsenal. A bill (SB 750) still alive at the state Legislature could require the state to share with the city the location of homeowners who are paying a transient-accommodation tax on short-term rentals, information the city says could be used to identify more possible violators and lead to more enforcement action.

The Senate passed the bill, but a House version of the bill doesn't include the information-sharing provision. Friedel said he hopes a conference committee will restore the language in the final bill.

Reach Mike Leidemann at mleidemann@honoluluadvertiser.com.