In 2018, the City and County of Honolulu started to crack down on illegal vacation rentals. Until then, there were over 5000 illegal short term rental properties listed on Airbnb and VRBO, but with rising property values and rents, the government decided that enough was enough. As of late 2020, there are only a handful of legal vacation rentals, and the city continues to fine owners who violate the law.
So what is legal? Our understanding of the current laws and practices are that owners are allowed to rent their home to one guest every 30 days. The law is clear that you cannot rent a property more than once every 30 days unless it is in a resort zone. For decades, the City & County of Honolulu let owners rent out their property short term and collected taxes on them, but now they have decided to put an end to it.
In my opinion, there should be more licenses issued depending on certain criteria, for instance when an owner lives on the property and rents out a portion of it. I think that if someone lives in the property, it's a very different situation than someone who doesn't even live in the State of Hawaii at all but is turning a regular home into a virtual hotel.
Right now there are very few legal vacation rentals, so look for listings that say the TVU number - Transient vacation unit. Otherwise, make sure the owner is renting out the property only once a month.
Just because a property is listed on VRBO or AIRBNB or any other travel website, that doesn't mean it's legal in any way. Listing a tax ID number is also not a sign of being a legal rental. If you happen to rent a property that isn't legal, your reservation could get canceled by city or neighbor enforcement. So be careful and be aware that the neighbors might not be happy that you are renting a house in resident neighborhood.