Construction on a Kalihi home was recently completed but neighbors said they have already seen people coming and going with luggage in tow.
The new home was recently advertised as a vacation rental just steps away from the Bishop Museum.
But the city stopped granting permits for transient vacation units more than 20 years ago.
The illegal units are driven by the desire to make money, which makes Hawaii's housing crisis worse.
What used to be focused on luxury neighborhoods in Kailua and Kahala are now in Kalihi and Kaimuki.
"We need to get a better handle on this problem, it is impacting everyone on Oahu and the State of Hawaii," Honolulu Mayor Kirk Caldwell said.
Caldwell said the city reached out to the governor, to ask that he not rush into any deal with Airbnb, to collect taxes until the city
can come up with a possible enforcement fix.
"We met with his staff last week and made that request and I think we will be working together and nothing will happen until there's a more comprehensive approach. It gives us some time to come up with something that solves the problem in a comprehensive way," Caldwell said.
This summer, Gov. David Ige vetoed an Airbnb tax collection bill that lawmakers passed.
Last week, he underscored his reservations. But he stopped short of saying he would sign off on the draft deal.
"We will move it forward if we find agreement that will allow us to collect taxes that are owed in a way that doesn't facilitate illegal activity," Ige said.
The visitor industry is against any deal that doesn't disclose the list of illegal operators.
"There is a health and safety issue. We work with our industry partners to assure they have plans in emergencies and those kinds of plans do not extend to vacation rentals," Ige said.
Airbnb issued a statement saying a voluntary agreement would make it easier for the state to collect some $30 million in taxes.
Unlike legislation, the state could amend the deal or terminate it.
The mayor says a task force will met later in November, to review his administrations proposals that will then go before the City Council. He hopes to have something before the start of the legislative session.