Regulate, but don’t eliminate short-term rentals

We want to go on record as being adamantly opposed to eliminating short-term vacation rentals. We own 5 acres in the Kohala Estates near Kawaihae. We have two houses on the property, our residence and a house that we built in 1989 with the intention of using it as a vacation rental. Because we intended it to be a vacation rental, it has five bedrooms and a lot of living space but very little storage. As such it is very attractive to short-termers but would be much less so to long-termers.

For the close to 30 years that we have been using it to supplement our income — we are both retired public high school teachers — we have conscientiously paid property taxes and income taxes as well as general excise and transit accommodations taxes. For that we have received no support from the county or the state. We have no access to county water and have to pay a private company exorbitant rates. Moreover, the taxes go up, and the services go down. Now we have to download all of the forms ourselves, using our own time, paper, postage stamps, and toner. We are expected to keep track of all of the due dates even though the tax office changes them seemingly at will. Much of the information on the forms is redundant or superfluous. All they really need to know is income, deductions (if any), and taxes due.

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If one of the reasons for wanting to close down vacation rentals is that some of them are owned by scofflaws who pay no taxes, then the county simply needs to hire someone to scan the websites for the Big Island and to check them against the tax rolls. In very little time that employee would earn his or her salary plus much, much more. A property manager I know has offered to do it for 10 percent of the tax revenue she collects. In other states, the major websites collect and pay the taxes. It would be easy to require owners to list their GET/TAT numbers on their ads.

Perhaps you need to differentiate between on-site and absentee owners, between owners of single properties and those who own multiple properties, between those whose rental sites offer ample parking for tenants and those who do not, between owners and managers who screen their tenants and those who do not ­­— between those who monitor their guests’ behavior and those who do not. If on-site owners or proxy management companies are irresponsible, the government needs to come down on them but not on those of us who manage our properties conscientiously. It seems patently unfair to paint all vacation-rental owners with the same broad brush.

Surely you realize that many, if not most, of the tourists who stay in vacation rentals are not likely to book hotel rooms. They are just going to go somewhere else where they can find a nice vacation rental. Whenever we travel, we look for a vacation rental as we dislike not only the expense but also the impersonal ambiance of a hotel. I have to think that most of our guests (mostly three-generation families from foreign countries, the mainland, other Hawaiian Islands, and east-side Hawaii) feel as we do. Obviously, not high-rollers, they are looking for a place where their group (usually an extended family) can stay under one roof and can cook their own meals. Even so, they infuse the island’s economy not only with tax money but also with the money they spend on goods and services while they are here.

Vacation rentals also contribute to the economy in that owners often enlist the aid of property managers, marketers, landscapers, gardeners, housecleaners, pool-maintenance companies, handymen, plumbers, electricians, etc. They also consume utilities and furnishings. It would be an economic mistake to take short-term vacation rentals off the market.

Most of us who have short-term rentals are not interested in turning them into long-term rentals. We had long-term rentals for over 20 years, and at least half of the time they ended badly. Evictions of deadbeat renters take almost a year, and the courts offer no help even after the landlord has won a judgment. Vacation rentals, on the other hand, are much more favorable to both tenants and to landlords. A traveler arrives with a return ticket. In all of the years we’ve been renting out our house, we’ve had less than a handful of guests we have asked not to return. The vast majority of them are positive in their attitudes and respectful of the house and the neighborhood. Several of them return every year or every other year. Many of them refer us to their families and friends. Many returnees regard our vacation house as their home away from home. Over the years, some of them have become personal friends. A few have purchased property nearby because they fell in love with the area.

A much more viable response to the need for more long-term rentals is to build more affordable housing. A person working in the west-side hotels should not have to commute all the way from the east side. However, vacation rental owners should not be required to turn their vacation homes into long-term rentals and give up income and security because the housing market is tight. This is not unlike changing the rules in the middle of the game.

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We are the Aloha State, and vacation rentals offer our guests — whom we want to keep coming back — an experience that is more authentic and less expensive than a hotel room. Often the state and county cater to the wealthy visitor who can afford the hotel experience, but it behooves them to make a Hawaiian getaway feasible, too, for people who are middle class and working class. It is also reasonable to hope that retirees like us with limited incomes can supplement their cash flow by entering the vacation rental market. Please allow us (and others like us) to continue sharing our home and our aloha with our guests.

Don and Kerrill Kephart are residents of Waimea.