Vacation rental bill passes

  • Many amenities are available to vacation renters and condo residents at Kona by the Sea on Alii Drive. (Laura Ruminski/West Hawaii Today)
  • Karen Eoff
  • Ohara

HILO — After two years, seven bill drafts and a lot of community input, Hawaii County will soon join the other three counties regulating short-term vacation rentals.

The County Council on Tuesday passed Bill 108 on a 6-1 vote, setting in motion the next step in the process: formulation of rules by the county Planning Department. Once drafted, the rules face a public hearing and are expected to be finalized by April 1.

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North Kona Councilwoman Karen Eoff, one of the bill sponsors, called the bill a milestone, saying it’s an appropriate way to end the council’s two-year term. A new council will be seated Dec. 3.

“Although it’s been a very long process, I think we’ve set up a procedure where we have a very fair and balanced approach,” Eoff said. “Over the past year and a half we’ve really worked to build consensus.”

Mayor Harry Kim, speaking before the vote, urged the council to bring the bill home.

“This must be controlled because of the disturbance of a lifestyle,” Kim said. “Vacation rental is a business. It’s not a good or bad business, it’s just a business. … This is good where it is controlled.”

He said the council should look around to understand how unregulated rentals are harming residential neighborhoods. The bill includes good neighbor provisions that all vacation rentals must follow regarding noise and parking and requires an owner or manager to be reachable within three hours of receiving a call from a guest, neighbor or government agency.

“We’ve been working on it for two years now trying to come up with a proposal that is acceptable,” Kim said. “From the very beginning the goal was to make Hawaii a good place to live. … I ask the council to finish this work. “

Puna Councilwoman Eileen O’Hara voted against the bill because she didn’t think it offered enough protections for her district, which is recovering from a volcanic eruption. Her attempts to amend the bill to specifically allow replacement rentals to be added if others are lost to disasters were unsuccessful.

“The devil is in the details and there are some things in this bill that I think will not serve the community well,” O’Hara said. “This has a particularly negative impact on the district I represent.”

The bill still gives the Planning Department discretion to allow replacements, said Planning Director Michael Yee.

“We’re passing the framework and we’re going to have to get into the details of forming the rules,” Yee said. “The right place to address that would be in the rules and procedures.”

The bill creates a new category under the zoning ordinance for short-term vacation rental, defined as a dwelling unit where the owner or operator does not reside on the building site, that has no more than five bedrooms for rent on the building site and is rented for a period of 30 consecutive days or less. The bill allows the short-term use of an owner’s primary residence if the owner lives in it for most of the year.

The bill prohibits unhosted short-term rentals in residential and agricultural zones, while allowing them in hotel and resort zones as well as commercial districts. Existing rentals in disallowed areas would be grandfathered in after obtaining a nonconforming use certificate.

All vacation rental owners in existence as of April 1 will be required to register their property within six months and pay a $500 fee, under the new ordinance, showing that transient accommodations taxes, general excise taxes and property taxes are paid in full. Short-term vacation rentals may be established only within a dwelling that has been issued final approvals by the Building Division for building, electrical, and plumbing permits.

The nonconforming use certificate for those preexisting in disallowed areas must be renewed annually, at a cost of $250.

In addition to creating rules, the next step for the county is to create a separate taxing classification, so vacation rentals can be charged a separate property tax from other residential properties. Some council members, such as Hilo Councilman Aaron Chung, would have preferred an omnibus bill that dealt with the tax classification at the same time. Other council members were just glad to get something on the books.

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South Kona/Ka‘u Councilwoman Maile David praised Eoff and former Kona Councilman Dru Kanuha for their work getting the bill passed.

“I’ve watched them over the last year put heart and soul in finding an equitable way to craft this issue,” David said. “All the emails we’ve been getting … so many different opinions and pros and cons that are coming toward us from the community. … Although it doesn’t satisfy everybody’s needs, we’ve got to start somewhere.”

  1. Buds4All November 21, 2018 6:14 am

    Eoff was allowed to push here hypocritical agenda through another self serving political whore!


    1. Dan November 21, 2018 3:39 pm

      Spelling should be fundamental at this point Bud!


      1. Buds4All November 22, 2018 8:52 am

        Surry Dud your a mucho mo betta purson than me?


  2. 4whatitsworth November 21, 2018 12:26 pm

    “All vacation rental owners in existence as of April 1 will be required to register their property within six months and pay a $500 fee”

    “Mayor Harry Kim, speaking before the vote, urged the council to bring the bill home.”

    There is that sucking sound of West Hawaii resources going to Hilo..


    1. Jillian Marohnic November 21, 2018 12:33 pm

      East Hawaii has plenty of vacation rentals, especially in agricultural zoning.


      1. 4whatitsworth November 21, 2018 12:44 pm

        That money will also stay in Hilo. This bill was good for Hilo and good for the Hotel industry. I doubt it will be worthwhile for anyone else.


        1. Dahaoleformerlyknownasbi0008 November 21, 2018 2:24 pm

          Over half of residents in Hawaii rent. It will be good for them. More availability and lower rents.


  3. Jillian Marohnic November 21, 2018 12:31 pm

    What’s to stop people from continuing with their illegal rentals? This article doesn’t talk about penalties or enforcement. So many existing vacation rentals ignore the existing tax laws — why would they change their behavior, especially now with higher fees to conform?


    1. Alex November 21, 2018 10:52 pm

      The ordinance itself features penalties and the County is putting a permitting and enforcement process with some dedicated resources together.


      1. angkoldoy November 22, 2018 4:35 am

        “….Plan is to put….enforcement “. This I gotta see. Bogus complaints galore.


        1. Alex November 22, 2018 9:10 am

          I think it will take time, but enforcement will eventually catch up simply because they will figure out that it easily pays for itself and courts will allow them to recoup back taxes and violation fees in one swoop through the courts even years later. See court decision in San Fran last month, where the City was allowed to recoup several million dollars of back taxes and violations from a single illegal host who kept ignoring the ordinance


  4. LimeyinHi November 21, 2018 1:58 pm

    Why let the existing vacation rentals in residential neighborhoods continue to do business. They are illegal and all should be shut down. Residential neighborhoods should be for residents only, no exceptions.


    1. Alex November 21, 2018 11:01 pm

      Many of us agree with this, but the powers-to-be decided otherwise.


    2. Emc December 30, 2018 8:54 am

      It’s not illegal if the law says it can be allowed. Just because someone doesn’t like it doesn’t make it illegal.


      1. LimeyinHi December 30, 2018 10:58 am

        A vacation rental on property zoned single family residential is illegal by definition.


        1. Emc December 30, 2018 11:23 am

          Hawaii County currently doesn’t have any regulation on short rentals so it’s currently not illegal to have a short term rental in a residential area. This is what Bill 108 is setting up to regulate.


          1. Alex January 1, 2019 7:34 am

            Of course Hawaii County Zoning code DOES regulate short term rentals in residential zones today, but the County has chosen not to enforce its own laws so that it can create a lucrative permission scheme (Bill 108) that is really designed to register and collect taxation. (See testimony by land use attorney Michael Matsukawa, which was reported upon in the Tribune during one of the Bill 108 hearings.)


  5. bigigirl November 21, 2018 4:45 pm

    I still say it’s putting the cart before the horse as lots under a quarter of an acre are zoned ag in Volcano. Rezoning should come 1st rather than grandfathering in ag lots.


  6. Greg November 28, 2018 10:08 am

    This sounds like a way for the county of Hawaii to pacify owners in residential areas that have complained about noise, and a way for the county to collect more TAX REVENUE. Additional tax revenue is probably the main driving factor. As the owner of a legal vacation rental that has followed all of the rules, paid all of the taxes, and complies with the new laws in bill 108, I want to know what the county is going to do to keep illegal vacation rentals from operating and competing with legal ones? I also want to know how my $500 fee and higher property taxes will be used? The money should be used to enforce the new laws, and to pursue violators. Most vacation rental owners that operate legally aren’t profitable. Violators need to be shut down and fined so that owners of legal vacation rentals can charge enough/more to make it worthwhile, and sot they can afford to pay the taxes & fees. The county has helped the complainers and found another way to line their pockets with more money, but they haven’t told us how they plan to help vacation rental owners. TAT & GET are a huge, and vital, source of revenue for the county. Vacation rental owners take the risk and pay the fees to help bring more tourists to the big island, so what’s in it for us??


    1. Alex November 28, 2018 1:13 pm

      Exactly. The sad part is that the next recession will probably really make most of the barely profitable rentals close up shop and move. This will be an unintended consequence of the new law, which heavily favors well capitalized multi-entire-housing unit operators.

      GET and TAT are state taxes and only a fraction of them come back to the Counties. The County is creating its own new real property tax category specifically for vacation rentals; that’s where the intended new tax revenues will come from.

      Nobody knows what enforcement will be, including the County, because it has never been tried.


  7. Ernest T Bass December 3, 2018 6:42 pm

    I have rented and operated legally and paid my taxes and remitted the collected taxes.
    All the while hundreds of others did not.
    I wish I had followed their lead and operated illegally….
    After 6 years of making beds and cleaning toilets and doing things on the up and up, the county has just about pushed me out of business.
    Frankly it will be a relief in many ways. ( just sho ot me )
    I’m out.
    The county will be left with the scofflaws…..serves them right.
    Many of the county council advancements of their agenda were done with votes from Only PARTIAL County Council representatives…..
    Some had BETTER and More Important things to do I guess.
    Ruggles didn’t even show up as did other Non Representatives. Auwe ruggles
    So much for MY VOTE.
    I used to believe in voting.
    VOLCANO and PAHOA are dying on the vine.
    There are NO tourists and there is NO Business ….
    This is the perfect COUNTY moment to kick you in the head when you least need it.
    I will tell you and predict right now the county will fck things up even worse than they were.
    Rots of Ruck Harry Kim.
    Your “project revenues” are pure fantasy and the county will find itself selling paper debt for their obligations ( county pensions and salaries)
    Take your fees, take your inspectors and taxes and and go chase these people down harry….good luck….Hele On will look GREAT BY COMPARISON.
    You are not getting any more tax money from me…..I am done….kaput and out and mercifully done spinning MY wheels in the county mud trying to appease Hawaii County by being legal.
    …I am going to go travel and see the world. while Hawaii county goes further broke.
    I take a certain happiness in that thought….
    Better start shaking the trees harry….the county and state is broke and you drove taxpayers out of business.
    I will laugh gleefully as I watch your team of inspectors bumping into one another while the county council and planning department try to find their pencils.
    Stink eye county.


    1. Alex December 3, 2018 6:56 pm

      Sorry to hear, but some context would help. What do you mean by “legal”? Is yours one of the 170+ or so originally approved B&Bs? Do you live on property and how is the property business zoned (residential, ag) ? Please elaborate for your readers.


      1. Ernest T Bass December 3, 2018 6:59 pm

        Who are you?
        a county detective?…..
        No more co operation or blood from this particular rock.
        Talk to Jen Ruggles…..she can help you with your questions.


        1. Alex December 3, 2018 7:06 pm

          I thought you are leaving the business, so why care 🙂

          No, I am not a County employee, I am simply very interested in the subject. For the record, Ruggles was critical about the language of the bill, even went as far as doing her own inquiries / called other counties about their experiences with their ordinances. Unfortunately, she was not able to influence the outcome. Did you approach her?


          1. Ernest T Bass December 3, 2018 7:09 pm

            Ahhhh….she was critical……
            hmmmmm….Critically Totally Absent from what she was elected tpo do…..REPRESENT.
            Too much puffing for that “representative”
            I want my Vote back! for non performance.


          2. Alex December 3, 2018 7:16 pm

            By the time Ruggles raised the war crimes issue and was told to leave, the other council members had pretty much made up their mind that they were going to support this, no matter what. There was never a chance that she could have influenced it, except very early on.


          3. Ernest T Bass December 3, 2018 7:17 pm

            Well, nice talking to you.


          4. Alex December 3, 2018 7:20 pm

            Likewise. I always appreciate reading your insighful posts. Maybe we get to meet some day,


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