The Leeward Planning Commission on Thursday heard from scores of testifiers who were nearly unanimously opposed to the proposed County Council bills regulating transient accommodation rentals.
The three bills introduced by council members Heather Kimball and Ashley Kierkiewicz aim to ensure that all short-term vacation rentals in the county are operating safely, legally and according to a set standard.
Bill 121 proposes that all TARs that are rented for less than 180 days will have to register with the county.
There will be three rental types: owner-hosted, operator-hosted and un-hosted. The owner-hosted shall be located in a single family dwelling and shall not be permitted in a farm dwelling, second dwelling or ohana dwelling and the owner shall live in the single family dwelling and not live in a guest house or detached bedroom.
If an owner-hosted TAR has been in use within an ohana dwelling on or before Jan. 1, 2024, the TAR may register the ohana dwelling as a nonconforming use by securing it with the planning director.
Operator-hosted TARs would be held to stricter zoning guidelines, but also would qualify for the grandfather clause as long as a nonconforming use permit is obtained. Owner-hosted TARs could be started at any time and in any zoning as long as the owner certifies that the accommodations meet all safety and code requirements and the owner lives on the property as their primary residence.
Operator-hosted rentals are permitted in resort and commercial zones, and those in operation outside of those zones as of the first of 2024 will be grandfathered in, but no new operator-hosted rentals will be permitted after the passage of this bill. TARs currently operating in permitted ohana units will be grandfathered in with a nonconforming use certificate, but after the passage of this bill, new TARs in ohanas units will not be permitted.
Bill 122 would eliminate the bed-and-breakfast category.
Bill 123 changes ohana dwelling to accessory dwelling unit, defined as a structure or portion thereof designed and used for single-family residential purposes and which can be attached or detached from an existing residence, to be used for single-family occupancy and containing one kitchen.
Many general provisions for an ohana dwelling have been removed from the proposed bill, and accessory dwelling units would not be permitted for TAR’s.
Kimball admitted crafting the measures has been a lengthy process — almost two years — and said having these meeting will help make the legislation better. She said this issue is in the top three of what her constituents have raised.
“One of the main issues is the preservation of the character of our neighborhoods,” she said. “One of the challenges we have is our current regulations do not address hosted rentals. We want to make sure everyone who operates a transient accommodation rental does it legally. When I say legally, I mean have a (general excise tax) license, they pay their transient accommodation tax, are registered and follow the guidelines,” she said. “This process has gone through a tremendous process of public engagement and is controversial.
The commission heard from over 60 residents, mostly owners of TARs, with the recurring theme that the legislation impedes on property rights and places undue regulations and fees on owners. Testifiers also questioned why an economic impact report has not been completed, and argued the bill will not have any impact on affordable rental availability.
Kris Adair of Holualoa accused the council of malfeasance.
“An example of malfeasance would be proposing a piece of legislation that destroys the livelihood of local families and irreparably damages a $1.1 billion industry for political reasons, then justify it by referencing it to a 6-year-old report from a partisan think tank that is based on data more than a decade old,” she said.
John Harabedian said the county could avoid unexpected consequences of the bill by conducting academically rigorous studies and creating laws based on results.
“The premise of this bill that will make housing magically affordable is based on a single report six years ago. The other study referenced by the authors wasn’t even published until after this bill was drafted, and the conclusion is not short-term rentals are the cause of the housing crisis,” he said.
Ikaika Smith testified as a resident who neither owns a short-term or long-term rental, but is concerned the government has failed to fix the housing problem in Hawaii.
“Now the government is trying to use taxpayers who happen to own a hosted short-term rental as scapegoats. In 1970, then Lt. Governor Thomas Gill spoke about the existential threat of the housing crisis ravaging Hawaii. He spoke about the government using public funds to pay private contractors to build homes. Now over 50 years later, we are still in a housing crisis. The county council on behalf of the hotel lobby will insist that short term rentals are the cause of the housing shortage, but did Airbnb exist in the 1970s? I don’t think so,” he said.
Smith advocated for hosted TARs because they circulate money in the community rather than un-hosted, where the money goes to the mainland.
Testifiers who are hosting TARs in agricultural zones spoke about the unintended impacts the bill would place on local farmers.
“As a part of our ag community, I would like to highlight that Bill 121 could inadvertently have a negative impact on many small farms offering agricultural tourism because of the current ambiguity of the allowable types of structures and the disallowable living arrangements,” said Heather Korotie. “Future owner operators would no longer be able to live in a detached bedroom or guest house as needed. Agricultural properties are inherently diverse often featuring unconventional or sometimes un-permitted structures like tents cabins, open air pavilions and yurts. The income these rentals contribute are vital to sustaining these farms and contributing to the local economy through agritourism. These are not ideal for long term rentals.”
She urged the planning commission to consider flexibility in living arrangements, a more inclusive definition of TAR structures, and restructure the fee schedule.
Kona resident David Hall said the bill would devastate the community.
“The county wants to impose a $10,000 fine for infractions like parking in the wrong spot, unintentionally exceeding occupancy limits and noise disturbance,” said Hall.
“In addition, Bill 121 would allow the county to revoke a short-term vacation rental’s license for receiving an unverified complaint. According to Bill 121, an unverified complaint only needs to meet two requirements — did the complainant submit the proper form and an alleged zoning violation. Bottom line is the county writes the law, enforces the fines and uses the money collected to fund the department that enforces the fines.”
Deputy Director of Planning Jeff Darrow responded to concerns.
In regard to the structure for fines, Darrow said the proposed bill shows a first violation at $2,500, second violation $5,000 and third violation is $10,000.
“There may be some confusion because a hosting platform has a one-time fine from $1,000 to $10,000. When we are dealing with violations, we will typically issue a violation and ask for compliance and give them a period of time to comply. If that doesn’t happen, we issue daily fines,” he said. “It’s going to be different for different accommodations.”
Kimball clarified those fines are for the hosting platforms such as Airbnb.
She also noted the most common complaints against TARs are related to noise. Darrow said most of those complaints are handled by the police department.
Darrow reiterated the intention of the bill is to regulate short-term vacation rentals, either hosted or un-hosted.
“Everybody can be licensed and regulated legally,” he said. “This bill is not meant to penalize or punish, it is just meant to regulate and bring everybody in order.”
After more than eight hours, Leeward Planning Commission Chair Barbara DeFranco continued the meeting to May 22.