Proposed short-term rental rules on Big Island met with overwhelming opposition

Proposed changes to regulations for short-term rentals on the Big Island, those of 180 days or less also called transient accommodation rentals, sparked about four hours of impassioned testimony during a meeting Tuesday of the Hawai‘i County Council Policy Committee on Planning, Land Use and Development.

More than 100 people submitted written testimony and dozens more turned out in person or via Zoom in a display of overwhelming opposition to the three-bill package introduced by County Council Chairwoman Heather Kimball and Puna Councilwoman Ashley Kieriewicz aimed at ensuring all transient accommodation rentals on the island are operating safely, legally and under the same set of standards.

The proposed legislation also seeks to preserve the character of the county’s residential and agricultural areas while reducing speculative property investment in those markets. It’s also hoped the changes would take off some of the inflationary pressure short-term rentals have on long-term rental rates.

Making it easier to build ‘ohana units for family or long-term rental use is another goal of the proposed measures.

Bill 121 was the focus of most of the community’s ire.

The measure would cover three categories of short-term rentals, including two types of hosted rentals and those that are unhosted. It would require all transient accommodations in the county to be registered. It lays out registration fees for each type of short-term rental, defines standards of conduct and sets out fines for those in violation of the potential new rules, among other new regulations.

“It’s an industry-wide alarm bell,” said Nick Benoit, representing Elite Pacific Vacations, about the proposed bill. “Property management companies across the board and homeowners engaged in short-term renting face the stark prospect of scaling down or going as far as ceasing operations entirely.”

He added that the stringent new rules could inadvertently deepen one of the problems the bill seeks to address — the affordable housing crisis — by harming people in the short-term rental industry by causing the loss of jobs and threatening the economic stability of the island.

Benoit said many of the homeowners his company represents also have no intention of entering the long-term rental market because of the “tenant-friendly nature” of laws and a landlord-tenant code already in place, potentially leading to an increase in vacant properties rather than alleviating the housing shortage.

“These stringent conditions could deter the operations of legitimate short-term rentals, which play a crucial role in our local economy by providing jobs and supporting tourism,” he said.

Marbella Alford of Kailua-Kona said in her written testimony that the impact of Bill 121 would threaten her livelihood. She works in the vacation rental industry cleaning and caring for a property, which has not only been a source of income for her but also allowed her flexibility to pursue a passion for working with foster children.

“Losing this opportunity would undoubtedly put me in a position of financial struggle,” wrote Alford. “Moreover, it would severely impact my ability to support and provide for the foster children I work with. The income I earn from my employment enables me to contribute to their well-being, ensuring that they have the necessary resources and care.”

After speaking with the property owners, she is concerned if the proposed new regulations were to become law, her job and many others like it could be eliminated.

“Many property owners will be forced to sell their homes, and with home prices where they are today, none of those homes will end up in the hands of locals like me,” Alford wrote. “You will destroy jobs and benefit no one.”

Testifier after testifier stepped up to the table Tuesday to give council members their opinions and convey their concerns.

They asked questions such as why the council is lashing out at people who operate short-term rentals, which are part of the tourism industry that is a large part of the state and county economies. One testifier said owners of these types of rentals have targets on their backs as they face constant anti-transient accommodation rental rhetoric from the state and governor.

Another person said Bill 121 does not conform to the state’s “Aloha Spirit” law. Others called the measure dangerous, shocking, shameful, an abuse of power and unacceptable, with one person going as far as calling the bill an example of legislation put forth by a tyrannical government.

Those opposing the bill, many who echoed Benoit and Alford’s concerns, gave myriad other reasons why, including:

• Infringing on the rights of private property owners and homeowners and being gross overreach by government.
• Forcing short-term rentals out of markets where resorts do not exist, such as Volcano.
• Requiring additional and higher fees for owners who already pay thousands, some upward of $20,000 a year, to operate short-term rentals, including taxes.
• Questioning how enforcement of the new regulations will be done.
• Needing more focus on unhosted short-term rentals, which often are owned by entities off-island.
• Damaging the agriculture tourism industry and taking away opportunities for people from around the world who want to stay somewhere other than a resort when they visit the island.
• Putting more responsibility on the Hawai‘i County Planning Department that can’t handle the volume of work it has now.
• Having little or no credible evidence showing transient accommodation rentals hurt the housing market and not having enough expert opinions, data and studies to know how the measure would impact the county’s economy.
• Needing more regulations for just hosting platforms such as Airbnb and VRBO, which one person said was the real issue.

One testifier also suggested putting the proposed new short-term rental regulations to a public vote instead of government simply making the decision, saying the overwhelming message conveyed by the community during Tuesday’s meeting is that the bill package is not up to par.

While the vast majority of testimony was against the proposed measures, there were a few who offered their support, including former Hawai‘i County Mayor Harry Kim and Hawai‘i Fire Department Chief Kazuo Todd.

Todd said there are 27,000 short-term rentals on Maui, 52% of which are not owned by people in Hawai‘i. He understands that these types of rentals are good investments, but as fire chief, he has concerns about unhosted rentals in the event of an emergency such as the wildfires that devastated the Valley Isle and destroyed Lāhainā.

People who don’t live here are not aware of how emergency response works and have no relationships with responders, which creates issues when disaster strikes. Todd said new regulations are needed not only for that reason but also are a quality of life issue.

Kim said additional regulations for transient accommodations are needed and the proposed bills only improve existing rules by updating and including clear and consistent definitions, improving operation standards and removing barriers for homeowners to build ‘ohana.

The county’s first attempt to regulate short-term rentals was in November 2018 with the passage of Bill 108, which included some recommendations from a March 2018 Hawai‘i Appleseed report that provided an overview of the impacts of the rentals on the state’s housing market.

That bill, however, only dealt with unhosted rentals, limiting where they could operate and creating a set of operational standards. There was always a plan to revisit the issue, so after about two years, some modifications were needed to address other types of short-term rentals and clarify operation standards while making them easier to follow and more enforceable.

Kimball said during Tuesday’s meeting that transient accommodation rentals are commercial endeavors and those who choose to stay in them have certain expectations. She also clarified that the bills would not ban short-term rental owners on the island from continuing to rent.

The main objective of Bill 121 and its companion measures, bills 122 and 123, is to find a balance between secondary owners’ investment and speculation in property and Big Island families, people who live in their primary residences, trying to make ends meet.

The council, after about 2 and 1/2 hours of its own discussion following public testimony, ultimately moved the bills ahead. They now will go to the Leeward and Windward planning commissions and the county’s planning director for their consideration and input.

They then will come back to the Policy Committee on Planning, Land Use and Development for further consideration. If the committee gives the package its approval then, the bills will then go to the full council for two more readings.

The entire process will likely take months and give the public more time to offer feedback.

So the bills are far from the finish line, which quelled some of the anxiety of some council members who were unsure if they should move forward after so much public outcry and expressing concerns of their own, including how the proposed new regulations would impact farmers who use short-term rentals to supplement their income.

Kimball and Kieriewicz admit there is more work to be done on the bills.

A first draft of the proposed new regulations was released about a year ago and they have been debated with community members, including during three webinars. County government has since fine-tuned the language, but the two council members also said there were parts in the bills that not even everyone who worked on them could agree upon.

“We want to get more community feedback and also hear what our commissions have to say so that we can reconcile differences and do what’s best for our community,” Kieriewicz said.