Vacation rentals bill blasted: Commissioners get an earful over proposed TAR regulations

Fury and recriminations flew between vacation rental owners and county officials over proposed new short-term rental regulations Thursday.

At a marathon eight-hour meeting of the Windward Planning Commission, residents clashed with County Council Chair Heather Kimball over the controversial Bill 121, which would overhaul the county code concerning short-term vacation rentals.

But despite — or perhaps because of — the anger surrounding the measure, the commission made no decision about the measure Thursday, postponing the decision until its May meeting.

The bill redefines short-term rentals as “transient accommodation rentals,” or TARs, and introduces a slew of conditions and requirements regarding how and where they are allowed to operate.

Three classes of TARs are defined in the bill — owner-hosted, operator-hosted, and unhosted — each with their own lists of dos and don’ts.

For example, owner-hosted TARs are allowed in a wider range of zoning districts, and nonconforming use certificates can be granted outside of those districts for TARs that operated before this year. Operator-hosted and unhosted TARs have more restrictive conditions, with unhosted TARs not allowed any new nonconforming use permits outside of their permitted zoning districts.

Each class of TAR also would be granted different fee schedules: Registering a new owner-hosted TAR initially costs $500, with annual renewal fees of $100, while owner-hosted nonconforming use certificates cost $250 up front and another $250 a year to renew. The other classes cost more to set up, with operator-hosted TAR fees 1.5 times those of owner-hosted units, and unhosted units costing double or more what owner-hosted units cost.

Registering a TAR also would require extensive documentation, including site drawings, floor plans, a county real property tax clearance certificate, and a notarized affidavit stating that the TAR meets health and safety requirements “under penalty of perjury.”

New TARs also would not be permitted in ohana units, detached bedrooms or guesthouses — existing owner-hosted TARs in ohana units could be grandfathered in — and a TAR’s host would be required to reside in the home itself, and not a detached unit.

Furthermore, the bill sets out a list of rental standards for TARs — listing required quiet hours, maximum gathering sizes, parking and signage requirements, and more, with fines for violations ranging from $2,500 for a first offense to $10,000 for a third.

All this and more has led to the measure becoming deeply concerning for vacation rental owners, who came out in droves Thursday to warn that passing the bill would cause them to lose their businesses and their homes, and calling the measure unconstitutional at least and a naked effort by hotel industry lobbyists to crush competition at worst.

“The county should not dictate to private property owners which parts of their home they may occupy or rent, or how many visitors they may allow,” said Christi Mallicoat, president of Hawaii Island Realtors. She added the measure seems to exist in lieu of actual enforcement of Bill 108, a 2018 measure that similarly established regulations for how short-term vacation rentals operate.

Many echoed Mallicoat’s criticisms of the bill, while others raised concerns about their own livelihoods.

Pahoa TAR owner Connie Goff said the money she receives from renting out a portion of her home for parts of the year is what allows her to own a home in Hawaii at all. The additional fees imposed by the bill, on top of the potential for enormous financial penalties for any violations, are “exorbitant,” she said, and will only price more and more people out of the state.

Another TAR owner, Audrey Wong, pleaded tearfully for the commission to vote against the bill.

“I’m a single mom,” Wong said. “Please don’t take away my means of how I pay for education for my child, pay for my medical issues, and my retirement plan. Living in Hawaii is expensive. … It is impossible to (pay my mortgage) with just one job. With Bill 121, I’d likely have to sell my home … and the sales price would maybe not cover the mortgage.”

Despite there being four other items on the agenda unrelated to the bill, the first hour of the meeting was almost exclusively dedicated to testimony against the measure, with only a scant few voices in support of it — although at least two of those appeared to be doing so sarcastically.

“I think it is great that the transient accommodation owners must register like sex offenders and post their scarlet letter for neighbors and inspectors to see,” said Joe Schneckenburger of Kailua-Kona to laughter from attendees. “But really, the next-door house rented to long-term neighbors is much worse. Once last year, the vacation rental baby was crying for over 10 minutes — kind of annoying — but the regular, long-term tenants have wild parties that go on at all hours. They play loud music much of the time. They need to register also.

“I think that everyone should have to register, and everyone should have to be back to their house within three hours of my phone call,” Schneckenburger said, in reference to a provision in the bill requiring that a representative for an unhosted rental be physically present at their TAR within three hours of receiving a call from a renter. “So what if she’s in Honolulu for a medical appointment? She can just tell her doctor she needs to run and sprint to the airport and be back here whenever I demand … which can be whenever I’m annoyed at her or want to toy with her.”

So went the first hour of the meeting. After briefly discussing the other items on the agenda, the commission’s discussion of Bill 121 itself began with a presentation by county planner Tracie-Lee Camero and Kimball, the latter of whom attempted to dispel what she called misinformation about the bill.

“The very first thing about this bill is that if you are a resident of this county, you can start a transient accommodation on your property at any time, so long as you’re doing it legally,” Kimball said, beginning a strident speech to the commission. “So, if you hear folks saying that they will not be able to have a TAR on their property, they are being fed misinformation.”

Kimball went on to say that, while the county needs to protect property rights, it also needs to properly regulate commercial enterprises within residential and agricultural zones. She added that consumers have the right to stay in lodgings that are confirmed to be safe.

“I want to speak to the fines,” Kimball continued. “$10,000 a day. No! Again, another piece of misinformation you’re being presented with. The fines are very reasonable, they are progressive, and we adjusted them based on our conversations with some of the folks behind me today,” she said, referring to the public attendees of the meeting, many of whom grumbled throughout Kimball’s presentation.

While Kimball said the daily fines of up to $10,000 outlined in the bill are specifically for hosting platforms such as AirBnb and not for TAR owners, the bill does allow for $10,000 fines to owners for a third violation, which led to confusion among testifiers.

“You’ve been giving a lot of red herrings today,” Kimball said. “‘If you wanna solve housing, you just need to work on infrastructure.’ ‘If you wanna solve housing, you just gotta build more housing.’ Well, yes! We gotta do all the things! But one of the things we also need to do is keep housing from slipping into other uses that are not providing homes for our residents, and we need to keep the market in check.”

Kimball, practically shouting at that point, presented data from the City and County of Honolulu showing that even though only 2.5% of its housing is used for transient accommodations, overall housing prices have increased by 5%. Through this, she said, it is clear that allowing the free proliferation of short-term rentals creates an inflationary pressure on the housing market that drives up prices and forces lower-income residents out of state.

Kimball concluded by saying that the fees outlined by the bill are necessary to subsidize the county’s ability to enforce the standards established by Bill 108.

“There’s still due process — if somebody gets a complaint, the (planning) director determines it’s a violation, they get a fee, they have the appeals board, they have the Third Circuit Court — due process still exists,” Kimball said. “And I want to ask folks, if you’ve got an issue with these fees: Do you plan on actually violating the law?”

None of this seemed to particularly endear Kimball to the attendees. Following her presentation, the commission reopened the floor to public testimony, which resumed more venomously than before.

“Nothing she says can be taken at any kind of — she says whatever she needs to say to do what she needs to do,” said Mark Sidmore.

Volcano resident Brian Daniels accused the measure of being a short-sighted lobbying effort by the hotel industry, but predicted that it will only reduce the number of visitors to the Big Island overall once it forces TARs to close and would-be tourists decide hotel rooms are too expensive.

West Hawaii TAR owner Martina Wing called the bill “gaslighting,” saying she initially believed in the good intentions of Kimball and the County Council as it was being drafted, but could only watch as they moved the bill forward despite outcry from residents.

Joshua Montgomery, president of the Ohana Aina Association, Big Island’s vacation rental association, said passing the bill on Thursday would be “malfeasance.”

“They need to go back and redraft this at least,” Montgomery later told the Tribune-Herald. “It’s malfeasance to do this now.”

For their part, the commissioners were divided on the matter.

Commissioner Matthias Kusch, himself a TAR owner, said the new regulations are “not that bad” and told critics “don’t be afraid of change,” which was echoed by fellow commissioner Chantel Perrin.

On the other hand, commission chair Dennis Lin and vice chair Louis Daniele were critical of the bill, with Daniele calling it “overreach” and saying it overcomplicates an issue that should be simple. He said he had a hard time understanding the bill, and expected members of the public will only be even more confused.

“I’m just thinking about people like my grandmother,” Lin said. “Can she write all this, draw her own site plan and her own floor plan, get her own (general excise) tax clearance, and go submit it to the Planning Department? I don’t think so. And those are the kind of people we’re looking at here who have the (TARs).”

Lin and Daniele echoed several testifiers in urging that an economic impact study be conducted to determine the bill’s potential long-term financial effects.

The commission then began discussing a line-by-line breakdown of recommended amendments by the Planning Department, but ultimately adjourned midway through that process at the meeting’s eight-hour mark.

Because it ran out of time, the commission did not address the related bills, 122 and 123, which also were postponed until May’s meeting. When the commission eventually makes a decision about any of those bills, they will return to the County Council for further deliberation; the Leeward Planning Commission will go through the same process on April 18.

Wing later told the Tribune-Herald that despite the tone of the meeting, she had some optimism the bill will be rejected.

“It’s just too much of a gut-punch for the residents,” Wing said. “There’s 7,000 families that rely on this. This is paying for my cancer treatment. This is my retirement.”

Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.