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Home My WebLink AboutCOM 0739.308 2016-2018 JtSYOFM, ... c q WilOkabe " ��, y Managing Director Harry Kim ; *i, :S;'7:i or Mayor _ Barbara J.Kossow +r'•:N— °.:•�`: Deputy Managing Director %.,,,;4 ,tf OF•MF'� ,inn±i of Cin ti't Office of fire Alavor 25 Aupuni Street,Suite 2603 • Hilo,Hawai`i 96720 • (808)961-8211 • Fax(808)961-6553 KONA. 74-5044 Me Keohokalole Hwy,Bldg.C • Kailua-Kona,Hawaii 96740 (808)323-4444 • Fax(808)323-4440 1 September 27, 2018 p = c--) a.c7 =cD —1 Na --<-4. Valerie T. Poindexter, Council Chair •4,4 CD–< and Members of the County Council -TIC) County of Hawai`i >rn 25 Aupuni Street ; Hilo, HI 96720 a. - Dear Council Chair Poindexter and Council Members: SUBJECT: County Council Initiated (Bill No. 108, Draft 4) Amendment to Chapter 25, Article 1, Article 2, Article 4, and Article 5 of the Hawaii County Code 1983 (2016 Edition, as Amended) Relating to Short-Term Vacation Rentals As required by Chapter 7,-Sec. 6-7.5 (a), Hawai`i County Charter, transmitted herewith for the County Council's consideration and action are the Windward and Leeward Planning Commissions' letters and enclosures regarding the above-referenced request. Sincerely, te_tn c(x-,..c HARRY KIWI Mayor Enclosures cc: Planning Department Comm. No. 731.30 ' Ref. To: PC- Ref. nate SEP 2 8 2018 County of Hawai`i is an Equal Opportunity Provider and Employer. ••BOJ F 1 O Harry Kim •� :n ' ' Joseph Clarkson, Chair y ,I �.,�;►`�� Donald Ikeda,Vice Chair Ma __ _ .r • Gilbert Aguinaldo Donn Dela Cruz '+ Tf OF'NF' • Thomas Raffipiy John Replogle County of Hawaii WINDWARD PLANNING COMMISSION Aupuni Center • 101 Pauahi Street,Suite 3 • Hilo,Hawai`i 96720 Phone(808)961-8288 • Fax(808)961-8742 SEP 2 7 2O1 Valerie T. Poindexter, Council Chair and Members of the County Council County of Hawai`i 25 Aupuni Street Hilo, HI 96720 Dear Chair Poindexter and Council Members: SUBJECT: County Council Initiated (Bill No. 108,Draft 4) Amendment to Chapter 25,Article 1,Article 2,Article 4, and Article 5 of the Hawaii County Code 1983 (2016 Edition, as Amended)Relating to Short- Term Vacation Rentals The Windward Planning Commission, at its duly held public hearing on September 6, 2018, considered County Council Initiated Bill No. 108,Draft 4, amending Chapter 25, Article 1, Article 2, Article 4, and Article 5, of the Hawai`i County Code 1983 (2016 Edition, as Amended)relating to Short-Term Vacation Rentals. The Commission voted to forward a favorable recommendation of Bill No. 108,Draft 4 to the County Council with the suggested revisions recommended by the Planning Director and the Commission. We are enclosing the Planning Director's Background and Recommendation report containing sixteen recommendations. Please be aware that the Commission voted to adopt a revision to Recommendation#14 to remove the requirement that the dwelling be permitted by the DPW- Building Division for an R-1 residential occupancy because the International Code Council provided an opinion to the Building Division that short-term vacation rentals are not considered as an R-1 occupancy in the 2006 IRC. Hawai`i County is an Equal Opportunity Provider and Employer Valerie T. Poindexter, Council Chair and Members of the County Council County of Hawai`i Page 2 The Windward Planning Commission made three recommendations as follows: 1. Change the initial registration fee from$250 to $500 and require annual registration for all short-term vacation rentals, not just those with a nonconforming use certificate. 2. Change the wording in the `nonconforming use certificate-prior use' section (Section 25-4- XX.1. (b))to add that the existing short term vacation rental operation must not have violated pertinent laws (i.e. building permits for a dwelling), must not have police reports or verified neighbor complaints, and have paid all County property taxes, State of Hawai`i general excise taxes (GET); and transient accommodations taxes(TAT). If they do not meet this criteria, the Director can deny the issuance of the initial nonconforming use certificate. Recommended language follows: (b)Prior Use. (1)The applicant seeking a short-term vacation rental nonconforming use certificate shall have the burden of proof in establishing that the property was in use prior to the effective date of this ordinance. Evidence of such use prior to the effective date of this ordinance shall include tax documents for the relevant time period, including: County property taxes, State of Hawai`i general excise tax(GET)filings; transient accommodations tax(TAT) filings; and federal and State of Hawai`i income tax returns. Other reliable information may also be provided. (2) Based on the evidence submitted, the director shall determine whether to issue a short-term vacation rental nonconforming use certificate for the short-term vacation rental. Issuance of the initial nonconforming use certificate may be denied if the director verifies any of the following: (A) The applicant has violated pertinent laws, such as not securing and finalizing necessary building permits for the dwelling; (B) The owner is delinquent in payment of County property taxes, State of Hawai`i general excise tax, and transient accommodations tax; or (C) Police reports or verified neighbor complaints of noise and other disturbances relating to the short-term rental operations. 3. Simplify the language in the `enforcement account' section(Section 25-4-XX.3. (c)) to say "This account shall be funded by all fees and fines collected pursuant to this section". Valerie T. Poindexter, Council Chair and Members of the County Council County of Hawai`i Page 3 The draft transcript of the hearing for your information will be sent at a later date under separate cover. Sincerely, ;` Joseph B. '•,B.DigitallyClarkson signed by Joseph Clarkson 11:2Date1:12:2018.09.25-10'00' Joseph Clarkson, Chairman Windward Planning Commission LCouncilinititedbillno 108draft4wpc Enclosures cc: Planning Department-Kona ,`OJ�SY OF{#14, HarryKim • Keith F. Unger, Chair Mayor ,,f;,`� ; Oliver"Sonny" Shimaoka,Vice Chair i' Nancy Carr Smith Scott Church f 0; IV' Perry Kealoha Michael Vitousek Faith"Faye"Yates County of Hawaii LEEWARD PLANNING COMMISSION Aupuni Center • 101 Pauahi Street,Suite 3 • Hilo,Hawai`i 96720 Phone(808)961-8288 • Fax(808)961-8742 SEP 272018 Valerie T. Poindexter, Council Chair and Members of the County Council County of Hawai`i 25 Aupuni Street Hilo, HI 96720 Dear Chair Poindexter and Council Members: SUBJECT: County Council Initiated (Bill No. 108,Draft 4) Amendment to Chapter 25,Article 1, Article 2,Article 4, and Article 5 of the Ilawai`i County Code 1983 (2016 Edition, as Amended) Relating to Short- Term Vacation Rentals The Leeward Planning Commission, at its duly held public hearing on September 20, 2018, considered County Council Initiated Bill No. 108, Draft 4, amending Chapter 25, Article 1, Article 2, Article 4, and Article 5, of the Hawai`i County Code 1983 (2016 Edition, as Amended)relating to Short-Term Vacation Rentals. The Commission voted to forward a favorable recommendation of Bill No. 108, Draft 4 to the County Council with the suggested revisions recommended by the Planning Director and the Commission. We are enclosing the Planning Director's Background and Recommendation report containing sixteen recommendations. Please be aware that the Commission voted to adopt a revision to Recommendation#14 to remove the requirement that the dwelling be permitted by the DPW- Building Division for an R-1 residential occupancy because the International Code Council provided an opinion to the Building Division that short-term vacation rentals are not considered as an R-1 occupancy in the 2006 IRC. Hawai`i County is an Equal Opportunity Provider and Employer Valerie T. Poindexter, Council Chair and Members of the County Council County of Hawai`i Page 2 The Leeward Planning Commission made five recommendations as follows: 1. That significantly expressed concern for adequate enforcement is funded adequately to ensure compliance. 2. Re-examine details of the registration process to a potential simplification, and consequently easier and more complete compliance. 3. Identify updated software that is adequate to properly administer the bill. 4. Continue to research ways to include high-density residential projects into permitted short- term vacation rental use. 5. Delete the requirement for a Use Permit in the RS zoning district by modifying the proposed language in Planning Director's Recommendation#5 to state the following under Section 25- 4 (a)(1)(C): "All zoning districts, except Open, situated in the General Plan Resort and Resort Node areas." The draft transcript of the hearing for your information will be sent at a later date under separate cover. Sincerely, Oliver"Sonny" Shimaoka, Vice Chair Leeward Planning Commission LCouncilinititedbillno 108draft4lpc2 Enclosures cc: Planning Department- Kona • BR-CCInitiated-Bill108-STVR.doc 8/31/18 COUNTY OF HAWAII PLANNING DEPARTMENT BACKGROUND AND RECOMMENDATION COUNTY COUNCIL INITIATED BILL NO. 108,DRAFT 4 AND AMENDMENT TO CHAPTER 25,ARTICLE 1,ARTICLE 2,ARTICLE 4, ARTICLE 5, OF THE HAWAI`I COUNTY CODE 1983 (2016 EDITION,AS AMENDED),RELATING TO SHORT-TERM VACATION RENTALS The County Council has referred Bill 108, Draft 4 to the Planning Director and the Windward and Leeward Planning Commissions for comment and recommendations. PURPOSE OF BILL 108,DRAFT 4 1. The Hawaii County Council has introduced Bill.No. 108,Draft 4 (Planning Department Exhibit 1),which seeks to amend Chapter 25 (Zoning Code), Article 1, Article 2, Article 4, and Article 5 of the Hawai`i County Code 1983 (2016 edition, as amended), relating to short-term vacation rentals (STVR's). 2. The purpose of this bill is to manage the impacts of these short-term vacation rentals by: 1) defining where this use will be allowed; 2) establishing provisions and standards to regulate this use; and 3)providing an avenue for an existing use deemed to be improper by this ordinance, to apply for a nonconforming use certificate that would allow them to continue to operate in a non-permitted district. A question and answer worksheet is provided to explain the proposed bill (Planning Department Exhibit 2). WHAT IS A SHORT-TERM VACATION RENTAL? 3. First it is important to be clear that Bill 108, Draft 4 does not seek to regulate all vacation rentals that are rented on a short-term basis. Bill 108 defines `short-term vacation rentals' as a dwelling unit of which the owner or operator does not reside on the building site,which has no more than five (5)bedrooms for rent on the building site, and is rented for a period of thirty consecutive days or less. The zoning code defines a `building site' as a parcel of land or lot. 4. Bill 108, Draft 4 only addresses rentals where an owner or operator does not live on the property. This bill does not cover the rental of a dwelling unit where an operator or owner lives on site, such as: -1- • Dwellings or other buildings where six(6) of more rooms are rented. These are considered hotels, inns or lodges in the zoning code, even if they occur within a dwelling. • Dwellings where no more than 5 bedrooms are rented for a period of 180 consecutive days (about 6 months) or less,when the owner or an operator resides on the building site. These are considered `hosted' short-term rentals and can include bed and breakfast establishments, or renting rooms of a dwelling on a short-term basis to not more than five (5)unrelated people,which is defined as a"family" in the zoning code. A bed and breakfast establishment allows up to 10 guests and the service of continental breakfast meals. • Dwellings rented on a long-term basis,which is typically 6 months or longer. WHERE ARE STVR'S PERMITTED? 5. The bill identifies the following zoning districts and areas where existing and new STVR's can operate as a permitted use: • Resort-Hotel (V)zoning district • General Commercial (CG) zoning district • Downtown Hilo Commercial District (CDH) zoning district • Village Commercial (CV)zoning district, with a Use Permit • All zoning districts within areas designated by the County General Plan as Resort or Resort Node, except that a Use Permit is required in the Single- Family Residential (RS)zoning district. Outside of these areas, new STVR's are not permitted but existing STVR's may continue to operate if the Planning Director issues a nonconforming use certificate. HOW ARE EXISTING STVR'S PERMITTED? 6. A subsection heading of the bill is titled `Registration of all short-term vacation rentals";however,the way the bill is written, it does not require registration of all STVR's.Upon adoption of this bill, owners of some,but not all, existing STVR's will be required to register or secure a nonconforming use certificate in order to -2- continue to operate. They will have 180 days (about 6 months) from the effective date of the ordinance to submit to the Planning Department(Department) either a registration form and associated fee or application for nonconforming use certificate. The bill specifically states that owners of existing STVR's in the V, CG, CDH zoning districts and General Plan Resort and Resort Node areas, in any district other than RS, will be required to pay a one-time registration fee of$250. The bill does not require owners of existing STVR's in the CV zoning district or RS district in General Plan Resort and Resort Node areas to register. Owners of existing STVR's outside of permitted zoning districts are also not required to register but instead will need to apply for a nonconforming use certificate. There is no fee when they apply for the initial nonconforming use certificate,but they will need to pay a$250 annual fee to renew the nonconforming use certificate. HOW ARE NEW STVR'S PERMITTED? 7. The bill requires registration of all new STVR's established in zoning districts where the use is pennissible,but the bill does not require registration for new STVR's that may be established outside of permissible zoning districts, such as in the County Agricultural (A) zoning district on land in the State Land Use Agricultural district with a Special Permit. REGISTRATION PROCESS 8. The registration process includes submitting a form to the Department with a site plan showing the location of the rooms for rent and requisite parking pursuant to section 25-4-51 of the zoning code, which requires one parking space for each rented bedroom in addition to one space for the dwelling unit if rooms are rented individually, or two parking spaces if the dwelling unit is rented as a whole. The STVR owner is also required to provide verification that State of Hawai`i general excise tax and transient accommodations tax licenses are in effect. Lastly, the owner must provide verification that a letter has been set to all surrounding owners and lessees within 300 feet of the property,notifying them about the details of the STVR operations, such as, the number of units being rented, maximum number of guests permitted,number and location of parking spaces, -3- and instructions of how to submit complaints to the Department about rental operations. 9. The bill requires that owners of STVR's notify the Director of ownership changes • or when a STVR establishment ceases to operate for any reason,but these provisions are under the"Registration of all short-term vacation rentals" section, so it is not clear if they apply to STVR's permitted via a nonconforming use certificate. 10. Any STVR that is not registered within the required deadlines is considered unpermitted and subject to penalties, until the STVR becomes properly registered and compliant with the requirements of the bill. NONCONFORMING USE CERTIFICATE PROCESS 11. Owners of existing STVR's located outside of a permitted zoning district must submit an application for a nonconforming use certificate to the Director within 180 days of the effective date of the ordinance, should this bill become law. The owner must provide evidence to prove that the STVR was in operation prior to the effective date of the ordinance. Evidence can include tax documents such as State of Hawai`i general excise tax filings, transient accommodations tax filings, and federal and state income tax returns. Based on the evidence submitted,the Director shall determine whether to issue a nonconforming use certificate. Current nonconforming use certificates must be displayed on the premises so that it is clearly visible to an inspector. 12. The bill indicates that a nonconforming use certificate may be issued for STVR's on land in the state land use Agricultural District,provided the lot existed before June 4, 1976.The reason for this date is that all dwellings on lots created after June 4, 1976 are considered by State law to be 'farm dwellings', which are to be used to house farm workers rather than vacationers. 13. Nonconforming use certificates must be renewed annually on or before the expiration date indicated on the certificate. A$250 filing fee is required with the renewal request. Renewal of the certificate may be denied by the Director for the following reasons: 1)the applicant has violated provisions of the bill or other pertinent laws, 2) the owner is delinquent in payment of County taxes, fees, fines, 74- or penalties assessed in relation to operation of the STVR, 3) the owner or reachable person has not been reachable, and 4) if there have been police reports or verified neighbor complaints of noise or other disturbance. The Director must deny renewal of a certificate if the use has been abandoned for any reason for a continuous period of twelve calendar months. 14. The Director must provide the decision to deny renewal of a certificate in writing and the owner may appeal the decision to the County Board of Appeals within 30 days of receipt of the decision. LOSS OF NONCONFROMING STVR's DUE TO EMERGENCY 15. The bill also includes a provision that requires the Director to assess the effect of the permanent loss of nonconforming STVR's when a declared emergency occurs, such as lava inundation. The Director can initiate legislative and administrative opportunities to restore losses in STVR capacity within the affected district. STANDARDS FOR OPERATION OF A STVR 16. The bill requires that all STVR's have an owner or `reachable' person that resides within the County.This person must be reachable by guests, neighbors and the County agencies on a 24 hour/7 days a week basis. The bill defines `reachable' as being able to respond via telephone to a request for his/her presence within 1 hour of receiving the request and being physically present at the STVR within 3 hours of receiving a call from a guest, neighbor, or County agency. The owner must notify the Department of any changes to the contact information for the `reachable' person. 17. All STVR's must abide by a good neighbor policy,which requires the owner or reachable person to make sure the activities taking place in the STVR conform to the character of the surrounding neighborhood. The policy must be displayed on the premises and included in the rental agreement. The policy includes: quiet hours from 9:00 p.m. to 8:00 a.m.; ensuring that sounds outside of quiet hours do not exceed what is normal for a residential area,prohibiting machines or devices that generate loud sounds, and ensuring that guests park onsite in designated parking areas. -5- 18. Other standards that all STVR's must abide by include: • Displaying on the back of the door of the sleeping quarters, a copy of the registration or nonconforming use certificate and the reachable person's name and phone number. • Including the registration number or nonconforming use certificate number on all forms of advertising of the STVR. • Complying with the Sign Code and parking requirements for STVR's. COMPLAINTS AND ENFORCEMENT 19. The bill requires the Director to receive and track complaints regarding STVR's, and provide information about STVR rules,policies and procedures to property owners, managers, neighbors, and the general public. The Director is also responsible for adopting rules of practice and procedure to implement the provisions of the bill. 20. To enforce the provisions of this bill,the inspectors will be able to rely on any advertising offering the property as a short-term vacation rental as evidence that a STVR is operating on the property. The burden of proof will be on the owner to establish that the STVR is being operated legally or the property is not being used as a STVR. 21. The bill proposes to establish a short-term vacation rental enforcement account administered by the Planning Director, for the purpose of enforcing this proposed short-term vacation rental law. The account will be funded by fees collected for registration of STVR's, fees collected for renewal of nonconforming use certificates, and fines collected from enforcement actions. PLANNING ANALYSIS OF THE IMPACTS OF BILL 108,DRAFT 4 In many communities across the country and state, new laws are being implemented to regulate vacation rentals for various reasons such as competition with hotels, removal of housing stock for long-term rentals, and negative impacts on surrounding neighborhoods. According to the Hawai`i Tourism Authority's 2015 Visitor Plant Inventory,these types of rentals may be fulfilling segments of market demand that have been underserved by Hawai`i's traditional visitor accommodations.These include the market for lower-priced accommodations and demand for accommodations in parts of -6- 1 the islands that appeal to visitors but do not have hotels. Thus, any proposed regulation of vacation rentals should be made thoughtfully so that the safety and convenience of surrounding neighbors is balanced with the economic benefits of providing a mix of visitor accommodations. It is uncertain what the overall effect of this bill will have on the economy of the island, which relies heavily on tourism,but it is apparent that this bill may have beneficial economic impacts in some areas (primarily resort zoning) and adverse economic impacts in other areas like agricultural areas and Volcano Village. One of the main economic engines of the County is the Hawai`i Volcanoes National Park. According to a National Park Service report, in 2017 there were 2,016,702 visitors to the park that spent$166 million in nearby communities, which supported 2,020 jobs in the local area and had a cumulative benefit to the local economy of$222,394,900. Should Bill 108, Draft 4 be adopted,there are only 3 vacant CV-zoned properties in Volcano Village where a new un-hosted short-term vacation rental would be permitted with a Use Permit. Exiting STVR's in and around Volcano Village could continue to operate with a nonconforming use certificate,but at some point in the future these will decline since the bill requires annual renewal of the certificate. If owners are not able to easily establish new STVR's to meet the demand for tourist accommodations near the park, instead they will likely establish a `hosted' rental to avoid,the fees and regulations imposed by Bill 108, Draft 4. As previously stated,this bill does not address `hosted' vacation rentals. The only type of hosted short-term vacation rental currently defined and regulated in the Zoning Code is a bed and breakfast establishment. B&B's allow up to ten guests in up to five bedrooms, and breakfast meals may be offered. Parking requirements for B&B's in the Zoning Code are similar to the parking requirements proposed in Bill 108, Draft 4 for STVR's. • All other `hosted' vacation rentals, that are not B&B's, are not defined or regulated in the Zoning Code,but needs to be since they have similar negative impacts on neighborhoods as `un-hosted' STVR's. These are single-family dwellings where the owner/operator resides and rents rooms on a short-term basis to no more than five(5) unrelated people,which is defined as a"family"in the zoning code. At some point in the -7- near future the County Council and/or Planning Department will need to consider initiating a bill to regulate all short-term vacation rentals,including `hosted' rentals. The proposed bill will have an impact on visitor accommodations on agricultural lands. Many visitors choose to stay on agricultural lands for the ambience and to experience agricultural or ecological tourism. Currently State land use law does not allow visitor accommodations in farm dwellings on lands in the state land use Agricultural District. All dwellings in the Agricultural District are considered farm dwellings, except for the first dwelling on lots created before June 4, 1976. Based on vacation rental statistics for the County it is likely that many hosted and un-hosted short-term vacation rentals currently operate in the Agricultural district without regard for State law. Since the Zoning Code currently does not define or regulate short-term vacation rentals, other than B&B's, these visitor accommodations have been established by landowners without any permitting requirements by the Department.Thus it is likely that visitor accommodations in farm dwellings,which do not conform to State law,will come to light and be instructed to cease operations when the Department investigates complaints as a result of this bill. Lastly,the bill does not require specific health and safety measures. In some communities, STVR regulations,require at a minimum that fire extinguishers, emergency plans for responding to natural disasters, and other basic safety measures be provided at the STVR. This is especially important since STVR's are `un-hosted' and guests will not be familiar with the structure or the surrounding community. The Fire Department and Building Division have provided memos indicating some safety standards. AGENCY COMMENTS PROVIDED 1. Department of Public Works- Building Division: P.D. Exhibit 3-Memo dated August 29,2018 2. Fire Department: P.D. Exhibit 4- Memo dated August 16,2018 3. Police Department: P.D.Exhibit 5-Memo dated August 8,2018 4. Department of Environmental Management: P.D. Exhibit 6-Memo dated August 10,2018 5. State Department of Land and Natural Resources: P.D.Exhibit 7-Memo dated August 16,2018 -8- AGENCIES-NO RESPONSE PROVIDED Department of Public Works-Engineering Division, Department of Public Works- Traffic Division, Department of Water Supply, Department of Parks and Recreation, Office of Housing and Community Development, Real Property Tax Office, State Department of Health, State Land Use Commission, State Office of Planning, State Department of Agriculture. PUBLIC COMMENTS PROVIDED 6. Unite Here! Local 5 Hawaii: P.D.Exhibit 8-Letter dated August 28,2018 RECOMMENDATION The Planning Director is generally supportive of the intent of Bill 108, Draft 4 and appreciates the time and effort the County Council has taken to draft legislation to regulate vacation rentals in Hawai`i County. The Director is recommending various revisions to Bill 108,Draft 4 to address housekeeping changes that are needed to implement the intent of Bill 108, Draft 4, and more substantive changes so that the regulation of short-term vacation rentals, as proposed, is consistent with other County and State land use laws. Lastly,the Director would like to draw attention to some unresolved issues, such as increasing fines and creating future legislation to address `hosted' short- term vacation rentals, in the hopes that these can be addressed at a later date by the County Council. The Planning Commissions may approve all, some, or none of the Director's suggested recommendations.The Commissions may also offer their own revisions to the bill. The Windward and Leeward Planning Commission's recommendations will be forwarded separately,but at the same time,to the County Council for their consideration and decision. Recommendation#1 Change the title of the bill and references of`short-term vacation rental' to `un-hosted short-term vacation rental'. Reason: The title and references are confusing because unless you are familiar with the -9- definition, the title implies the bill is related to both `hosted' and `un-hosted' short-term vacation rentals. Recommendation#2 Clarify the STVR definition to specifically state how the Intemal Revenue Code defines the short-term use of an owner's primary residence. Reason: Department enforcement staff and the public will not know what the Internal Revenue Code does and does not allow unless it is clearly stated in the definition. Recommendation#3 Add to the STVR definition that dwellings where more than five bedrooms are rented are defined in the zoning code as inns, lodges, or hotels. Reason: To make it easier for the public and staff to understand how visitor accommodations are defined without having to dig through the Zoning Code. Recommendation#4 In Section 25-4-XX(a)(1)(B),remove the requirement for a Use Permit to establish a new STVR in the CV zoning district. C' Reason: Most of the commercially-zoned areas within the small rural towns around the island, such as Honokaa, Hawi,Waimea, Pahoa, Kainaliu, and Honomu, consist of Village Commercial(CV)zoning. Land uses within these CV-zoned areas consist of transient accommodations such as hotels, inns, and B&B's along with many service- oriented commercial businesses like restaurants, art galleries, and general retail establishments, which rely on customers that are both residents and tourists in order to be successful.Use Permits are permits-granted by the Planning Commission after a public hearing to ensure there is adequate existing infrastructure to support the proposed use and to ensure the proposed use will not cause a substantial negative impact on the surrounding community. These rural villages typically have adequate infrastructure to support a range of commercial uses and STVR's would pose no different adverse impact than other commercial transient accommodations such as hotels,inns and B&B's. -10- Recommendation#5 Change Section 25-4-XX (a)(1)(C) as follows: (C) [- . .. ' - - .. . . . • - : - •- -- -- . . . - ., -. . . . ..- -- -. - . . . :-- -• .] All zoning districts, except Open, situated in the General Plan Resort and Resort Node areas, provided that a use permit is obtained in the RS zoning district. Reason: The General Plan LUPAG Map is meant to broadly show where various zoning districts should be located within the County. It is not meant to identify specific permitted land uses within the zoning districts. That was never the intent of the LUPAG Map.The suggested revised language would have the same intent as Bill 108, Draft 4 but would clearly reference the zoning districts rather than the General Plan designation.This would allow for STVR's to be listed in each `Permitted Use' section of the zoning code for each zoning district in the Resort and Resort Node areas. For example, section 25-5-32(a), (Permitted Uses for the RM district) of the Zoning Code, should state, "Short-term vacation rentals, in areas designated Resort and Resort Node by the General Plan". Recommendation#6 Add the following to Section 25-4-XX(a): "(3) Special Permits in the State land use agricultural district shall not be issued to permit short-term vacation rentals in farm dwellings since State law (HRS 205-4.5(a)(4)) requires farm dwellings be used to house farm workers rather than vacationers." Reason: State law allows the Planning Commissions to issue a Special Permit for any land use that is reasonable and unusual and is consistent with the State land use law related to lands within the state land use (SLU)Agricultural district, even if the land use is not specifically listed in the zoning code as a permitted use for that zoning district. Farm dwellings are all dwellings situated on lots created after June 4, 1976, and additional farm dwellings on lots created before June 4, 1976 in the SLU Agricultural district.They are defined as a single-family dwelling located on and used in connection with a farm or where agricultural activity provides income to the family occupying the dwelling. Since a -11- STVR, as defined in the bill, is `un-hosted', there would be no one onsite that would work on the farm or gain income from working on the farm.Typically,visitors that come to work on farms for an agricultural tourism experience, are staying in a `hosted;vacation rental,rather than a STVR. Recommendation#7 Reformat the proposed `Registration' subsection to require that all existing STVR's submit a registration form to the Department within 180 days of the effective date of the ordinance. Bill 108,Draft 4 does not require registration for existing STVR's in the CV zoning district, RS district in General Plan Resort and Resort Node areas, and areas outside the permitted zoning districts that will continue to operate with a nonconforming use certificate. Reason: If existing STVR's in these excluded areas are not required to register, then the Department will not have the opportunity to implement the other provisions in the `Registration' subsection such as verifying general excise tax and transient accommodations tax licenses are in effect and adequate parking is provided onsite. Recommendation#8 In Section 25-4-XX (b)(4), clarify that owners of STVR's shall notify the director when the STVR permanently ceases to operate. Reason: This clarity is needed so that STVR owner's only notify the Director when the STVR permanently ceases. Recommendation#9 Under the `Standards' section, consider removing or clarify the purpose of section(2)(C) which states"sound generated by any machine or device that is audible at a distance of fifty feet from the machine or device producing the sound is prohibited". Alternatively, we recommend replacing Reason: It is not clear what type of devices are prohibited. For example,it seems that equipment -12- used to maintain an STVR like lawn mowers and leaf blowers would be prohibited. The good neighbor policy previous to this one,which requires that sound audible beyond the property boundaries during non-quiet hours not be more excessive than what is normal for a residential area, seems to sufficiently address noises generated by guests during non-quiet hours,while still allowing for lawn mowers and the like to be used to maintain the property. Recommendation#10 In Section 25-4-XX(d), add a sentence instructing the Director to establish and maintain a list of all STVR's that have registered or received a nonconforming use certificate. Reason: In addition to a tracking STVR complaints, the Department should be responsible for keeping an up-to-date list of active, permitted STVR's throughout the County that the general public and other regulatory agencies,like the Building Division or the Fire Department, can refer to. Recommendation#11 Change section 25-4-XX(d)(2)to state, "The director shall adopt rules,in accordance with chapter 91, Hawai`i Revised Statute, for the purpose of implementing the sections of Chapter 25 related to short-term vacation rentals." Reason: The proposed language in the bill seems to only apply to creating rules for implementing the `Complaints and Public Information' subsection rather than all sections of zoning code related to STVR's. Recommendation#12 Reword Section 25-4-XX.1(c)to state, "Agricultural Lands. In the State land use agricultural district, a short-term vacation rental nonconforming use certificate may only be issued for single-family dwellings on lots created before June 4, 1976." Reason: This is to clarify that nonconforming use certificates will not be issued for STVR's on lots created after June 4, 1976 pursuant to State law,which requires that farm dwellings be used only to house farm workers. -13- Recommendation#13 Add the following to Section 25-4-XX.1(f)(2): "(E) The renewal request and renewal fee was not received on or before the expiration date indicated on the certificate." Reason: This will clarify that renewal requests received after the expiration date will not be renewed. Recommendation#14 To ensure that STVR's meet basic health and safety standards, consider adding requirements that the STVR comply with fire,building and sanitation codes. For example,to address the building code, a requirement in the `Registration' and `Nonconforming Use Certificate' sections could be added stating that a STVR may only be established within a dwelling for which the Department of Public Building Division has issued and finalized building, electrical and plumbing permits to be occupied as an R-1 residential occupancy. Reason: Both the Fire and Building Departments have provided memos indicating that health and safety standards should be considered in this bill. The building code identifies STVR's as an R-1 occupancy,rather than R-3 (permanent occupant onsite),because an owner/operator does not reside onsite. The R-1 occupancy requires among other things, fire sprinklers, commercial standards for exists/guards, accommodations for persons with disabilities (ADA), energy code compliance, and verification for building setbacks for fire separation. The bill should also consider the impact on staffing resources for the Fire and Building Departments, since it is likely that inspectors from these departments will be called out more frequently to inspect STVR's for code compliance. Recommendation#15 Create increased fines for violation of this bill. Reason: The Maui and Kauai County planning departments have informed the Director that because STVR's are a very profitable business,the fines need to be high enough to discourage violation of the STVR law. Current zoning code violation fines start at$100 -14- per day plus a one-time civil fine of$500. Housekeeping Recommendation#16 Add"short-term vacation rentals"to Article 7, Division 2, Section 25-7-22(a),to include short-term vacation rentals as a permitted use in the CDH, Downtown Hilo Commercial District. Reason: This is needed to conform to Section 2 of Bill 108,Draft 4,which permits short- term vacation rentals in the CDH district. For the reasons detailed above,the Planning Director recommends that the Planning Commissions send a favorable recommendation of Bill No. 108,Draft 4 to the County Council with the suggested revisions recommended by the Director. -15- Karen Eoff, Council Member •-�;i�r o=;,'• Dru M.Kanuha, Council Member Council District 8-North Kona o°�J •�' ••' �,' 18 ,eun€:Y isfbl.'79 C f'al Kona Phone:808/323-4280 1 / • Phone?8681323-4267 Email:karen.eoff@hawaiicounly.gov •:l . - plAtzla l:,dru.kpuha u. V nty.gov *--- -1--==--;-� COUNTY (ii- f-IAViAli r!oF•µ. HAWAII COUNTY COUNCIL County of Ha►vai'i West Hawai`i Civic Center,Bldg.A 74-5044 Ane Keohokalole Hity. , Kailua-Kona,Hawaii 96740 DATE: July 26,2018 TO: 1S✓ Michael Yee,Planning Director and Hawai`i County Leeward Adl and Windward Planning Commissions FROM: Karen Eoff, Council Member for Council District 8—North Kona Dru M. Kanuha, Council Member for Council District 7—Central Kona SUBJECT: Referral of Bill 108,Draft 4;AN ORDINANCE AMENDING CHAPTER 25, ARTICLE 1, ARTICLE 2,ARTICLE 4,AND ARTICLE 5,OF THE HAWAII COUNTY CODE 1983 (2016 EDITION,AS AMENDED),RELATING TO SHORT-TERM VACATION RENTALS. Pursuant to Section 25-2-43(b)of the Hawai`i County Code,the Council Committee on Planning voted in favor of referring Bill 108,Draft 4 to the Planning Director,and Leeward and Windward Planning Commissions for comments and recommendations. This referral directs the Planning Director and Leeward and Windward Planning Commissions to provide their respective comments and recommendations,through the Mayor,to the County Council within one-hundred twenty days of referral. Please return your comments and 1 recommendations to Council Chair Valerie T.Poindexter. Thank you for your attention to this matter. KE/wpb Attached: Bill 108,Draft 4 119704 Planning Dept. Exhibit I • Karen Eoff, Council Member .-•Mtr OF,,�•., Dru M.Kanuha, Council Member `?•.; •'•:t,'• Council District 7—Central Kona Council District 8-North Kona °� ;. 41.;;:' ` Phone:808/323-4267 Phone:808/323-4280 • : ` • ; �,�,� Email:dru.kanuha@hawaiicounty.gov Email:karen.eoff@hativaiicounty.gov ,mss HAWAII COUNTY COUNCIL County of Hawai`i West Hawaii Civic Center,Bldg.A Q' Gn 74-5044 Ane Keohokalole Hwy. c-- za Kailua-Kona, Hawaii 96740 —C 0- o--< DATE: July 25,2018 111TO: Valerie T.Poindexter,Council Chair v and Members of the Hawai`i County Council FROM: la,Karen Eoff,Council Member for Council District 8—North Kona Dru M.Kanuha, Council Member for Council District 7—Central Kona SUBJECT: Transmitting Bill No. 108,Draft 4;an Ordinance Amending Chapter 25,Article 1,Article 2,Article 4,and Article 5,of the Hawaii County Code 1983 (2016 Edition,as Amended),Relating to Short-Term Vacation Rentals. Attached please find Bill No. 108,Draft 4. During its meeting on July 24,2018,the Council's Planning Committee amended Bill No. 108, Draft 3 with the contents of Communication Nos. 739.229,739.143,739.231 and 739.234,resulting in this Draft 4. Thank you. KE/wpb Att. {?).‘11 toy DR,Lk) Comm.No. 3c\•304. Ref.To: P`pG Ref.Date Jul- 2 4 201a- .�Y Of h COUNTY OF 3AWAII -A-,--1),01-i STATE OF HAWAI . = . ; � r• �•of•µ BILL NO. 108 (DRAFT 4) ORDINANCE NO. AN ORDINANCE AMENDING CHAPTER 25,ARTICLE 1,ARTICLE 2,ARTICLE 4, AND ARTICLE 5, OF THE HAWAII COUNTY CODE 1983 (2016 EDITION,AS AMENDED),RELATING TO SHORT-TERM VACATION RENTALS. BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII: SECTION 1. Findings and Purpose. The short-term rental of residential units, as an alternative to traditional resort and hotel accommodations,is an emerging trend in the visitor industry that continues to grow in popularity. The purpose of this ordinance is to manage the impacts of these short-term vacation rentals by: 1)defining where this use will be allowed;2)establishing provisions and standards to regulate this use;and 3)providing an avenue for an existing use deemed to be improper by this ordinance,to apply for a nonconforming use certificate that would allow them to continue to operate in a non-permitted district. SECTION 2. Chapter 25,article 4,division 1,of the Hawai`i County Code 1983 (2016 Edition,as amended),is amended by adding the following new sections to be appropriately designated and to read as follows: "Section 25-4- . Short-term vacation rentals. (a) Short-term vacation rentals;where permitted,specific prohibitions. (1) Short-term vacation rentals shall be permitted in the: (A) V, CG, and CDH districts; (B) CV district,provided that a use permit is obtained for each use;and (C) General Plan Resort areas and Resort Node.except that RS districts in the General Plan Resort areas and Resort Node shall require a use permit. (2) Private covenants prohibiting use of any unit as a short-term vacation rental shall not be invalidated by this chapter. (b) Registration of all short-term vacation rentals. (1) Short-term vacation rentals in existence on or before the effective date of this ordinance: (A) Shall register with the planning department and pay a one-time fee of$250 to the director of finance,if they exist within the following zoning districts: (i) The V, CU,and CDFI; or (ii) The general plan resort areas and resort node,in any district other than RS. (B) The registration form and associated fee shall be submitted to the planning department no later than one hundred eighty days after the effective date of this ordinance. (2) Any new short-term vacation rental established in a zoning district after the effective date of this ordinance,where such use is permissible pursuant to this section, shall register with the director and pay a one- time fee of 5250 prior to use of such rental. (3) Owners of short-term vacation rentals shall register by submitting a form to the planning department in a format prescribed by the director. The registration form,at a minimum, shall require: (A) Verification that State of Hawai`i general excise tax and transient accommodations tax licenses are in effect; (B) Certification that the requisite amount of parking pursuant to section 25-4-51.is available; LC) Submittal of a site plan showing the location of the rooms for rent and requisite parking;and (D) Verification that notification letters have been sent to all owners and lessees of record of all lots of which any portion is within three hundred feet of any point along the perimeter boundary of the short-term vacation rental property.The notification letter shall provide detailed information about the short-term vacation rental operation including:number of units being rented; maximum number of guests permitted;number and location of required parking spaces:and instructions on how to submit complaints to the planning department about the subject rental operation. (4) Owners of short-term vacation rentals shall notify the director when a short-term vacation rental establishment ceases to operate for any reason. (5) Upon change in ownership,the new owner shall notify the director forthwith of the change in ownership and provide contact information for the reachable person.Registration shall automatically continue, subject to termination by the new owner. (6) Any short-term vacation rental that has not lawfully registered within the deadlines set forth in this section shall be considered an unpermitted use and subject to the penalties set forth in this chapter until such time proper registration and compliance with applicable requirements of this section is obtained. (c) Standards. All short-term vacation rentals shall be subject to the following standards: (1) The owner or reachable person shall reside in the County of Hawai`i and shall be reachable by guests,neighbors,and County 2 agencies on a twenty-four hour,seven days-per-week basis. The owner shall notify the planning department of any changes to their contact information forthwith. (2) Good neighbor policy. The owner or reachable person shall be responsible to ensure that activities taking place within the short- term vacation rental conform to the character of the existing neighborhood in which the rental is located. At a minimum,the following shall be prominently displayed within the dwelling unit and recited in the rental agreement signed by the tenant: (A) Quiet hours shall be from 9:00 p.m.to 8:00 a.m..during which time the noise from the short-term vacation rental shall not unreasonably disturb adjacent neighbors. (B) Sound that is audible beyond the property boundaries during non-quiet hours shall not be more excessive than would be otherwise associated with a residential area. (C) Sound generated by any machine or device that is audible at a distance of fifty feet from the machine or device producing the sound is prohibited. (D) Guest vehicles shall be parked in the designated onsite parking area. (3) All print and interne advertising of short-term vacation rentals, including listings with a rental service or real estate firm,shall include the registration or nonconforming use certificate number. (4) A copy of the registration or nonconforming use certificate,as well as the reachable person's name and phone number, shall be displayed in the back of the front door of the sleeping quarters. (5) Off-street parking shall meet the requirements set forth in section 25-4-51(a)(8)and applicable parking standards in this chapter. (6) Any commercial signage that advertises a short-term vacation rental shall comply with the requirements of section 22-2.6 and chapter 3 of this Code. _ (d) Complaints and public information. (1) The director shall: (A) Receive and track complaints regarding short-term vacation rentals; and (B) Provide information about rules.policies, and procedures pertaining to short-term vacation rentals to property owners, managers,neighbors, and the general public. (2) The director shall adopt rules,in accordance with chapter 91,klawai`i Revised Statutes,for the purpose of implementing this subsection. (e) Director duties in event of emergency. In the event of a declared emergency,natural or manmade,where a significant number of nonconforming short-term vacation rentals are permanently lost within any given judicial district.the director shall assess • • 3 • the effect of such loss upon the affected district and if deemed necessary, initiate legislative and administrative opportunities to restore such loss in short term vacation rental capacity within the district of origin. Section 25-4- .1.- Short-term vacation rental nonconforming use certificate. (a) The owner of any short-term vacation rental which operated outside of a permitted zoning districtprior to the effective date of this ordinance shall submit an application for a nonconforming use certificate to the director no later than one hundred eighty days after the effective date of this ordinance. (b) Prior Use. The applicant seeking a short-term vacation rental nonconforming use certificate shall have the burden of proof in establishing that the property was in use prior to the effective date of this ordinance. Evidence of such use prior to the effective date of this ordinance may include tax documents for the relevant time period,including: State of Hawai`i general excise tax filings; transient accommodations tax filings;and federal and State of Hawai`i income tax returns. Other reliable information may also be provided.Based on the evidence submitted,the director shall determine whether to issue a short-term vacation rental nonconforming conforminuse certificate for the short-term vacation rental. (c) Agricultural lands. A short-term vacation rental nonconforming use certificate may be issued for single-family dwellings on lots existing before June 4, 1976 located in the State land use agricultural district. (d) Display.•Current short-term vacation rental nonconforming use certificates shall be displayed in a conspicuous place on the premises that is readily visible to an inspector.In the event that a single address is associated with numerous nonconforming use certificates,a listing of all units at that address holding current certificates may be displayed in a conspicuous,readily visible common area instead. fie) Annual renewal. Nonconforming use certificates must be renewed every year on or before the expiration date indicated on the certificate. At the time of renewal the applicant shall pay a renewal fee of$250 to the director of finance. (f) Denial. (1) Renev'al of a nonconforming use certificate shall be denied if the director finds that the short-term vacation rental use has been abandoned pursuant to section 25-4-62. (2) Renewal may be denied if the director verifies any of the following: (A) The applicant has violated provisions of this section or other pertinent laws: 4 (B) The owner is delinquent in payment of County taxes,fees, fines,or penalties assessed in relation to the short-term vacation rental; (C) The owner or leachable person has not been reachable;or (D) Police reports or verified neighbor complaints of noise and other disturbances relating to the short-term vacation rental operations. (g) The decision by the director to deny renewal of a nonconforming use certificate shall require written notice to the property owner. (h) Appeal. Within thirty days after the receipt of the notice,the owner may appeal to the board of appeals asprovided by section 6-9.2, County Charter and sections 25-2-20 through 25-2-24. Section 25-4- .2. Prima facie evidence; short-term vacation rentals. Advertising of any sort that offers a property as a short-term vacation rental shall constitute prima facie evidence that a short-term vacation rental is operating on that property.The burden of proof shall be on the owner or operator to establish either that the property is not being used as a short-term vacation rental or that it is being used for such purpose legally. Section 25-4- .3 Short-term vacation rental enforcement account. (a) Pursuant to section 10-12,Hawai`i County Charter,a special fund to be known as the"short-term vacation rental enforcement fund"is created.This fund shall be administered by the director. (b) The purpose of the fund is to support efforts to enforce the County's short- term vacation rental law. (c) This account shall be funded by fees,collected in connection with: one-time registration fees for short-term vacation rentals pursuant to section 25-4 .(b); nonconforming use certificate renewal application fees pursuant to section 25-4 .1.(e);and fines. (d) The funds in this account shall be utilized to pay for expenses that facilitate enforcement of the County's short-term vacation rental enforcement law." 5 SECTION 3. Chapter 25,article 1, section 25-1-5,of the Hawai`i County Code 1983 (2016 Edition, as amended),is amended by adding new definitions to be appropriately inserted and to read as follows: ""Reachable"means being able to respond via telephone to a request from a guest,neighbor,or County agency for his or her presence within one hour of receiving that request and be physically present at the short term vacation rental within three hours of receiving a call from a guest,neighbor,or County agency,when that guest,neighbor,or County agency requests the presence of the reachable person." ""Short-term vacation rental"means a dwelling unit of which 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 thirty consecutive days or less. This definition shall not apply to the short-term use of an owner's primary residence as defined under the Internal Revenue Code." SECTION 4. Chapter 25,article 2,division 3,section 25-2-30,of the Hawaii County Code 1983 (2016 Edition, as amended), is amended to read as follows: "Section 25-2-30. Violations. Any approval or permit issued pursuant to the provisions of this chapter shall comply with all applicable requirements of this chapter. Failure to comply with any provision of this chapter.any rule adopted pursuant to this chapter,or with conditions imposed as part of any approval [er],permit, [including variances] or variance from the provisions of this chapter, shall constitute a violation of this chapter." SECTION 5. Chapter 25,article 2, division 6, section 25-2-61,of the Hawai`i County Code 1983 (2016 Edition, as amended),is amended by amending subsection(a)to read as follows: "(a) The following uses shall be permitted within designated County zoning districts only if a use permit'is obtained for the use from the commission: (1) Bed and breakfast establishments in RS,RA,FA, and A districts,provided that the property is within the state land use urban district. (2) Crematoriums,funeral homes,funeral services and mortuaries in RS,RD, RM,RCX,RA,FA,A and V districts. (3) Churches,temples and synagogues,including meeting facilities for churches, . temples, synagogues and other such institutions,in RS,RD,RM,RA,FA and A districts;provided that a minimum building site area of ten thousand square feet is required within the RS,RD,RM, and RA districts. (4) Day care centers in RS, RD,RM,RA,FA and A districts,provided that a minimum building site area of ten thousand square feet shall be required within the RS,RD,RM,and RA districts. 6 (5) Golf courses and related golf course uses including golf driving ranges,golf maintenance buildings,and golf club houses in the RS,RD,RM,RCX,RA, FA,A,V,CG, CV, and 0 districts,provided that the property is within the state land use urban or rural district. Golf courses and golf driving ranges shall not be permitted within the state land use agricultural district unless approved by the County before July 1,2005. (6) Group living facilities that exceed the criteria in subsection 25-1-5(b), paragraph(b)of the definition of"group living facility""in the RS,RD,RM, RCX,RA,FA,A,CN,CG,CV,and V districts. (7) Hospitals, sanitariums,old age,convalescent,nursing and rest homes,and other similar uses devoted to the care or treatment of the aged,the sick,or the infirm in the RS,RD,RM,RCX,RA,FA,A,and V districts,provided that a minimum building site area of ten thousand square feet shall be required within the RS,RD,RM,RCX and RA districts. (8) Major outdoor amusement and recreation facilities in RS,RD,RM,RCX,RA, A, CN,CG,CV,MCX,ML,MG and 0 districts. (9) Schools in RS,RD,RM,RA, FA,A,V,MCX,ML,and MG districts, provided that a minimum building site area of ten thousand square feet shall be required within the RS,RD,RM,and RA districts. (10) Short-term vacation rentals in the RS district in the general plan resort and resort node and in the CV district. (11) Telecommunication antennas and towers in RS,RD,RM,RCX,RA,FA,A, IA and 0 districts. [(11)](12) Yacht harbors and boating facilities in the RS,RD,RM,RCX,RA,V,CG, CV,MCX,ML,MG and 0 districts. [(12)](13) Wind energy facilities in the 0 district;provided that the property is within the state land use agricultural district. [(13)](14) Other unusual and reasonable uses which are not specifically permitted in any zoning district with the approval of the director and the concurrence of the council by resolution." SECTION 6. Chapter 25,article 5,division 1,section 25-5-3,of the Hawai`i County Code 1983 (2016 Edition,as amended),is amended by amending subsection(b)to read as follows: "(b) In addition to those uses permitted under subsection(a)above,the following uses may be permitted in the RS district,provided that a use permit is issued for each use: (1) Bed and breakfast establishments as permitted under section 25-4-7. (2) Care homes. (3) Churches,temples and synagogues. . (4) Crematoriums,funeral homes,funeral services,and mortuaries. (5) Day care centers. (6) Golf courses and related golf course uses,including golf driving ranges, golf maintenance buildings and golf club houses,provided that the property is within the state land use urban or rural district. Golf courses and golf driving 7 ranges shall not be permitted within the state land use agricultural district unless approved by the County before July 1,2005. (7) Hospitals,sanitariums,old age,convalescent,nursing and rest homes. (8) Major outdoor amusement and recreation facilities. (9) Schools. (10) Short-term vacation rentals in the general plan resort and resort node. (11) Telecommunication antennas and towers. [(11)](12) Yacht harbors and boating facilities." • SECTION 7. Chapter 25,article 5,division 12,section 25-5-122,of the Hawai`i County Code 1983 (2016 Edition, as amended),is amended by amending subsection(b)to read as follows: "(b) In addition to those uses permitted under subsection(a)above,the following uses may be permitted in the CV district,provided that a use permit is issued for each use: (1) Golf courses and related golf course uses, including golf driving ranges,golf maintenance buildings and golf club houses,provided that the property is within the state land use urban or rural district. Golf courses and golf driving ranges shall not be permitted within the state land use agricultural district unless approved by the County before July 1,2005_ (2) Major outdoor amusement and recreation facilities. (3) Short-term vacation rentals. (4) Yacht harbors and boating facilities." SECTION 8. Chapter 25,article 5,division 9, section 25=5-92,of the Ilawai`i County Code 1983 (2016 Edition, as amended),is amended by amending subsection(a)to read as follows: "(a) The following uses shall be permitted in the V district: (1) Adult day care homes. (2) Amusement and recreational facilities,indoor. (3) Art galleries,museums. (4) Automobile service stations. (5) Bars,night clubs and cabarets. (6) Bed and breakfast establishments, as permitted under section 25-4-7. (7) Business services. (8) Cemeteries and mausoleums,as permitted under chapter 6,article 1 of this • Code. (9) Churches,temples,and synagogues. (10) Commercial parking lots and garages. (11) Community buildings, as permitted under section 25-4-11. (12) Day care centers. . (13) Dwellings, double-family or duplex. 8 (14) Dwellings,multiple-family. (15) Dwellings,single-family. (16) Family child care homes. (17) Financial institutions. (18) Group living facilities. (19) Home occupations,as permitted under section 25-4-13. (20) Hotels. (21) Lodges. (22) Medical clinics. (23) Meeting facilities. (24) Major outdoor amusement and recreation facilities. (25) Model homes,as permitted under section 25-4-8. (26) Parks,playgrounds,tennis courts,swimming pools,and other similar open area recreational facilities. (27) Personal services. (28) Photography studios. (29) Public uses and structures, as permitted under section 25-4-11. (30) Restaurants. (31) Retail establishments. (32) Short-term vacation rentals. [(32)](331 Telecommunication antennas,as permitted under section 25-4-12. [(33)K341 Temporary real estate offices,as permitted under section 25-4-8. [(31)](35) Theaters. [(35)](36). Time share units. [(x](37) Utility substations,as permitted under[Section] section 25-4-11. [(37)(38) Visitor information centers." SECTION 9. Chapter 25,article 5,division 11, section 25-5-112, of the Hawai`i County Code 1983 (2016 Edition,as amended),is amended by amending subsection(a)to read as' follows: "(a) The following uses shall be permitted uses in the CG district: (1) Adult day care homes. (2) Amusement and recreation facilities, indoor. (3) Art galleries,museums. (4) Art studios. (5) Automobile service stations. (6) Automobile sales and rentals. (7) Bars,nightclubs and cabarets. (8) Bed and breakfast establishments, as permitted under section 25-4-7. (9) Boarding facilities,rooming,or lodging houses,provided that the maximum density shall be one thousand two hundred fifty square feet of land area per rentable unit or dwelling unit. (10) Broadcasting stations. (11) Business services. 9 (12) Car washing,provided that if it is mechanized,sound attenuated structures or sound attenuated walls shall be erected and maintained on the property lines. (13) Catering establishments. (14) Cemeteries and mausoleums,as permitted under chapter 6, article 1 of this Code. (15) Churches,temples and synagogues. (16) Cleaning plants using only nonflammable hydrocarbons in a sealed unit as the cleansing agent. (17) Commercial parking lots and garages, (18) Community buildings, as permitted under section 25-4-11. (19) Convenience stores. (20) Crematoriums,funeral homes,funeral services, and mortuaries. (21) Crop production. (22) Day care centers. (23) Display rooms for products sold elsewhere. (24) Dwellings,double-family or duplex,provided that the maximum density shall be one thousand two hundred fifty square feet of land area per rentable unit or dwelling unit. (25) Dwellings,multiple-family,provided that the maximum density shall be one thousand two hundred fifty square feet of land area per rentable unit or dwelling unit. (26) Dwellings,single-family. (27) Equipment sales and rental yards,and other yards where retail products are displayed in the open. (28) Family child care homes. (29) Farmers markets. When the vending activity in a farmers market involves more than just the sale of local fresh and/or raw produce,plant life, fish and local homegrown and homemade products for more than two days a week,the director,at the time of plan approval,shall restrict the hours of use, maintenance and operations and may require improvements as determined appropriate to ensure its compatibility with the existing character of the surrounding area. (30) Financial institutions. (31) Group living facilities. (32) Home occupations,as permitted under section 25-4-13. (33) Hospitals,sanitariums,old age,convalescent,nursing and rest homes and other similar uses. (34) Hotels. (35) Ice storage and dispensing facilities. (36) Laboratories,medical and research. (37) Laundries. (38) ` Light manufacturing,processing and packaging,where the only retail sales outlet for products produced is on the premises where produced. (39) Medical clinics. (40) Meeting facilities. (41) Model homes,as permitted under section 25-4-8. 10 (42) Neighborhood parks,playgrounds,tennis courts,swimming pools,and similar neighborhood recreational areas and uses. (43) Offices. (44) Personal services. (45) Photography studios. (46) Public uses and structures,as permitted under section 25-4-11. (47) Printing shops,cartographing and duplicating processes such as blueprinting or photostating shops. (48) Repair establishments,minor. (49) Restaurants. (50) Retail establishments.. (51) Schools. (52) Short-term vacation rentals. [(52)](53) Telecommunication antennas, as permitted under section 25-4-12. [(53)](54) Theaters. [(54)](55) Time share units. [(55)](56) Utility substations,as permitted under section 25-4-11. [(4)](57) Veterinary establishments." SECTION 10. Material to be repealed is bracketed and stricken. New material is underscored. In printing this ordinance,the brackets,bracketed and stricken material,and underscoring need not be included. SECTION 11. Severability. If any provision of this ordinance,or the application thereof to any person or circumstance,is held invalid,the invalidity does not affect other provisions or applications of the ordinance that can be given effect without the invalid provision or application, and to this end the provisions of this ordinance are severable. 11 414 g:11 C.:41 ri 1,PF.4 rirmft 4 A •tzTri Vairmtirir,tRentals -, 'EL e_ ci1s ancl ArtcwcArs August 16,2018 Planning Dept. Exhibit What is Short-Term Vacation Rental? "Short-Term Vacation Rental" is a dwelling unit of which: • the owner or an operator does not reside on the building site, • has no more than five bedrooms for rent on the building site, and • is rented for a period of thirty consecutive days or less. What Os the voce of this Short Term Varation Rental 1. Limit the conversion of the Island's much needed residential housing into visitor vacation accommodations and to protect the quality of life in local neighborhoods; 2. Encourage the preservation of workforce housing opportunities within the County's mixed-use, urban centers. 3. Identify appropriate Zoning Districts that best support the operation of Short Term Vacation Rentals; 4. Establish policies serving to permit and regulate single family and multi-family residential dwelling units that will be approved to operate as visitor accommodations; 5. Provide an opportunity for the continued operation of legal, pre- existing Short Term Vacation Rentals located outside of appropriate Zoning Districts through the granting of a Nonconforming Use Certificate; 6. Provide a process for the registration of all Short Term Vacation Rentals; 7. Adopt standards for the management of all Short Term Vacation Rentals. Are r mq vacation rent** �Jsitmh,ert A=9 the rvSSthiic ° • "Hosted" Short Term Vacation Rentals where the owner or operator resides on the building site are not subject to the provisions of this legislation. • Bed and Breakfast establishments as permitted and regulated by Hawaii County Code Section 25-4-7 and 25-4-51. • Transient rental of a "primary residence" (as defined by the Internal Revenue Code) while the owner is traveling is not subject to the provisions of this legislation. XrA t Wistricts Short Term Vacation Rentals be a permitted ; se? • Hawaii County Code, Chapter-25 Resort-Hotel (V), General Commercial (CG), and Downtown Hilo Commercial (CDH) Districts • General Plan Resort and Resort Node, except that Single Family Residential (RS) Districts within the Resort and Resort Node shall require the approval of a Use Permit by the Planning Commission • Hawaii County Code, Chapter 25-Village Commercial (CV) Districts shall require the approval of a Use Permit. ShOkfld t !T Ordinenr,e adonitedi 1mM + lepally- orterattinq Short Term Veretion Rentals located ogitslefe of a permitted on'inp nistrict furred to shvrt down? NO. Short Term Vacation Rentals, legally operating outside of a permitted Zoning District prior to the effective date of this ordinance, will have one hundred eighty (180) days after the effective date of this ordinance to apply for a Nonconffrminq Use Certificate (See #4, below) After the effective da -his, Ordinancey will all Short Term Vacation Rentals he regpi . - reOster . ? YES. 1. Existing vacation rentals shall register with the Planning Director within one hundred eighty (180) days from the adoption of this ordinance. 2. Future vacation rentals operating within appropriate Zoning Districts shall register with the Planning Director prior to beginning -- operation. 3. The registration for ALL short-term vacation rentals, at a minimum, shall require the following: A. Payment of $250 registration fee. B. Verification that a State of Hawaii GET License and a State TAT License are in effect. • State law requires the payment of General Excise Taxes on gross rental income. • State law also requires the payment of Transient Accommodation Tax from income generated by any Dwelling Unit rented for less than 180 days per year. C. Certification that the requisite amount of parking pursuant to Hawaii County Code section 25-4-51, is available; D. Submittal of a site plan showing the location of the rooms for rent and requisite parking; E. Verification that notification letters have been sent to all owners and lessees of record of all lots of which any portion is within three hundred feet of any point along the perimeter boundary of the short-term vacation rental property. F. The designation of a contact person who is available 24 hours a day, seven days a week, to address emergency issues related to the operation of the sort-term vacation • rental. This up-to-date information will be provided to the Planning Department. 4. To register an existing Short Term Vacation Rental located outside of a permitted Zoning District as a nonconforming use, the applicant shall provide the above items #1-3 A, B, C, D, E and F as well as the following: A. Evidence of Prior Use. In order to be eligible to continue operating as a nonconforming use, the operator must be able to demonstrate to the Planning Director that the dwelling unit had been generating income as a vacation rental prior to the effective date of this ordinance. This may include providing copies of relevant State of Hawaii general excise tax filings, relevant transient accommodations tax filings, Federal and/or State of Hawai'i income tax returns for the relevant time period, and receipts showing guest payments. Other reliable information may also be provided. B. Requirement for land located in the State Land Use Agricultural or Rural districts. (Required by State Law) In addition to the above, if the Short Term Vacation Rental unit is located in the State Land Use Agricultural or Rural districts, the applicant shall: • provide evidence that the building site existed prior to June 4, 1976, or • provide evidence that a special permit was issued by the Planning Commission within six months of the effective date of this ordinance. C. Based on the above requirements, the Planning Director shall determine whether to issue a Nonconforming Use Certificate. D. Annual Renewal. Short Term Vacation Rentals, who registered as a Nonconforming Use, must apply for renewal annually and pay a $250 renewal fee. Failure to secure annual renewal on a timely basis will result in loss of non-conforming status. S. To register an existing or future Short Term Vacation Rental within General Plan Resort and Resort Node, it shall comply with the above items #1-3 A, B, C, D, E, and F. In addition, the approval of a Use Permit shall be required if the building site is zoned Single Family Residential (RS). 6. To register an existing or future Short Term Vacation Rental within the Village Commercial (CV) District, it shall comply with the above items #1-3 A, B, C, D, E, and F. In addition, the approval of a Use Permit shall be required. What are, the per "ei !Standards r d for all Vara,tinn Rentals? 1. Good neighbor policy. The owner or reachable person shall be responsible to ensure that activities taking place within the short-term vacation rental conform to the character of the existing neighborhood in which the rental is located. At a minimum, the following shall be prominently displayed.within the dwelling unit and recited in the rental agreement signed by the tenant: (A) Quiet hours shall be from 9:00 p.m. to 8:00 a.m., during which time the noise from the short-term vacation rental shall not unreasonably disturb adjacent neighbors. (B) Sound that is audible beyond the property boundaries during non-quiet hours shall not be more excessive than would be otherwise associated with a residential area. (C) Sound generated by any machine or device that is audible at a distance of fifty feet from the machine or device producing the sound is prohibited. (D) Guest vehicles shall be parked in the designated onsite parking area. 2. All print and Internet advertising of short-term vacation rentals, including listings with a rental service or real estate firm, shall include the registration or nonconforming use certificate number. Any print and internet advertising lacking the registration or nonconforming use certificate number shall be in violation of HCC Chapter 25. 3. A copy of the registration or nonconforming use certificate, as well as the reachable person's name and phone number, shall be displayed in the back of the front door of the sleeping quarters. 4. Off-street parking shall meet the requirements set forth in Hawaii County Code section 25-4-51(a)(8) and applicable parking standards. 5. Any commercial signage that advertises a short-term vacation rental shall comply with the requirements of Hawaii County Code section 22-2.6 and chapter 3 of this Code. .4p,MtY�OF N��q±, Harry Kim .• � ��: Allan G.Simeon,P.E. _� . Diit c u/ Mayor Wil Okabe .°p'!<- Merrick H.Nishimoto,P.E. ,t/alleging Director Deport'Director Courtfu. of Paaf DEPARTMENT OF PUBLIC WORKS Aupuni Center 101 Pauahi Street,Suite 7 Hilo,Hawaii 96720-4224 (808)961-8321 •Fax(808)961-863D public works:6lumaiicounty.gov MEMORANDUM Date: August 29, 2018 To: Michael Yee Director, Department of Planning From: Allan G. Simeo _-�-✓ Director Re: Short Term Vacation Rental (STVR) The State Building Code defines Residential R-3 Occupancy as where occupants are permanent in nature, and may include: • Buildings that do not contain more than two dwelling units; • Adult facilities that provide accommodations for five or fewer persons of any agc for less than 24-hour; • Child care facilities that provide accommodations for five or fewer persons of any age for less than 24-hour; • Congregate living facilities with 16 or fewer persons. Residential occupancy, where an owner or manager does not permanently reside onsite, similar to a boarding house, hotel, motel, or as would apply to a STVR, is defined by code to be R-1 Occupancy which is considered a commercial occupancy and require among other things, fire sprinklers throughout, commercial standards with regard to exits/guards, accommodations for persons with disabilities (ADA), and energy code compliance_ It also requires an examination of building setbacks from property lines and adjacent structures to meet fire separation requirements beyond what may be allowed for an R-3 single family dwelling. STVR should be considered very carefully for compliance with the building codes before a licensing process is developed. • Cc: B. Kossow - Deputy Managing Director 7. Kamelamela- Corporation Council M. Nishimoto - Deputy Director D. Yamamoto - Division Chief County of Hawaii is an Equal Opportunity Provider and Employer Planning Dept. Exhibit 3 _ _ - _ _ • p°F."�+w'''1, Darren J.Rosario Harry Kim 'O•'C( j+l Fire Chief Mayor v ,\44:-. +� i V,:i%.; �, �, -1_;- , Lance S. Uchida ri1 'f�-P� :% Depuly Fire Chief Ilk1 4tf OrrN P�' r r r _ r�� aut�tp of t t ca,- HAWAI`I FIRE DEPARTMENT �� 25 Aupuni Street•Suite 2501•Hilo,Hawaii 96720 ._ __ (808)932-2900•Fax(808)932-2928 ---1 . t August 16, 2018 TO: MICHAEL YEE, PLANNING DIRECTOR FROM: DARREN J. ROSARIO, FIRE CHIEF ; SUBJECT: County Council Initiated(Bill No. 108, Draft 4) Amendment to Chapter 25,Article 1,Article 2, Article 4 and Article 5 of the Hawaii County Code 1983 (2016 Edition, as amended)Relating to Short-Term Vacation Rentals In regards to the above-mentioned County Council Initiated(Bill No. 108, Draft 4)relating to Short- Term vacation rentals, the following shall be in accordance: Providing a certificate of compliance from the Planning Department may infer that the facility is safe so a requirement for an annual or biennial inspection for fire and life safety should be considered.This would require increased manpower for the Fire Inspectors office. NFPA 1, UNIFORM FIRE CODE, 2006 EDITION Note: Hawaii Slate Fire Code, National Fire Protection Association 2006 version, with ('minty of Hawai'I amendments. County amendments are identified with ci preceding "C—"of the reference erence code. , Chapter 18 Fire Department Access and Water Supply 18.1 General. Fire department access and water supplies shall comply with this chapter. For occupancies of an especially hazardous nature, or where special hazards exist in addition to the normal hazard of the occupancy, or where access for fire apparatus is unduly difficult, or areas where there is an inadequate fire flow, or inadequate fire hydrant spacing, and the AHJ may require additional safeguards including, but not limited to, additional fire appliance units, more than one type of appliance, or special systems suitable for-the protection of the hazard involved. 18.1.1 Plans. 18.1.1.1 Fire Apparatus Access. Plans for fire apparatus access roads shall be submitted to the fire department for review and approval prior to constriction. eC rciflrkA ,1;-,--N+ I 2U 5 . .titr . = W Planning Dept• Hnu'ai'i Craftily is an Equal Opportunity Provider and Employer. Exhibit q Michael Yee August 16, 2018 Paget 18.1.1.2 Fire Hydrant Systems. Plans and specifications for fire hydrant systems shall be submitted to the fire department for review and approval prior to construction C— 18.1.1.2.1 Fire Hydrant use and Restrictions. No unauthorized person shall use or operate any Fire hydrant unless such person first secures permission or a permit from the owner or representative of the department, or company that owns or governs that water supply or system. Exception: Fire Department personnel conducting firefighting operations,hydrant testing, and/or maintenance, and the flushing and acceptance of hydrants witnessed by Fire Prevention Bureau personnel. 18.2 Fire Department Access. 18.2.1 Fire department access and fire department access roads shall be provided and maintained in accordance with Section 18.2. 18.2.2* Access to Structures or Areas. 18.2.2.1 Access Box(es).The AHJ shall have the authority to require an access box(es) to be installed in an accessible location where access to or within a structure or area is difficult because of security. 18.2.2.2 Access to Gated Subdivisions or Developments. The AHJ shall have the authority to require fire department access be provided to gated subdivisions or developments through the use of an approved device or system. 18.2.2.3 Access Maintenance.The owner or occupant of a structure or area, with required fire department access as specified in 18.2.2.1 or 18.2.2.2, shall notify the AHJ when the access is modified in a manner that could prevent fire department access. 18 2.3 Fire Department Access Roads. (*may be referred as FDAR) 18.2.3.1 Required Access. 18.2.3.1.1 Approved fire department access roads shall be provided for every facility,building, or portion of a building hereafter constructed or relocated. 18.2.3.1.2 Fire Department access roads shall consist of roadways, fire lanes,parking lots lanes, or a combination thereof. 18.2.3.1.3* When not more than two one- and two-family dwellings or private garages, carports, sheds, agricultural buildings, and detached buildings or structures 400ft2(37 m2) or less are present, the requirements of 18.2.3.1 through 18.2.3.2.1 shall be;permitted to be modified by the AHJ. Michael Yee August 16, 2018 Page 3 18.2.3.1.4 When fire department access roads cannot be installed due to location on property, topography, waterways,nonnegotiable grades,or other similar conditions, the AHJ shall be authorized to require additional fire protection features. 18.2.3.2 Access to Building. 18.2.3.2.1 A fire department access road shall extend to within in 50 ft(15 m) of at least one exterior door that can be opened from the outside that provides access to the interior of the building. Exception: 1 and 2 single-family dwellings. 18.2.3.2.1.1 When buildings are protected throughout with an approved automatic sprinkler system that is installed in accordance with NFPA 13,NFPA 13D, or NFPA 13R, the distance in 18.2.3.2.1 shall be permitted to be increased to 300 feet 18.2.3.2.2 Fire department access roads shall be provided such that any portion of the facility or any portion of an exterior wall of the first story of the building is located not more than 150 ft (46 in) from fire department access roads as measured by an approved route around the exterior of the building or facility. 18.2.3.2.2.1 Whenbuildings are protected throughout with an approved automatic sprinkler system that is installed in accordance with NFPA 13,NFPA 13D, or NFPA 13R, the distance in 18.2.3.2.2 shall be permitted to be increased to 450 ft(137 m). 18.2.3.3 Multiple Access Roads. More than one fire department access road shall be provided when it is determined by the AHJ that access by a single road could be impaired by vehicle congestion, condition of terrain, climatic conditions, or other factors that could limit access, 18.2.3.4 Specifications. 18.2.3.4.1 Dimensions. C-18.2.3.4.1.1 FDAR shall have an unobstructed width of not less than 20ft with an approved turn around area if the FDAR exceeds 150 feet. Exception: FDAR for one and two family dwellings shall have an unobstructed width of not less than 15 feet,with an area of not less than • 20 feet wide within 150 feet of the structure being protected. An approved turn around area shall be provided if the FDAR exceeds 250 feet. C- 18.2.3.4.1.2 FDAR shall have an unobstructed vertical clearance of not less then 13ft 6 in. Michael Yee August 16,2018 Page 4 C—18.2.3.4.1.2.1 Vertical clearances may be increased or reduced by the AHJ, provided such increase or reduction does not impair access by the fire apparatus, and approved signs are installed and maintained indicating such approved changes. 18.2.3.4.1.2.2 Vertical clearances shall be increased when vertical clearances or widths are not adequate to accommodate fire apparatus. C— 18.2.3.4.2 Surface.Fire department access roads and bridges shall be designed and maintained to support the imposed loads (25 Tons) of the fire apparatus. Such FDAR and shall be comprised of an all-weather driving surface. 18.2.3.4.3 Turning Radius. C-- 18.2.3.4.3.1 Fire department access roads shall have a minimum inside turning radius of 30 feet, and a minimum outside turning radius of 60 feet. 18.2.3.4.3.2 Turns in fire department access road shall maintain the minimum road width. 18.2.14.4 Dead Ends. Dead-end fire department access roads in excess of 150 ft(46 in) in length shall be provided with approved provisions for the fire apparatus to turn around. 18.2.3.4.5 Bridges. 18.2.3.4.5.1 When a bridge is required to be used as part of a fire department access road, it shall be constructed and maintained in accordance with county requirements. 18.2.3.4.5.2 The bridge shall be designed for a live load sufficient to carry the imposed loads of fire apparatus. 18.2.3.4.5.3 Vehicle load limits shall be posted at both entrances to bridges where required by the AHJ. 18.2.3.4.6 Grade. • C— 18.2.3.4.6.1The maximum gradient of a Fire department access road shall not exceed 12 percent for unpaved surfaces and 15 percent for paved surfaces. In areas of the FDAR where a Fire apparatus would connect to a Fire hydrant or Fire Department Connection, the maximum gradient of such area(s)shall not exceed 10 percent. 18.2.3.4.6.2* The angle of approach and departure for any means of fire department access road shall not exceed 1 ft drop in 20 ft(0.3 m drop in 6 in) or the design limitations of the fire apparatus of the fire department, and shall be subject to approval by the AHJ. Michael Yee August 16, 2018 Page 5 18.2.3.4.6.3 Fire department access roads connecting to roadways shall be provided with curb cuts extending at least 2 ft (0.61 m) beyond each edge of the fire lane. 18.2.3.4.7 Traffic Calming Devices.The design and use of traffic calming devices shall be approved the AHJ. 18.23.5 Marking of Fire Apparatus Access Road. 18.2.3.5.1 Where required by the AHJ, approved signs or other approved notices shall be provided and maintained to identify fire department access roads or to prohibit the obstruction thereof of both. 18.2.3.5.2 A marked fire apparatus access road shall also be known as a fire lane. 18.2.4* Obstruction and Control of Fire Department Access Road. 18.2.4.1 General. 18.2.4.1.1 The required width of a fire department access road shall not be obstructed in any manner, including by the parking of vehicles. 18.2.4.1.2 Minimum required widths and clearances established under 18.2.3.4 shall be maintained at all times. 18.2.4.1.3* Facilities and structures shall be maintained in a manner that does not impair or impede accessibility for fire department operations. 18 2.4.1.4 Entrances to fire departments access roads that have been closed with gates and barriers in accordance with 18.2.4.2.1 shall not be obstructed by parked vehicles. 18.2.4.2 Closure of Accessways. 18.2.4.2.1 The AHJ shall be authorized to require the installation and maintenance of gates or other approved barricades across roads, trails, or other accessways not including public streets, alleys, or highways 18.2.4.2.2 Where required, gates and barricades shall be secured in an approved manner. 18.2.4.2.3 Roads, trails, and other access ways that have been closed and obstructed in the manner prescribed by 18.2.4.2.1 shall not be trespassed upon or used unless authorized by the owner and the AHJ. • - Michael Yee August 16, 2018 Page 6 18 2.4.2.4 Public officers acting within their scope of duty shall be permitted to access restricted property identified in 18.2.4.2.1. 18.2.4.2.5 Locks, gates, doors,barricades, chains, enclosures, signs, tags, or seals that have been installed by the fire department or by its order or under its control shall not be removed, unlocked, destroyed, tampered with, or otherwise vandalized in any manner. 18.3 Water Supplies and Fire Hydrants 18.3.1* A water supply approved by the county, capable of supplying the required fire flow for fire protection shall be provided to all premises upon which facilities or buildings, or portions thereof, are hereafter constructed, or moved into or within the county. When any portion of the facility or building is in excess of 150 feet(45 720 mm) from a water supply on a fire apparatus access road, as measured by an approved route around the exterior of the facility or building, on- site fire hydrants and mains capable of supplying the required fire flow shall be provided when required by the AHJ. For on-site fire hydrant requirements see section 18.3.3. EXCEPTIONS: I. When facilities or buildings, or portions thereof, are completely protected with an approved automatic fire sprinkler system the provisions of section 18.3.1 may be modified by the AHJ. 2. When water supply requirements cannot be installed due to topography or other conditions, the AHJ may require additional fire protection as specified in section 18.31 as amended in the code. 3. When there are not more than two dwellings, or two private garage, carports, sheds and agricultural. Occupancies, the requirements of section 18.3.1 may be modified by AHJ. 18.3.2* Where no adequate or reliable water distribution system exists,approved reservoirs, pressure tanks, elevated tanks, fire department tanker shuttles, or other approved systems capable of providing the required fire flow shall be permitted. 18.3.3* The location, number and type of fire hydrants connected to a water supply capable of delivering the required fire flow shall be provided on a fire apparatus access road on the site of the premises or both, in accordance with the appropriate county water requirements. 18.3.4 Fire Hydrants and connections to other approved water supplies shall be accessible to the fire department. 18.3.5 Private water supply systems shall be tested and maintained in accordance with NFPA 25 or county requirements as determined by the AHJ. Michael Yee August 16, 2018 Page 7 18.3.6 Where required by the AHJ, fire hydrants subject to vehicular damage shall be,protected unless located within a public right of way. 18.3.7 The AHJ shall be notified whenever any fire hydrant is placed out of service or returned to service. Owners of private property required to have hydrants shall maintain hydrant records of approval, testing, and maintenance, in accordance with the respective county water requirements. Records shall be made available for review by the AHJ upon request. C-- 18.3.8 Minimum water supply for buildings that do not meet the minimum County water standards: Buildings up to 2000 square feet, shall have a minimtun of 3,000 gallons of water available for Firefighting. Buildings 2001- 3000 square feet, shall have a minimum of 6,000 gallons of water available for Firefighting. Buildings, 3001- 6000 square feet,shall have a minimum of 12,000 gallons of water available for Firefighting. Buildings, greater than 6000 square feet, shall meet the minimum County water and fire flow requirements. Multiple story buildings shall multiply the square feet by the amount of stories when determining the minimum water supply. Commercial buildings requiring a minimum fire flow of 2000gpm per the Department of Water standards shall double the minimum water supply reserved for firefighting. Fire Department Connections (FDC) to alternative water supplies shall comply with 18 3 8 (1)- (6) of this code. NOTE: In that water catchment systems are being used as a means of water supply for firefighting,such systems shall meet the following requirements: 1) In that a single water tank is used for both domestic and firefighting water, the water for domestic use shall not be capable of being drawn from the water reserved for firefighting; Michael Yee August 16,2018 Page 8 2) Minimum pipe diameter sizes from the water supply to the Fire Department Connection (FDC)shall be as follows: a) 4" for C900 PVC pipe; b) 4" for C906 PE pipe, c) 3" for ductile Iron, d) 3' for galvanized steel. 3) The Fire Department Connection (FDC) shall: a) be made of galvanized steel; b) have a gated valve with 2-1/2 inch,National Standard Thread male fitting and cap; c) be located between 8 ft and 16 ft from the Fire department access. The location shall be approved by the AHJ; cl) not be located less than 24 inches, and no higher than 36 inches from finish grade, as measured from the center of the FDC orifice; e) be secure and capable of withstanding drafting operations. Engineered stamped plans may be required; f) not be located more than 150 feet of the most remote part,but not less than 20 feet, of the structure being protected; g) also comply with section 13.1.3 and 18.2.3.4.6.1 of this code. 4) Commercial buildings requiring a fire flow of 2000gpm shall be provided with a second FDC. Each FDC shall be independent of each other, with each FDC being capable of flowing 500gpm by engineered design standards. The second FDC shall be located in an area approved by the AHJ with the idea of multiple Fire apparatus'conducting drafting operations at once, in mind. 5) Inspection and maintenance shall be in accordance to NFPA 25. 6) The owner or lessee of the property shall be responsible for maintaining the water level, quality, and appurtenances of the system. EXCEPTIONS TO SECTION 18.3.8: 1) Agricultural buildings, storage sheds, and shade houses with no combustible or equipment storage. 2) Buildings less than 800 square feet in size that meets the minimum Fire Department Access Road requirements. Michael Yee August 16,2018 Page 9 3) For one and two family dwellings, agricultural buildings, storage sheds, and detached garages 800 to 2000 square feet in size, and meets the minimum Fire Department Access Road requirements, the distance to the Fire Department Connection may be increased to 1000 feet. 4) For one and two family dwellings, agricultural buildings, and storage sheds greater than 2000square feel, but less than 3000 square feet and meets the minimum Fire Department Access Road requirements, the distance to the Fire Department Connection may be increased to 50() feet_ 5) For buildings with an approved automatic sprinkler system, the minimmn water supply required may be modified_ If there are any questions regarding these requirements,please contact the Fire Prevention Bureau at(808) 932-2911. DARREN J. ROSARIO Fire Chief RP:ds Harry Kim Paul K.Ferreira Mayor Police Chief 17Tf OF HF'�*' Kenneth Bugado Jr. Deputy Police Chief County of Hawai'i POLICE DEPARTMENT 349 Kapiolani Street • Hilo,Hawai'i 96720-3998 (808)935-3311 • Fax(808)961-8865 Wit` terQ ; August 8, 2018 TO : MICHA Y E PLAN/ ING DIRE TOR _ t•v FROM : MITCH LL K. KANEHAILUA, I;'., ASSISTANT POLICE CHIEF AREA 1 OPERATIONS BURE SUBJECT: COUNTY COUNCIL INITIATED (BILL NO. 108 DRAFT 4) AMENDMENT TO CHAPTER 25, ARTICLE 1, ARTICLE 2, ARTICLE 4, AND ARTICLE 5 OF THE HAWAII COUNTY CODE 1983 (2016 EDITION, AS AMENDED) RELATING TO SHORT TERM VACATION RENTALS CLAUSE Staff, upon reviewing the correspondence, has no additional comments. Thank you for allowing us the opportunity to comment. If you have any questions, 'please contact Captain Gregory M. Esteban, South Hilo Patrol District Commander, at (808)961-2214 or via e-mail at gregory.esteban c@i,hawaiicounty.gov. GE:Hi/180624 SC �C - 9 7013 13 Planning Dept. "Hawai'i County is an Equal Opportunity Provider and Employer" Exhibit h., Harry Kim • `:.} Ufa William A.Kucharski Mayor .; ��:�//• Director Wilfred M.Okabe •�f''' ��:.�� Diane A.Noda lE Of�M' Managing Director Deputy Director CrODUN f 74a xai`i DEPARTMENT OF ENVIRONMENTAL MANAGEMENT r„ 345 Kekuanao`a Street,Suite 41 •Hilo,Hawaii 96720 Ph:(808)961-8083•Fax:(808)961-8086 • cohdem@co.hawaii.hi.us co.hawaii.hi.us http://www.hawaiicounty.gov/environmental-management/ :7 MEMORANDUM __ TO: Michael Yee,Director H 'c1 Planning Department FROM: William A.Kucharski,Director 1 Environmental Management De..r -•�t • DATE: August 10,2018 SUBJECT: County Council Initiated (Bill 108, Draft 4) Amendment to Chapter 25,Articles 1, 2,4, and 5 of the Hawai`i County Code 1983 (2016 Edition, as Amended) Relating to Short-Term Vacation Rentals Bill 108, Draft 4,has been reviewed by the Solid Waste Division and Wastewater Division of the Department of Environmental Management pursuant to your memo dated July 30,2018. The Department of Environmental Management has no comments on the bill. Thank you. WK:mef :MR5 1 3 201a County of Hawaii is an Equal Opportunity Provider and Employer Planning Dept. Exhibit (D �eF O F t SUZANNE D.CASE. .... DAVID Y.IGE /49: i�5.j.•'•-•,;\ CHAIRPERSON GOVERNOR OF HAWAII '114:!,0 ' BOARD OF LAND AND NATURAL RESOURCES 1':,o-�... _a f. -- COMMISSION ON WATER RESOURCE r '7' MANAGEMENT sand A STATE OF HAWAII AW-; 'r,,reofHaws DEPARTMENT OF LAND AND NATURAL RESOURCES LAND DIVISION POST OFFICE BOX 621 . HONOLULU,HAWAII 96809 August 16,2018 County of Hawaii Planning Department Attention: Ms. Maija Jackson via email: ptanninq(u?hawaiicounty.gov 101 Pauahi Street, Suite 3 Hilo, Hawaii 96720 Dear Ms. Jackson: SUBJECT: County Council Initiated Bill No. 108, Draft 4, An Ordinance Amending Chapter 25, Article 1, Article 2, Article 4, and Article 5 of the Hawaii County Code 1983 (2016 Edition, as amended) Relating to Short-Term Vacation Rentals located at Central Kona, Island of Hawaii Thank you for the opportunity to review and comment on the subject matter. The Land Division of the Department of Land and Natural Resources (DLNR) distributed or made available a copy of your request pertaining to the subject matter to DLNR's Divisions for their review and comments. At this time, enclosed are comments from the (a) Division of State Parks and (b) Land Division — Hawaii District on the subject matter. Should you have any questions, please feel free to call Darlene Nakamura at (808) 587-0417. Thank you. Sincerely, Russell Y. Tsuji Land Administrator Enclosures cc: Central Files Planning Dept. Exhibit 7 . L:, SUZANNE:D.CASE DAVID V.1GE ?: 1959,:'t y CHAIRPERSON GOVERNOR Oh HAWNI 0? _ BOARD OF LAND AND NATURAL RESOURCES c „tt_ COMMISSION ON WATER RESOURCE •riT^�,.{H.t: m`"•i�` .• tI L \L\N.-lCE\TF.�'T o4`and and� a c l•�L•i,,�%;.[1�r fes: ;rj'' ,,!� - ;V r. n S 1 ATL OF HAVVVI MI6 sdtc oFN.'+� DEPARTMENT OFLAND ANI)NATURAL RESOURCES LAND DIVISION POST OFFICE BOX 621 HONOLULU,HAWAII 96809 August 3, 2018 __7 MEMORANDUM . TO: DLNR Agencies: =s' = X Div. of Aquatic Resources - . _Div. of Boating & Ocean Recreation X Engineering Division - • X Div. of Forestry &Wildlife X Div. of State Parks X Commission on Water Resource Management X Office of Conservation & Coastal Lands X Land Division — Hawaii District X Historic Preservation FROM: Russell Y. Tsuji, Land Administrator SUBJECT: County Council Initiated Bill No. 108, Draft 4, An Ordinance Amending Chapter 25, Article 1, Article 2, Article 4, and Article 5 of the Hawaii County Code 1983 (2016 Edition, as amended) Relating to Short-Term Vacation Rentals LOCATION: Central Kona, Island of Hawaii" APPLICANT: County of Hawaii, Planning Department of behalf of Hawaii County Council Transmitted for your review and comment is information on the above-referenced subject matter. We would appreciate your comments by August 14, 2018. If no response is received by this date, we will assume your agency has no comments. If you have any questions about this request, please contact Darlene Nakamura at 587-0417. Thank you. ( ) We have no objections. ( ✓)'We have no comments. ( ) Comments are a tached. Signed: rr Print Name: C '1 4 Cel C-- Date: ddb Attachments cc: Central Files -6—,4 pFt SUZANNE D.CASE 'i ..•..•;.., CHAIRPERSON DAVID Y AGE• ,U BOD OFLAND AND NATURAL RESOURCES GOVERNOR OF HAWAP I. :, %'`: -_ COMMISSION ON WATER RESOURCE MANAGEMENT At. U��rj� .•:3;' ' "[t °, STATE OF HAWAII DEPARTMENT OF LAND AND NATURAL RESOURCES 'trate LAND DIVISION POST OFFICE BOX 621 HONOLULU,HAWAII 96809 r- 3> August 3, 2018 r-xa � �' zC3m co MEMORANDUM 3?,< TO: DLNR Agencies: r :4 X Div. of Aquatic Resources Div. of Boating &Ocean Recreation X Engineering Division X Div. of Forestry &Wildlife X Div. of State Parks X Commission on Water Resource Management X Office of Conservation & Coastal Lands X Land Division— Hawaii District X Historic Preservation FROM: Russell Y.Tsuji, Land Administrator SUBJECT: County Council Initiated Bill No. 108, Draft 4,An Ordinance Amending Chapter 25,Article 1, Article 2,Article 4, and Article 5 of the Hawaii County Code 1983 (2016 Edition, as amended) Relating to Short-Term Vacation Rentals LOCATION: Central Kona, Island of Hawaii APPLICANT: County of Hawaii, Planning Department of behalf of Hawaii County Council Transmitted for your review and comment is information on the above-referenced subject matter. We would appreciate your comments by August 14, 2018. If no response is received by this date, we will assume your agency has no comments. If you have any questions about this request, please contact Darlene Nakamura at 587-0417. Thank you. ( ) ___We-have no objections. ( We have no comments. ( ) Comments are attached. Signed: Print Name: /17‘177' Date: 1�. /2 Attachments 8 f i��i g cc: Central FilesA) 808 941 2166 Unite Here Local 5* UniteHere Local 5* 05:35:23 p.m. 08-28-2018 :.• .,„ - HAWAII --. } J• FACSIMILE TRANSMITTAL SHEET -- _ • TO: FROM: t. • - . WINDWARD PLANNING CADE WATANABE COMMISSION UNITE HERE Local 5 COMPANY: DATE: COUNTY OF HAWAII TUESDAY,AUGUST 28,2018 i �1 FAX NUMBER: TOTAL NO.OF PAGES INCLUDING 808-961-8742 COVER: 7 RE: WINDWARD PLANNING COMMISSION HEARING 0 URGENT ❑FOR REVIEW 0 PLEASE COMMENT 0 PLEASE REPLY NOTES/COMMENTS: PLEASE FIND ATTACHED TESTIMONY ON BEHALF OF UNITE HERE Local 5 RE:BILL 108,DRAFT 4 WINDWARD PLANNING COMNIISSION HEARING THURSDAY,SEPTEMBER 6,2018 9:00 A.M. 1516 S.KING—g1', HONOLULU i1�WAII '96g 6 - PHONE (808) 941-2141 FAX (808) 941-2166 120166 Planning Dept. Exhibit S 808 941 2166 Unite Here Local 5* UniteHere Local 5* 05:36:12 p.m. 08-28-2018 2/7 .•5. UNITE HERE! LOCAL 5 HAWAII F1x W Gia Fnarxlal Sarela4TTooswor Germm G.VitturtEin.Resident GodtreyMaesrwr,Serax Wu-President Tuesday,August 28,2018 Windward Planning Commission County of Hawaii Aupuni Center 101 Pauahl Street,Suite 3 Hilo,H196720 Re:Testimony on Bill 108,Draft 4 relating to short-term vacation rentals Chair Clarkson,Vice Chair Ikeda and Commission Members, UNITE HERE Local 5,a local labor organization representing 11,000 hotel,health care and food service workers throughout Hawaii,would like to offer comments relating to - Bill 108,Draft 4, First,we would like to thank the Council and the Commission for continuing the process of addressing the issue of short-term vacation rentals and their impact on our local people. As the process continues we would like to offer a few recommendations for your - consideration,and in particular point out the need for addressing hosting platforms and their direct correlation with protecting our neighborhoods which is currently missing from Bill 108,Draft 4. Each month an estimated average of 399 new vacation rentals get listed online somewhere in Hawaii,and an estimated 40,000 homes statewide will soon be used as vacation rentals. As a result of the growing concern over the loss of housing,jobs and the preservation of local neighborhoods,sensible legislation in San Francisco,Santa Monica and in places like Los Angeles—even here in Hawaii-have all moved towards including clear requirements for transparency by hosting platforms. Some cities around the world have even gone as far as to ban the operation of companies like AirBnb—at least momentarily—to address their community needs. When the regulation of hosting platforms are not addressed in legislation,the ability for local municipalities to curb illegal activity only becomes more difficult because the vast majority of short-term vacation rentals are offered through such platforms like AirBnb, VRBO,HomeAway,etc. Enforcement will be impossible if the County does not compel platforms to share their data so that real accountability can take place. For instance, 1 • 1516 South King Street,Honolulu Hawaii 96826-1912.808-941-2141-www.unitehere5.org 808 941 2166 Unite Here Local 5* UniteHere Local 5* 05:36:37 p.m. 08-2872018 3/7 and regarding the section in Bill 108 on"prima fade evidence"-while it may sound good. it doesn't account for what we know and have seen across the country. The advertisement may not show the address so how will it be proven that it's being used as a STR? When the regulation of hosting platforms are not addressed,the negative impact on our housing inventory only worsens because the majority of listings on platforms are for entire homes. For example,a recent report by CBRE found that 81%of the revenue generated on AirBnb was from hosts renting out entire home units.1 While vacation rentals offer supplemental income for some today,they are increasingly2 becoming unregulated,illegal businesses for owners of multiple properties. When the regulation of hosting platforms are not addressed,the County's ability to properly plan for safety and disaster management becomes difficult—note the flooding on Kauai and of course our own challenges here on the Big Island with the ongoing lava flow. If platforms are not compelled to share their data,the County is at a disadvantage in terms of its disaster preparedness. No one really knows who is staying where and how many are staying at one location at any given point. In fact,the lack of regulation on hosting platforms and the resulting unintended consequences of laws that fail to compel hosting platforms to be transparent with their data was one of the reasons Governor Ige vetoed HB 1850 in 2016—a bill that AirBnb attempted to sneak past us all. It would have pre-empted the Counties ability to pass meaningful legislation at the local level while shielding all illegal operators by permitting itself(AirBnb)to serve as a tax collector on behalf of its participating hosts. While some may argue that tackling the issue of short-term vacation rentals is complex, it doesn't have to be. It really doesn't;if we focus on effective enforcement first—and that requires the regulation of hosting platforms like AirBnb,VRBO,HomeAway and other rental services. If we want to stop mini-hotels in our neighborhoods,then we must include the regulation of hosting platforms now. As a local boy,born and raised on the Hamakua Coast and whose family still resides on the Big Island,I'm particularly proud of the work this Council has already done to understand this issue. Here on the Big Island,Local 5 represents hundreds of working people that work in our hotels and at Kasier clinics in Hilo,Kona and Kamuela. As a local union,we have worked with officials on every county regarding this issue;and as a union that represents nearly 250,000 service workers throughout North America, we have worked in every major city(from Toronto to Santa Monica&Los Angeles)and have helped pass practical legislation that addresses the proliferation of illegal short- term rentals while still preserving our neighborhoods and housing inventory for locals. 2 1516 South King Street,Honolulu Hawaii 96826-1912.808-941-2141*www.unitehere5.org I _ 808 941 2166 Unite Here Loca15• UniteHere Local 5. 05:37.06 p.m. 08-28-2018 4/7 Here in Hawaii,we have spent the last four years heavily engaged at the State Legislature and in the City&County of Honolulu,but have also worked closely with thousands of community stakeholders,residents,and housing leaders statewide that have helped us acquire a unique and valuable perspective of how to approach this issue. We have come to the conclusion that the most essential component to any legislation is ensuring that hosting platforms that advertise rental services,Internet or otherwise, file reports of the units they list. This has proven critical to any hope of any effective enforcement regime. In other words,operators and hosting platforms must be required to operate transparently by providing list of names and addresses of operators to the County so that the County can verify compliance. As such,we would kindly suggest that the following new section relating to"Records," "Hosting platform reports,"and"Unpermitted rental of failure to submit reports unlawful"be added to Bill 108 as a way of complementing the existing draft to ensure that the intent and integrity of Bill 108 is preserved: SECTION 2. "Section 25-4- . Short-term vacation rentals. (b) Registration of short-term vacation rentals. (4) Records. All of the director's records of enforcement actions taken under this section shall be open to the public for inspection and copying without limitation or redaction." "Section 25-4- .5.Hosting platform reports." "Any hosting platform shall report to the director on a monthly basis,on the date and in the electronic format specified by the director,the street address of each listing on the platform of a short-term rental,bed and breakfast home or transient vacation unit in the County,the names of the persons responsible for each such listing,and the length of each stay and the price paid in such a listing effectuated by or through the platform.All such reports,except information about prices charged and taxes paid, shall be records open to the public for inspection and copying by neighbors of the rental who supply the address of the rental as a condition of the inspection or copying." "Section 25-4- .6.Unpermitted rental or failure to submit reports unlawful." (a)It shall be unlawful for any person other than a hosting platform to 3 1516 South King Street,Honolulu Hawaii 96826-1912.808-941-2141•www.unitehere5.org 808 941 2166 Unite Here Local 5x UniteHere Local 5* 05:37:32 p.m. 08-28-2018 517 I � commit any of the following acts with respect to a short-term rental,bed and breakfast home or transient vacation unit that is not a permitted use under this chapter and does not have a nonconforming use certificate under this chapter: (1)Offer to rent a short-term rental,bed and breakfast home or transient vacation unit; (2)Accept in exchange for a short-term rental,rental of a bed and breakfast home or transient vacation unit any money or other thing of value,including any rent,fees,commissions,revenue- sharing,rebates,refunds or other exchanges of value;or 3)Advertise rental of a short-term rental,bed and breakfast home or transient vacation unit by any means including signs,print,or electronic media. (b)It shall be unlawful for a hosting platform to commit any of the following acts with respect to a short-term rental,bed and breakfast home or transient vacation unit that is not a permitted use under this chapter and does not have a nonconforming use certificate under this chapter: (1)Offer any goods or services,including without limitation cleaning,insurance,catering,hotel or restaurant bookings,or guide services;or (2) Fail to file any report required by Section 25-4. " The following definition would also need to be added below relating to"Hosting platform": SECTION 3.Chapter 25,article 1,Section 25-1-5,of Hawaii County Code 1983 (2016 Edition,as amended),is amended by adding new definitions to be appropriately inserted and to read as follows: ""Hosti platform"means a marketplace in whatever form or format which facilitates the rental of a short-term rental,bed and breakfast home or transient vacation unit,through advertising,match-making or . any other means,using any medium of facilitation,if the operator of the hosting platform derives revenues,including booking fees or advertising revenues,from providing or maintaining the marketplace." Thank you,and we kindly request that the amendments above be inserted into Bill 108 • prior to submittal to the Planning Commissions. As the process continues,we would also recommend that the Committee,Commission and full Council look closely at other tools that could help ensure proper enforcement. 4 1516 South King Street,Honolulu Hawaii 96826-1912.808-941-2141•www.unitehere5.org ^ 808 941 2166 Unite Here Local 5* UniteHere Local 5• 05:37:57 p.m. 08-28-2018 6/7 First,we would recommend the Council look closely at inserting the concept of"private enforcement"as the best deterrent against the illegal proliferation of short-term rentals. We have found that those most directly affected by illegal vacation rentals are those living nearby. The language below would allow neighbors(living within 1000 feet of an alleged illegal operation)to address the problem directly. The language has also already been adopted by the Zoning Committee of the Honolulu City Council as reflected in Res. 17-052,CD1 that would amend the City's zoning code: "Section 25-4- .7.Private Enforcement," "A neighbor may institute a civil action in any court of competent • jurisdiction against any person for violation of the provisions of this chapter pertaining to short-term rentals,bed and breakfast homes and transient vacation units and shall be entitled to all remedies available under the law or in equity appropriate to remedy any such violation, including but not limited to a fine equal to the gross amount paid by a customer to rent a short-term rental,bed and breakfast home or transient vacation unit,which shall be doubled if the violation is shown to , be willful.The department and the zoning board of appeals do not have special competence in or primary jurisdiction over such violations and the neighbor is not required to exhaust any administrative procedures before instituting action.If the neighbor is the prevailing party in any legal action taken pursuant to this section,the court shall award reasonable attorneys'fees and costs as part of the costs recoverable. Any fine which has not been satisfied in full within 90 days and has not been successfully challenged by a timely writ of mandate shall constitute a lien against the real property as to which the violation occurred and may be recorded, provided that no such lien shall be imposed if the owner of the property did not commit a violation of this chapter in connection with the rental and the owner establishes that all phases of the rental including advertising,offer and exchange,took place without the owner's knowledge.Due to the special competence of the department in investigating and remedying violations of this chapter,no action under this section may be brought until six months after the neighbor has filed a complaint with the department against the person alleged to be in violation of the provisions of this chapter pertaining to short-term rentals,bed and breakfast homes and transient vacation units." ""Neighbor"means any property owner or tenant all or any part of whose principal residence is within a 1,000-foot radius of real property on which a short-term residential rental occurs." Secondly,the definition of STR's should be tightened. As drafted,Bill 108 has no limit on the number of days a unit may be used as an STR. That should be addressed moving 5 1516 South King Street,Honolulu Hawaii 96826-1912.808 941-2141•www.unitehere5.org 808 941 2166 Unite Here Local 5* UniteHere Local 5* 05:38:29 p.m. 08-28-2018 717 forward. The definition of STR limits it to five bedrooms but nothing in the draft states that buildings with more than five bedrooms may not be rented on a short-term basis or that they must be regulated like hotels. Thirdly,gill 108 has no requirement of owner occupation.if the owner resides in the same building,it is not even considered an STR thus not regulated at all. Especially since proving how much time the owner actually spends in the building is essentially impossible,this means as long as the owner claims this as the legal residence,the building is exempt no matter how many units it offers. These can be in the regulated zones or,by implication,in any other zones since this ordinance would establish the limits of municipal regulation of this type of property use. This is a very big loophole. Finally,we would suggest including penalties such as disgorgement or injunctions in addition to stiff fines to halt illegal activity and similar to language that already exists in bills being considered by the Hawaii State Legislature. Addressing the growth of illegal vacation rentals is crucial to achieving housing affordability for our island residents. It is crucial in making sure we have a place to call home. Thank you. 1"Hosts with — Multiple Units p nt A Key Driver of Airbnb Growth,"CBRE,March 2017. Page 4 states,"Based on data from Airdna,and for the period October 2015 to September 2016,over 416,000 hosts generated an estimated$5.7 billion in revenue through Airbnb in the United States, which was a 140%increase in revenue over the preceding 12-month period. Of this$5.7 billion, approximately 81%was captured by hosts offering an entire-home unit,up from approximately 78%in the prior year."(emphasis added) 2 Based on"Hosts with Multiple Units—A Key Driver of Airbnb Growth,"CBRE,March 2017. For Oahu,the year over year growth in the total number of units listed on Airbnb was 92.5%. For those listing multiple units,the growth was 124.6%,which is more than the average growth,and more than the 77.0%growth of hosts who were not listing"Entire home"units. It also states on page 6,"All markets realized an increase in the total number of units managed by multi-unit hosts.Four markets shown in Figure 1 had a year-over-year growth rate of above 100%. Nashville led the way with a 161%increase in units followed by Oahu(124%),New Orleans (120%)and Seattle(102%).In New York and San Francisco,units managed by multi-unit hosts only increased by about 35%,which is slightly higher than overall unit growth for these two markets,leaving the share of units managed by multi-unit hosts relatively unchanged." 6 1516 South King Street,Honolulu Hawaii 96826-1912.808-941-2141•www.uaitehere5.org WINDWARD PLANNING COMMISSION COUNTY OF HAWAI`I HEARING TRANSCRIPT SEPTEMBER 6, 2018 A regularly advertised hearing on County Council Initiated Bill No. 108, Draft 4 was called to order at 9:31 a.m. in the County of Hawai`i Aupuni Center Conference Room, 101 Pauahi Street, Hilo, Hawai`i with Chairman Joseph Clarkson presiding. COMMISSIONERS PRESENT: Gilbert Aguinaldo, Joseph Clarkson, Donn Dela Cruz (to 12:54 p.m.), Thomas Raffipiy, John Replogle. ABSENT & EXCUSED: Donald Ikeda. ALSO PRESENT: Michael Yee (Planning Director), Daryn Arai (Deputy Planning Director) (to 2:54 p.m.), Amy Self(Deputy Corporation Counsel to the Windward Planning Commission), Malia Ho Hall (Deputy Corporation Counsel for the-Windward Planning Commission), Jeff Darrow (Planning Program Manager) (from 2:30 p.m.), Maija Jackson (Planner), Shancy Watanabe (Planner) (from 9:00 a.m. to 12:21 p.m. and 2:01 p.m. to 3:31 p.m.), Esther Imamura (Planner), Kim Tanaka (Secretary) (to 11:09 a.m.), and Saralr Hata-Finley(Commission Secretary). And 33 members from the public in attendance. INITIATOR: COUNTY COUNCIL (BILL NO: 108, DRAFT 4) An Ordinance amending Chapter 25, Article 1, Article 2, Article 4, and Article 5 of the Hawai`i County Code 1983 (2016 edition; as amended), relating to short-term vacation rentals. The purpose of this bill is to manage the impacts of these short-term vacation rentals by: 1) defining where this use will be allowed; 2) establishing provisions and standards to regulate this use; and 3) providing.an avenue for au existing use deemed to be improper by this ordinance, to apply for a nonconforming use certificate that would allow them to continue to operate in a non-permitted district. The County Council has referred Bill 108, Draft 4 to the Planning Director and the Windward and Leeward Planning Commissions for comment and recommendations. 9:25 a.m. CLARKSON: The next item on the agenda was initiated by the County Council. It's asked for a review of a proposed Bill No. 108, Draft 4. Oh, I'm sorry, I was recently reminded that this agenda item was scheduled for 9:30, so we will have to wait for 4-1/2 minutes. We'll take a 4-1/2 minute recess and then begin discussion of this agenda item. Chair Clarkson called a recess at 9:25 a.m., and the meeting was reconvened at 9:31 a.m. CLARKSON: We are recommencing the meeting. Once again, the item on the agenda was initiated by the County Council. It asked us, the Windward Planning Commission, for our review of Bill No. 108, Draft 4, and to brief us on this matter, Maija Jackson will be making a presentation on the Planning Department's review of the draft bill. 1 JACKSON: Thank you, Chair Clarkson. Good morning, everyone. So, for this presentation, what I've done is pretty much taken each slide out of the Background Report that we provided to you and the recommendations that were made. So, you can follow along in your Background and Recommendation, and I think it might be helpful rather than having me go through all twenty something slides and then wait for questions. If the Commissioners have questions as we're going through the slides, if you can just go ahead and interrupt me and ask your questions at that time, okay? So, Bill 108, Draft 4 is related to short-term vacation rentals. This bill was initiated by the Hawai`i County Council, and it was referred to the Planning Director and the Windward and Leeward Planning Commissions for comment and recommendations. The bill adds a new section to the Zoning Code, and it will amend other sections related to short-term vacation rentals. The purpose of this bill is to manage the impacts of short-term vacation rentals by defining where this use will be allowed, establishing provisions and standards to regulate this use, and providing an avenue for an existing short-term vacation rental deemed to be improper by the ordinance to apply for a nonconforming use certificate, which would allow them to continue to operate in a non-permitted district. So, what is a short-term vacation rental?-Bill 108, Draft 4-does not seek to regulate all vacation rentals that are rented on a short-term basis. Bill 108 defines short-term vacation rentals as a dwelling unit of which the owner or operator does not reside On the building site, and that's a key issue there. These are non-hosted or un-hosted vacation rentals, which has no more than five bedrooms for rent on the building site and is rented fora period of 30 consecutive days or less. And, the Zoning Code,defines a"building site" as a parcel of land or lot. So, basically, it means the owner or operator has to reside=does not reside on the property. This bill is— CLARKSON: =Let me just ask. JACKSON: Okay. CLARKSON: So, there could be multiple buildings, and if one building is used for a short-term rental and the owner lives in another building, but it's on the same property, that would count as owner occupied: JACKSON: So, if there's two_dwellings on the property and an owner or operator lives in one of the dwellings, then it would be considered a hosted rental and so this bill would not apply to either of the dwellings being rented out. So, the bill does not cover the rental of a dwelling unit where an operator or owner lives on the property such as dwellings or other buildings where six or more rooms are rented. You notice if we go back to the definition, it specifically says which has no more than five bedrooms for rent. So, buildings or dwellings that have six or more rooms are considered hotels, inns, or lodges in the Zoning Code even if they occur within a dwelling. So, the bill would not apply to those uses. 2 This bill also would not apply dwellings to dwellin s where no more than five bedrooms are rented for a period of 180 consecutive days or less, when the owner or operator resides on the building site. These are considered hosted short-term rentals and can include a bed and breakfast establishment or renting rooms of a dwelling on a short-term basis to not more than five unrelated people, which is defined as a"family" in the Zoning Code. A bed and breakfast establishment allows up to ten guests within the five bedrooms and the service of continental breakfast meals. The bill also does not cover dwellings rented on a long-term basis which is typically six months or longer. So, does the Commission have any questions on what a short-term vacation is as defined in this bill? No? Okay. CLARKSON: I—excuse me. JACKSON: Yes, Joe. CLARKSON: Why is the—why is the word `vacation" in the bill? I mean, I'm just, if somebody is coming and renting a room but they-are there on business, does_that not make it a vacation rental? I mean, why isn't it just short-term rental for any purpose?',_ JACKSON: Because that's how the bill:Was drafted. CLARKSON: Okay. JACKSON: And, I'm assuming:the intent of the bill was to capture_situations, was to mainly capture situations wherean entire dwelling is rented;out to one_group at a time, and there's not some type of operator or. host on-site: CLARKSON:-_ Okay, thank you. - -. JACKSON: So, I'm again assuming that situations like travelling nurses and business guests would typically be staying in a.hosted-rental where somebody lives on the property and just one room is rented-out for them to.use. So, where are short-term vacation rentals permitted? The bill identifies the following zoning districts and areas where existing and new short-term vacation rentals can operate as a permitted use. This is the Resort-Hotel zoning district; General Commercial zoning district; Downtown Hilo Commercial District; and Village Commercial zoning districts with a Use Permit; and all zoning districts within areas designated by the County General Plan as Resort or Resort Node, except that a Use Permit is required in the Single-Family Residential zoning district within those Resort or Resort Node areas. So, outside of those five areas, new short-term vacation rentals are not permitted but existing short-term vacation rentals may continue to operate if the Planning Director issues a nonconforming use certificate. Any questions on where short-term vacation rentals are permitted? Okay. 3 So, how are existing short-term vacation rentals permitted? So, when we first got Bill 108 in the Planning Department and read through it, there was a little confusion as to whether the County Council wanted all existing and new short-term vacation rentals to register or not because the way the bill is worded, it only requires registration of some existing and new vacation rentals. So, staff talked to the initiators of this bill at County Council and got some clarity on that, and the intent of the bill was to have all existing and new short-term vacation rentals register with the Planning Department within six months of adoption of the ordinance. In addition to registration, those short-term vacation rentals outside of permitted zoning districts will also need to apply for a nonconforming use certificate. However, the bill does not require owners of existing short-term vacation rentals in the CV zoning district or RS district in the Resort areas to register,and that actually needs to be fixed based on what County Council discussed with staff as the intent of the bill. So, we've added Recommendation No. 7, which would fix that and require all short-term vacation rentals to register. Let's see, so as I mentioned, the bill intent is to require all new short-term-vacation rentals that are established in zoning districts where they are permissible. -I'm sorry, let me back up here. How are new short-term vacation rentals permitted? -Okay, so-the bill requires registration of all new short-term vacation rentals established in the zoning:-districts where the use is permissible. Those were those five areas that I showed)you.earlier. But,-the bill does not require registration of new short-term vacation rentals that may be established outside of permissible zoning districts. This would include the County Agricultural zoning district on land in the State Land Use Agricultural District with a Special Permit. So, that's another area that would need to be fixed based on what Council has informed staff as-the intent Of the bill. REPLOGLE: I have a question and it's regarding the nonconforming use certificate? So, that would mean if:you were not in one of the permissible zonings for a vacation rental, you can apply for this nonconforming use certificate? JACKSON: Yes. REPLOGLE: And, have a vacation rental there if it's approved? JACKSON: You can apply for,I'm sorry, you can apply for a nonconforming use certificate for existing vacation rentals. REPLOGLE: But not new? - JACKSON: Not new ones, no. The idea is to not allow new short-term vacation rentals in areas outside of where the County Council is proposing they be permitted. REPLOGLE: The zoning that they're saying. JACKSON: Yeah. 4 REPLOGLE: Okay. JACKSON: Okay, so moving on to the,registration process. That process includes submitting a form and a$250 filing fee to the Planning Department. Along with that application form, the submittal needs to include a site plan showing the location of the rooms for rent and the required parking. The Zoning Code currently requires one parking space for each rented bedroom in addition to one space for the dwelling unit if rooms are rented individually, so if you have a dwelling with three rooms rented, you would need to have four parking spaces if the rooms are rented individually. Or two parking spaces if the dwelling unit is rented as a whole. With the application, verification that State of Hawaii general excise tax and transient accommodation tax licenses are in effect would also need tO be submitted along with verification that a letter has been sent to all surrounding owners and lessees within 300 feet of the property. The letter needs to notify them of the details of the operation of the vacation rental such as the number of units being rented, the maximum number-of guests permitted, the number and location of parking spaces, and instructions on how to submit complaints to the Planning Department about the operation. RAFFIPIY: Question. JACKSON: Yes? RAFFIPIY: So, the letter, the verification letter is only to notify the neighbors, not to ask them for any permission at all,,right?- JACKSON: No. RAFFIPIY: Just to notify them that they do have an operation within the neighborhood. JACKSON: Yes. RAFFIPIY: Thank you. - JACKSON: Just tO notifythem that they are registering for this use with the Planning Department. The bill requires that owners Of-short-term vacation rentals notify the Planning Director of ownership changes or when the establishment ceases to operate for any reason. Let's see, and the slide says, but these provisions are under the registration section, so it's not clear if they apply to all short-term vacation rentals, but again, Council clarified that the intent was to have applied to all short-term vacation rentals so we can make that correction in the bill. Any short-term vacation rental that is not registered within the required deadlines is considered unpennitted and subject to penalties until the short-term vacation rental becomes properly registered and compliant with the requirements of the bill. 5 So, moving on to the nonconforming use certificate process, but before I do that, does the Commission have any questions about the registration process? No? Okay. So, owners of existing short-term vacation rentals located outside of a permitted zoning district must submit an application for a nonconforming use certificate to the Director within a 180 days of the effective date of the ordinance should this bill become law. The owner must provide evidence to prove that the short-term vacation rental was in operation prior to the effective date of the ordinance. Evidence can include tax documents such as Hawaii State General Excise Tax filings or TAT tax filings and Federal and State income tax returns. Based on the evidence submitted, the Director shall determine whether to issue the nonconforming use certificate. Current nonconforming use certificates must be displayed on the premises so that it is clearly visible to the guests and to zoning inspectors. The bill indicates that a nonconforming use certificate may be issued for short-term vacation rentals on land in the State Land Use Agricultural District provided the lot existed before June 4th, 1976. The reason for this date is that all dwellings on lots created after June 4th, 1976, are considered by State law to be farm dwellings which are to be used to house farm workers rather than vacationers or renters. And,just for a little context, there are,-compared to other Islands, like I just spoke to Kauai yesterday and they have very few lots that were created before 1976, Hawaii County has a lot, a lot of lots created prior to '76. Most of-the big subdivisions in Puna were created prior to '76 so State law considers the first dwelling on those lots to be a single-family dwelling rather than a farm dwelling. CLARKSON: But even a_lot in an agricultural district that has a farm dwelling in which the farm operators live can also have guest houses, so would—let's see, wait a minute, that would be hosted then so that is not relevant-to this. JACKSON: Yes. CLARKSON: Sorry. JACKSON: No problem. Okay, so the nonconfoiuiing use certificate once it's issued, it must be renewed annually on_or;before the expiration date indicated on the certificate and a$250 filing fee is required with the renewal request. Renewal of the certificate may be denied by the Director if the applicant has violated provisions of the bill or other pertinent laws or if the owner is delinquent in payment of County taxes, fees, fines, or penalties, if the owner or reachable person has not been reachable or available when needed, and if there have been police reports or verified neighbor complaints of noise or other disturbance. The bill says the Director must deny renewal of a certificate obviously if the use is abandoned for any reason for a continuous period of 12 calendar months. So, I just want to make a distinction here, too, that the new short and existing short-term vacation rentals in permitted districts are not required to renew annually. It's only those that require the nonconforming use certificate. 6 HALL: Sorry, Maija. JACKSON: Yes. HALL: One question. Is it supposed to be an "or" then or is it an"and" for all those three, like would they have to have all those things wrong or just one of those things like 1, 2, 3 or 4. JACKSON: That's a good question. HALL: `Cause it says "and"but I think it should be "or." JACKSON: Let me check how it's worded in the bill because it should be an"or." HALL: Yeah. JACKSON: In the bill it's an "or." I'm sorry. - HALL: No worries, thank you. - JACKSON: Okay, so the Director must_provide the decision to deny renewal of a certificate in writing, and the owner may appeal the decision to the Board of Appeals within 30 days of receipt of the decision. There's another section of the bill that deals with loss of nonconforming short-term vacation rentals due to emergencies. It requires that the-Planning Director assess the effect of a permanent loss of nonconforming short-term vacation rentals when a declared emergency occurs such as lava inundation that-recently happened to Kapoho and the Leilani Estates area. The Director can initiate legislative and/or administrative opportunities to restore losses to short-term vacation,rental capacity within the affected district. So, standards_for operation of a_short-term vacation rental. This would apply to all short-term vacation rentals,-new and existing. The bill requires that they have an owner or reachable person that resides within the County, and.I didn't put it in the slide, but let me just read what a reachable person is a$ defined in the bill. It says "reachable" means being able to respond via telephone to a request from a guest, neighbor, or County agency for his or her presence within one hour of receiving thaf_regiiest and be physically present at the short-term vacation rental within three hours of receiving a call from a guest, neighbor, or County agency when that guest, neighbor, or County agency requests the presence of the reachable person. So, available to call back within one hour and available to be at the site within three hours. Okay—oh, I did put that in there. Great! Let's see here . CLARKSON: I have a question about long term. Don't long-term rental units have to have a registered agent? 7 JACKSON: I'm not sure on long term. You mean more than CLARKSON: —Yeah, you know just a regular house that's being rented— JACKSON: —180 days? CLARKSON: It was my understanding that there had to be somebody listed as the rental agent for that house. Why there wouldn't be at least that kind of a requirement although the reachable person, I guess, would be considered an agent. JACKSON: It could be, yeah. HALL: Yeah, there's usually like a landlord-tenant agreement-so when you have a contract in place, then that would lay out who—you know who:the landlord is and they're responsible for the dwelling basically so that's who you contact and then this kind of'creates that as well. It's a reachable person that can actually be there, though. JACKSON: Let's see, so the owners are also required to notify,the Planning Department of any changes to the contact info for the reachable person. All short=term vacation rentals must abide by a good-neighbor policy. This requires.-the owner or reachable person to make sure the activities taking place in the rental conform_to the character-of the surrounding neighborhood. The policy must be displayed on the premises and_included in:the rental agreement. The policy includes quiet hours from 9 p.m. to 8 a.m., ensuring that sounds outside of quiet hours do not exceed what is normal fora residential area,prohibiting machines or devices that generate loud noises, and ensuring that guests park on-site in:designated parking areas. Other standards that all short-term=vacation rentals must abide by include displaying on the back of a door a copy of the registration or nonconforming use certificate and the reachable person's name and phone number. They also need to include:the registration number or nonconforming that should say"and" nonconforming use certificate number on all forms of advertising as well as comply with the Sign Code and parking requirements in the Zoning Code. So, complaints and enforcement. The bill requires the Planning Director to receive and track complaints regarding_short-term vacation rentals, and to provide information about the rules, policies, and procedures to property owners, managers, neighbors, and the general public. The Director is also responsible"for adopting rules of practice and procedure to implement the provisions of this bill. To enforce the provisions of the bill, the inspectors within the Planning Department will be able to rely on any advertising offering the property as a short-term vacation rental as evidence that the rental is operating on the property. The burden of proof will be on the owner to establish that the rental is being operated legally or the property is not being used as a short-term vacation rental. And, the bill—yes? CLARKSON: Let's go back to advertising. 8 JACKSON: Okay. CLARKSON: I have never used a short-term vacation rental. I've heard the words Airbnb, but I've never even looked at their site. Is I don't know how it works. Does the advertising direct the potential user to contact the owner directly and pay them directly? Or is contact and payment made through the platform agency like Airbnb? In other words, if the staff of the Planning Department were looking at all the short-term vacation rental advertisers, how would they know who was being advertised? JACKSON: So, I believe that anyone could go on Airbnb and search for a unit and then everything is done electronically like through email. They, there's usually a calendar that you can ask to reserve a certain period of time and then somehow.an email must be generated to the owner and let them know that someone wants to rent their unit-for this period of time. And, then the payment arrangement is made through the website. But, as far as like how do you know what unit or where the unit is located, these sites usually have really general information. They don't always list like the address of the property, so that would from an enforcement perspective be really difficult to match a property with an address unless it's listed on the hosting platform website. = CLARKSON: So, does the State get that information when the hosting platform sends the TAT that they collect to the State? JACKSON: I don't know that answer. CLARKSON: Or, do they even do that? Is thisiall being done outside normal tax collection law? Well, that, I'm just asking. - JACKSON:-I:don't know that answer. CLARKSON: Okay. - JACKSON: Okay, so the bill-alsb proposes to establish a short-term vacation rental enforcement account which would be administered by the Planning Director for the purpose of enforcing this vacation rental law. The account Will be funded by fees collected for registration, fees collected for renewal of nonconforming use'certificates, and fines collected from enforcement action. So— CLARKSON: —Can I just ask another question of Department staff? So, if you were asked to develop a list of all the short-term vacation rentals on the Big Island, could it be done? They're in operation right now. Is there any way for the Department to actually know what's going on? REPLOGLE: No. YEE: They're not registered with us now, so we would have to compile a list. 9 CLARKSON: But, you think you could compile a list based on public information if they fail to register? YEE: I see Amy Self walking up, so, I have a sense she'd like to chime in. SELF: If I may. This is the whole purpose behind this— CLARKSON: Please introduce yourself. SELF: I'm sorry. Amy Self, Deputy Corporation Counsel. I represent the Planning Department and Planning Director. The whole purpose of Bill 108 is to require people to register-because right now there is no law. There's nothing, no law against someone renting their house out-as a short-term vacation rental. There's nothing defined in the Zoning Code for that-so the use of that property is as a single- family dwelling. As long as they meet the def nitioii of a single-family dwelling, there's, they're not required to register or anything else, and that's why the purpose of this.bill is so that they can track how many short-term vacation rentals there are in this County. There's no way to know right now because you can do it. It's not illegal. CLARKSON: No, my question related to the let's just say-there was some lack of communication and someone who didn't know they were supposed to register didn't. How would the enforcement agency, which is the Planning Department apparently according to this bill, determine that? In other=words, I just wanted my questions about Airbnb and everything is how is anybody going to know whether this`lawis being followed or not if it becomes an ordinance? SELF: Well, it's like any other zoning violation. It's,complaint driven. So, someone files a complaint with the Planning Department saying thatsomeone is operating a short-term vacation rental because they saw it on the Internet or whatever and that they know that they haven't registered,.then the Planning Department would be required to go out and investigate and there are all kinds-of ways that they could fnd out whether or not this, whether these people are operating legally.:_ It would be the same enforcement that's under the current Zoning Code. So, it would be complaint driven. CLARKSON: Thank you. :_ RAFFIPIY: I have a question, Mr. Chair. I see the enforcement, and I see the inspection. All I can see now is dollars as far as support to here, the Planning Department. Is that bill addressing funding positions to, you know, to man up these? And, I can see inspectors out there to do inspections, and so I'm just wondering if that's factored into it or if they thought about it, man up your Department, sir. YEE: During testimony to the Council, I certainly pointed out that without inspectors, enforcement would be very, very difficult. The bill does not, does not, cannot address placing new positions in that, but I think clearly with the intent of Council, our budget will have to be 10 increased to be able to provide those positions. They've all heard the stories, and this is all about enforcement, so I don't think they're absent of knowing it, that the other counties when they instituted their vacation rental bills, many of them were hiring, you know, four plus inspectors just to deal with vacation rentals. So, they know it's a robust situation. In terms of setting up the special account, I think they were acknowledging that we would need as many resources as possible to try to be timely on our enforcement, too. RAFFIPIY: And, I supposed the fee will be used to pay for or to fund those positions and not raising any taxes, outside the fees? YEE: I'll be diplomatic and say that I leave that as a policy-decision for the Council. RAFFIPIY: Thank you very much. CLARKSON: Any further questions on this slide?:Please proceed,Maija. JACKSON: So, that kind of concludes the portion of the presentation on what the bill includes. And, so next, I'm going to go onto the Planning Director's recommendations;but does the Commission have any other questions about what the bill,does,or does not include at this point? No? Okay. So, the Planning Director is recommending that the Commissions send a favorable recommendation of Bill 108,Draft 4 to the Council. We have several recommended revisions, though. And, some of the-revisions are really minor._They're just housekeeping issues, and then others are more substantial. So, well go through them one at a time. The first one is fairly basic.:We're suggesting changing the title of the bill and references throughout the bill to "un-hosted short-term vacation rental"just to clarify for the public and staff that this bill does not apply=to hosted-rentals because just reading the title without reading the definition, you, at first glance, you would think it applies to all short-term vacation rentals in the County. So, that's one recommendation. The second recommendation, if you look at the definition of short-term vacation rental in the bill that's on page 6;-the last sentence of the definition says, "this definition shall not apply to the short-term use of an owner's primary residence as defined under the Internal Revenue Code." And, so we're not exactly sure:what that means, what is or isn't allowed under the Internal Revenue Code. So, we're asking that the County Council either clarify the definition or just cite exactly what the IRC allows or does not allow. That would be helpful for the public and also for our Department enforcement staff. CLARKSON: Is there anyone here representing the Council? JACKSON: Not that I know of. CARTER (from audience): I'm here. 11 JACKSON: Hi Sunshine. CARTER (from audience): I'll take information and present it to the Council. CLARKSON: But, you can't clarify the Council's understanding of this— CARTER (from audience): No, I would have to ask the initiator. CLARKSON: Okay. JACKSON: So, the third recommendation is to add to the definition that dwellings where more than five bedrooms are rented are defined in the Zoning Code-a§ inns, lodges, or hotels. And, that's again just for the public and staff so that it's really clear what—what a short-term vacation rental under this bill is. There are references in the Zoning Code,:but you'd have to go to the inns, lodges, or hotels definition to find it. So,just to make it easier.- Okay, so the fourth recommendation is regarding`the permitted uses section, so in your bill, that would be on page 1. And, it says, "Short-term vacation rentals, where permitted, specific prohibitions." So, right now, the bill says, "Short-term vacation rentals shall bepennitted in the" under (B), it says "CV district, provided-that a use permit is obtained for each use..." And, the Director is recommending removing the requirement for a Use Permit to establish a new short- term vacation rental in the Village-Commercialzoning district. The reason for that is that a lot of the small, rural towns around the island consist only of CV zoning. The only commercial zoning in those villages is CV,'and land uses within these villages include b&b's along with a lot of service-oriented eommercial businesses like restaurants, art galleries,just general retail establishments. Those rely on customers that are both residents and tourists in order to be successful. So, requiring a Use Permit, as you know, it's somewhat of a lengthy process. The Use Permits are approved by you folks, the Planning Commission, and there is a filing fee. They typically take at least 90 days to get through the Planning Commission for a decision. So, the idea is rather than require a Use Permit,it doesn't necessarily make sense in these areas because these are already, you know, little commercial towns. The Use Permit criteria you're usually looking at—does, is there adequate infrastructure, and does it have an impact on the surrounding community. Typically, adequate infrastructure is already in place in these little rural towns, and the adjacent uses are other:comimercial-type businesses, so your impact on these surrounding communities isn't very substantial. So, that's the reason for that recommendation. Did you have any questions? Okay, the recommendation five. So, this one is also in the same section if you look at page 1 of the bill, under (C), (a)(1)(C), currently it says short-term vacation rentals shall be permitted in the "General Plan Resort areas and Resort Node, except that RS districts in the General Plan Resort areas and Resort Node shall require a use permit." We are asking that that wording just be changed up a little. The Zoning Code doesn't often times refer to the General Plan 12 designations because it's a zoning code, so it really focuses on uses allowed in each zoning district. So, keeping the same intent of what the County Council was going for but just rewording it to say, "All zoning districts, except Open, situated in the General Plan Resort and Resort Node areas, provided that a use permit is obtained in the RS zoning District." And, this is this is really just more for clarification and to help keep the existing structure of the Zoning Code. Did you have any questions on that one? CLARKSON: I'm confused. So, the first part lists different zoning districts— JACKSON: —Yeah— CLARKSON: —where they will be permitted, and then you're referring'to General Plan areas JACKSON: —Mm-hmm— - - CLARKSON: —Wouldn't it make more sense to just list all the zoning distri ets where they're permitted and list all the ones where they're not? - JACKSON: We could do that. We could list every zoning district in the General Plan Resort - area. - CLARKSON: Well, I mean,how many different ones are there? JACKSON: There's probably just off the top of my head—at least six, maybe eight. CLARKSON: Well, but that would make it— - JACKSON: —We can format it that way— --- CLARKSON:__—since you're; I mean;--like there's, I don't know what the names of them are, but there's like resort one, resort two, resort three? JACKSON: So,just asan example, you're recommending changing it to like RM, which is Multi-Family Residential, situated in the General Plan Resort and Resort Node area. Correct? And, then CN, situated in the General Plan. List each of them like, like that? CLARKSON: Well, it would be helpful to me to see a zoning map that was of a Resort area— JACKSON: —Okay CLARKSON: —and to see what different kinds of zoning were in that area. JACKSON: Okay. 13 CLARKSON: But, I—I think it would be clear to say, clearer for the bill to either list all of those places where it's permitted or say it's permitted everywhere except, and list all those place where it's not permitted. I mean,just to make it, you would be able to look on any zoning map and say, well, yes, there, yes, there, no. Rather than have to look at a zoning map and then look at a General Plan to see where the Resort Nodes are. JACKSON: Right, but I think the County Council wanted to not allow it in every RM zoning district. They only wanted to allow it in the RM zoning districts in Resort areas, and so that's why they made that distinction. So, like I said, this recommendation is keeping that intent of what Council is recommending or proposing, but restructuring it to fit in that Zoning Code style more. CLARKSON: Okay, thank you. . JACKSON: Any other questions on that one? John? Okay. All riglit, recommendation number six is to add the following language to the first_section where let me just.make sure I have that right. Yeah, so this would be added to that very.-f rst section on page 1 under(A) probably as a number three, yeah, number three after number two:--Do you,see where that'is on page 1 of the bill, (a)(1), this would be (3). So "Special Pennits in the State_:land use agricultural district shall not be issued to permit short-term vacationrentals in farm dwellings since State law requires farm dwellings be used to house farm Workers rather than'vacationers." And, again, the reason for this, as I mentioned before, was that State law allows the Commissions to issue a:Special Permit for any land use that is reasonable and unusual and is consistent with State land-use law related to lands within the Agricultural District, even if the land use is not specifically listed in the Zoning Code as a pernitted use for that zoning district. So, in this case,'the way the bill is set up, short-tent vacation rentals are not listed as a permitted use in the=agricultural zoning district,but as you know, the Commission still has the authority to grant a Special Permit for any use,in the State Land Use Agricultural District. So, let's see, where was I? And,,as we discussed before, farm dwellings are all dwellings situated on lots created after June 4th, 1976.~Farm dwellings are also additional farm dwellings on lots created before June 1976 in the State Land Use Agricultural District. They are defined as a Single-Family dwelling located on and used in connection with a farm or where ag activity provides income to the-family occupying the dwelling. Since a short-term vacation rental is defined in the bill as "un=hosted;" there would be no one on-site that would work on the farm or gain income from working On the farm. Typically, visitors that come to work on farms for ag tourism experience are staying in a "hosted"vacation rental rather than an "un-hosted" short- term vacation rental. So, that's the reason for this proposed language in the permitted uses or permitted areas section. Are there any questions on that recommendation from the Commission? REPLOGLE: Yes, so let's say you were a coffee farmer and you have housing for workers and when it's not coffee season, you are allowed to have those as vacation rentals on ag zoned land? JACKSON: No. As un-hosted vacation rentals? 14 REPLOGLE: No, you're a farmer, so you live, JACKSON: —Oh, yes— REPLOGLE: —to get to your farm. JACKSON: Yes, if you're farming, and you want to have guests that aren't farm workers come and stay on the farm, you can do that under the ag tourism section of our Zoning Code which requires a Special Permit. REPLOGLE: Okay, thank you. JACKSON: You're welcome. Okay, recommendation niumber 7. This one is the one I mentioned earlier in the presentation when I was_explaining the bill;and it's basically just to suggest reformatting the proposed registration subsection to require that.all existing short-term vacation rentals submit a registration form to the Department within the 1:80 days. The way the bill is worded now, and I can point you to this section, it's a little bit confusing:._So, if you could look at the bottom of page 1 of the bill and the top of:page_2, it says, "Registrationof all short- term vacation rentals" is the heading. _It says, "Short-term vacation rentals in existence on or before the effective date of this ordinance..:.-Shall register with the planning department and pay a one-time fee of$250...if they exist within the following zoning districts." And, then you'll notice on the next page, it lists the V, CO, and CDH zoning districts, but it does not list the CV zoning district, which was one of;the districts that the Council had listed as a permitted zoning district. - It also does not list zoning districts where a nonconforming use certificate would be required, so outside of the permitted zoning districts� So,_this section could be restructured to basically end the sentence after(b)(1)(A) and just say short-term vacation rentals in existence on or before the effective-date of this ordinance shall register with the Planning Department and pay a one-time fee of two-fifty to the Director.of Finance. And, not reference which zoning districts because that, that will mean that everyone that's in existence with a short-term vacation rental will have to register. So, that is recommendation seven. Are there any questions on that one? CLARKSON: And, now, so everybody has to register? JACKSON: Correct. CLARKSON: But, if you're in a—but, I thought there was a difference between a one-time registration for people who are in the permitted zoning and an annual registration for people who aren't and have to get a nonconforming use certificate. 15 JACKSON: Yeah, so everyone has to register and then those outside of a permitted zoning district, existing short-term vacation rentals outside of a permitted zoning district, also have to get the nonconforming use certificate and that certificate is renewed annually. Correct. AGUINALDO: I have a question, Chair. Do we know all the short-term vacation rentals? How do we know that these buggahs not going come and pay? Do we know? I mean, I see a lot of people here, maybe in for or against. How will we regulate that because basically we don't go on the computer on-line looking all these short-term vacation rentals? How are we really going to know that they gonna comply and pay that fee? Is there a way we going know? HALL: Like Amy Self said before, we're counting on the neighbors actually to regulate for us if you have an issue. It's complaint driven so that's how you know, and also I mean, technically you could go on line and look at all the advertisements and then,you can just enter in the address that you're looking in, and you'll—all the vacation rentals in the area will pop up, you know, regardless. It might not tell you the exact address,brut it's going to tell you what area it's in and, you know, you can kind of figure it out, but for the most part, yeah, it's complaint driven, so we're looking to, you know, the neighbors if there's an issue to come in-and let us know. Or let the Planning Department know. AGUINALDO: Okay, thank you. Thank you. JACKSON: Okay, recommendation eight, let's'see, this is a real minor one. We're just requesting that the word "permanently"be added to-this section to say that the owner of a short- term vacation rental shall notify the Director when the short-term vacation rental permanently ceases to operate. Recommendation nine. Sothis one is on page 3 of the proposed bill. It's kind of at the top part of the bill, and the current wording says that a, "Sound generated by any machine or device that is audibleat a distance of fifty feet from the Machine or device producing the sound is prohibited." So, this is one.of the good-neighbor policies, and it's not really clear what type of devices are prohibited in this section. For example, it seems that equipment used to maintain a rental like lawnmowers and leaf blowers would be prohibited. And, so if you look at the good- neighbor policy just above that; it says that;"sound that is audible beyond the property boundaries duringnon-quiet hours.shall not be more excessive than would be otherwise associated with a residential use." The Director feels like that, that provision is sufficient, and so we're asking that the County.Council either clarify exactly what types of machine or devices they're wanting to prohibit or completely remove that section and just rely on the provision above that. Okay, recommendation ten. We're suggesting that a sentence instructing the Director to establish and maintain a list of all short-term vacation rentals that have registered or received a nonconforming use certificate be added. Right now, the bill requires that the Director track all complaints but does not require the Director to keep an up-to-date list of active short-term - vacation rentals in the County. Any questions on that one? 16 CLARKSON: And, I'm assuming that list would be made publicly available on the Internet or some other way so that if a person who was thinking of making a complaint could find out right away whether they were registered or not. JACKSON: Yes, it would be made available to the public. How that's done, I'm not actually sure, whether it would be Internet or at the Department. Okay, recommendation 11. This one is just for clarity. If you look at this section of the bill which is on page 3 kind of towards the bottom, it says, it currently says, "The director shall adopt rules, in accordance with chapter 91, Hawaii Revised Statutes, for the purpose of implementing this subsection" and so we're just asking that subsection be changed to "implementing the sections of Chapter 25 related to short-term vacation rentals. So, that's—that's just a real minor one. And, recommendation 12. This is a recommendation to reword thissectionon page 4 of the bill. In the middle of the page, currently, it says, "Agricultural lands. A short-term vacation rental nonconforming use certificate may be issued for single-family dwellings-on lots existing before June 4, 1976 located in the State land use agricultural district" And, so we're suggesting adding the word "only." "May only be issued for those single-family dwellings." This i8toclarify that nonconforming use certificates will not be issued for short-term vacation rentals on lots created after June 4, 1976, pursuant to State law in the Agricultural District, because it requires that farm dwellings be used only to house farm workers. Any questions on that one? Okay, we're almost done. Recommendation 13 is to add this language to-the,bill that the:renewal request and renewal fee— this is for the nonconforming use certificate—was not received on or before the expiration date indicated on the certificate, and so this will clarify that renewal requests received after the expiration date will not be renewed. And, that is on page 4 at the bottom of the page, very last sentence. This is related to denial of a request to renew a nonconforming use certificate. Any questions? - -"- RAFFIPIY: Question. So, if they miss the deadline, and they don't get their renewal, I mean they don't get the renewal, so in--effect that they ceased operation completely. JACKSON: That's correct. And, in talking to Kauai County staff because they've been regulating short-term vacation rentals for a while now, they actually suggested that when the Department issues the first nonconforming use certificate, in that letter that's sent to the owner, you know, we highlight then when the renewal date is as like a reminder. So, obviously, if the Department can help give the owner a heads up of that renewal date then I think that will help prevent these renewals from lapsing. RAFFIPIY: If somebody decides to pay five years in advance, can they do that? JACKSON: Not under this bill. RAFFIPIY: Thank you. 17 REPLOGLE: So, next coming up will be when you don't renew your car registration, you will be denied your car? People are going to make investments in these things. JACKSON: Right, so— REPLOGLE: —Things happen. JACKSON: Right. REPLOGLE: I'm not trying to make excuses for them, but that''s pretty harsh. It's almost as though the intent is to get rid of vacation rentals, nonconforming, and bring them into the Resort complex. JACKSON: That is generally the intent of the bill, is to direct new vacation rentals into the Resort and Commercial areas. REPLOGLE: Thank you. JACKSON: Recommendation 14. So;we're actually canging this recommendation a little bit. In your Background and Recommendation-re-poll, it has all:of-that language there, and we're actually recommending removing references to Rtl e residential:occupancy. So, to ensure that short-term vacation rentals_meet basic health and safety.standards, consider adding requirements that the rental complies with-Fire; Building, and sanitation codes. For example, to address the Building Code, a requirement in the,registration section could bp added that a short-term vacation rental may only.be established within a dwelling for which the Building Division has issued and finalized building, electrical, and plumbing permits as a dwelling. And, you have in your package a memo from the Fire Department and the Building Division explaining some of the health and safety standards that they're suggesting. The bill should also consider the impact on staffing resources for the Fire and Building Departments since it's likely that inspectors from these departments will be called out more frequently to inspect the short- term vacation rentals for Code compliance. Currently, the bill only provides that enforcement account to the Planning Department, but does not give any additional resources to Fire or Building Departments'to enforcethis bill. And, I think this is the last one,=recommendation 15 would be to create increased fines for violation of this bill. The Maui and Kauai County Planning Departments have informed the Director that because short-term vacation rentals are a very profitable business, the fines need to be high enough to discourage violation of the proposed law. Our current Zoning Code violation fines start at $100 per day plus a one-time civil fine of$500, and many of the short-term, the non-hosted, right, short-term vacation rentals in our County are offered at $100 a night and more, so if the fees aren't aligned to discourage the short-term vacation rental and the owner will still be able to generate an income even after paying fines, then they're not going to be willing to comply with the law. 18 And,just for a little context, I think City & County of Honolulu are proposing to change their short-term vacation rental law and require, I think it was a$15,000 or $25,000 fine. So, our fees are very small in comparison. Oh, we have one more. One housekeeping measure. This is the last one. So, one of the permitted uses—one of the permitted zoning districts for short-term vacation rentals listed in the very beginning of the bill was the CDH District, the Downtown Hilo Commercial District. But, if you look through the end of the bill where they start to list each section of the Zoning Code where these are permitted, somehow the CDH District is missing. So, this is just a housekeeping measure to add short-term vacation rentals to the permitted uses:section of the CDH District. And, that concludes my presentation. I just want to bring.to:your attention some testimony that's been received since you received your Background and Recommendation packages. This morning, you should have received an email from Lourdes Racela-"an email from Brian Frederickson, and you should also have a letter dated:September 4th__from Airbnb, an email September 1St from Stefan Buchta—actually, you_should have two emails_from him, one dated September Pt at 8:24 and one at 11:34—and, then lastly, an email from Ran ae dated August 31st Are there any other questions? CLARKSON: Hearing none, I thinkit's time to proceed to public testimony. Thank you, Maija. RAFFIPIY: Mr. Chair, can I make a irotion to:take a five-minute break so we can go use the restroom before we proceed into public testimony? CLARKSON: I think-we want"to have at least a little bit of testimony before we do that if that's, if you can hold it. RAFFIPIY:_ I'm going to use the bathroom, Mr. Chair. CLARKSON: We'll start getting people organized here and hopefully Commissioner Raffipiy will—so,right now, everybody who:wants to testify has signed up with the folks at the front desk I'm assuming. I have alist:of 22 people. Everybody's going to be given three minutes to testify, and we're.going to be calling up four people at a time, except for our first testifier who will be the Mayor,-and everybody will take their turn. If everybody uses their three minutes, that adds up to over an hour-.at least of testimony, so we will be taking a break soon during the middle of testimony, but not quite yet- YEE: Chair, if—can we go back to the previous slide real quickly? I'm going to buy us some time here. JACKSON: Which one? YEE: Recommendation 15 which was on fines. Ijust want to comment because this came J up quite often during Council hearings. I think it's, everybody understands that the fines are low. The fines structure is imbedded in the rules and procedures for the Department. There's a schedule, and that's what dictates the current fine schedule. So, a lot of times, during the 19 hearing, folks wanted to imbed the fine within the bill and we kept recommending that they go back to Planning Commission, and when we, when the bill is finalized, we understand intent and then we go back and rules and procedures, and we can change the fine schedule there, create a new fine schedule if necessary. So, today, I would generally say I don't think we need to debate how much the fine needs to be. I think we know it needs to be significantly higher, and that will occur in rules and procedures down the road. I just wanted to add that. CLARKSON: Thank you. We'll begin public testimony now. The first testifier will be Mayor Kim. If you can come forward, please. Do you swear or affirm to tell the truth on this matter before the Commission today? _ KIM: Yes, I do. CLARKSON: Thank you. Please proceed. - - KIM: First of all, thank you for giving me this time: In sitting there, I just recollected, tried to recollect the background of this and why we are here;:and looking at the audience;-knowing just a few of them, very few. When I first,got,elected Mayor;-not first, but when I gofelected Mayor this past December 3rd, even before that;__listing priorities of:what we're going to try to do, this was one of the highest priority. When I left the same job the first time in the year 2008, this was not a problem. I do distinctly remember talking to the Director of the Planning Department at the time, Chris Yuen, arid because you have so many on the table, you have to prioritize what you're going to attack, and=that was on the table as one of the problem areas, and you can talk to Mr. Yuen. His exact words;w ere to me that of all the priorities, this is one of the lesser one is regards to urgency because it was such a small problem and here it is. It comes to this. A year and a half-ago,when I listed the priorities, this was one of the highest priorities. The priorities:established by the population of the Island of Hawaii, their voice of concerns of what is happening. And, I'm elaborating this to emphasize the importance of this. Stating this to emphasize to you, the Commission members, how much work has been done to get to this point. When they were given this assignment, this assignment was in the year of 2016, 17, and in December when we first took office. And; I'm so ignorant in regards to how much work and what had to be done to come to where we are now. I thought they could do it in three or four months at the max. At the max. And, he must have heard:me say a hundred times, where are we now, where are we now, because of the constant concern of people. And, speaking a little bit to some of the audience behind me, I really need you to understand, this isn't for or against anyone. This is for the protection of a lifestyle in Hawaii. This is to learn from what is happening in Maui, Kauai, and Oahu that we are fortunate enough to be last on the totem pole that we can learn from them. The meeting I had before this was what are we going to do about Puna, and I was surprised learning about the community that was covered by lava some of their concerns of the vacation 20 rentals taking over certain communities. I really want to emphasize to the Commissioners this point. This is about the protection of a lifestyle for Hawaii. This is about not becoming Maui, Kauai, and Oahu where they will all admit, all of them will admit, living on those counties are no longer possible for the middle-class family. All you have to do is look at the median cost of any home and its $750,000 and above. All you have to do is look at certain of the ideal places of this island and see how vacation rentals have multiplied. And, that is what is being threatened, because the very words that are up there. I don't know if it's the same side of Maui, Kauai, and Oahu finding out that this is a very, very profitable business, and I guess it's just common sense. I had a beautiful place that was destroyed by this past lava, and the beauty of it was not my simple home. It was the beauty of what people find so unusually exciting to see of Hawaii that those of us who are born and raised here, we don't even think much about it sometimes. And, I was stunned when we were doing the survey of how many of those homes were vacation rentals, because I bought it in 1971 when I didn't even know-what the term vacation rentals meant because it was nonexistent. And, in that short time, we were almost like 50 percent vacation rentals and going because the people that were buying it or fixing it, finding out how very lucrative it is and I don't fault anyone for making-money. I read in the paper where, some of the testifiers stated that they need this money to supplement their income to survive. Obviously, who fights that, you know? That's a problem of almost everyone. I'm appealing to this Commission and the-people of the audience, not knowing who you are, this is about the protection of a lifestyle for the people of Hawaii:.This is about the importance of what makes this island very special [inaudible] plaee else of planning and that is our zoning. We have to have zoning, or.you will-make, not you, butwe will make a policy unwritten that says use of land will be determined by who can buy the land and use the land. It is of government that protects the usebfland for multiple purposes, including a home. I have nothing against vacation rentals. I am for zoning. I am for the protection of a lifestyle that the people out there depend on us-to protect them,'no different; as I explained to Mr. Yee, this isn't about vacation rentals. This-is about zoning that I live in a residential area, and I know I will not have a, bad example but, I won't have a service station next to Me banging in the middle of the night or whatever because the zoning will prohibit that. It is of the laws that protects a lifestyle. This is no different. So, to the audience behind me, it is not the fault of, you know, making additional income or whatever of investment. And, even that today questions a change because of the Department, not Department of Education, but of property tax of the investment property. By the way, I don't even know what that means. Every property is an investment property to me. But, I need this Commission to really fully understand what this is all about. This is the protection of a lifestyle for the people of this land. This is to ensure that certain kind of businesses, infrastructure, etc., etc., will not infringe because their zoning protects them. Just imagine if we don't act on this like we did not act on it for the past few years where it was not a problem to what the problem is today. Can you imagine what it will be ten years from now or even a year from now? 21 I'm asking for a very strong and favorable approval of this to pass on to the County Council, but not just I will count on staff to fully explain to the County Council what this is all about and stop focusing on a business-only and start focusing on our responsibilities of zoning importance. And, that's when I found out first, I asked the question, well, how does Kauai address this, and I'm not fully, you know, akamai, about that whole law, but the answer to me was well, you can have it only where it is zoned hotel or Resort, and it sounded like a nice way because that's what zoning is all about. I thank you for giving me this time, and I truly hope that those in the audience, I am sure there are some in there that really, you know, believe in the good of what they're doing. I'm not questioning that. I'm just questioning the importance of zoning; the importance of protecting a lifestyle, and keeping a little bit left of what is left for people. Thank you very much. CLARKSON: Thank you. Okay, at this time, we'll continue with-the next four testifiers. I have listed here—where are my glasses—we're going to do a few. Laura-Owens, Steven [Stefan] Buchta, and actually, I'll do just three to begin with, Barbara Jeremias.=Would you please come forward? Who is not—you're Laura? - OWENS: I'm Laura. BUCHTA: I'm Steven [Stefan]. CLARKSON: Steven [Stefan]. And, Barbara? Is no longer here. Let's see, the Pepe`ekeo— let's have Jaerick Medeiros:and=either Garcia or Lito Arkangel? Ok, they left. GARCIA: I'm Jaerick.-Lito left. CLARKSON: Okay. Would-.you all raise-your right hand, please? Do you swear or affirm to tell the truth on this matter before the Planning Commission today? TESTIFIERS: I do/yes. CLARKSON: We'll start—please introduce yourself into the microphone. Always use the microphone when you're speaking so our secretary can pick it up, and"proceed. GARCIA: Thank you;Chairman. My name is Jaerick Medeiros Garcia. I'm from Pepeekeo. I am with the Pepeeekeo Association. My concerns here today is all this talking that they did, sixteen of these stuff that they were talking about. Not once I heard about security for the neighborhoods that they're coming into. I'm a hotel worker for one. They're taking jobs away from me. This week, we're down to 30, 20 percent. Next week, same thing. We're like that 'till December. They don't speak once of providing jobs for the locals in our neighborhoods. I just think everything is so vague. I really think they should go to each neighborhood, talk to these associations so we can get the feedback from all the people in the neighborhoods because all I hear and see is that old mighty dollar. That's what I see. No give back to the community. I assume that if any women or child gets sexually assaulted, will they be responsible for these things? The resorts provide security. We don't know who is a sexual offender coming into our 22 neighborhoods. Personally, I work in the hotel, I come home, we have a farm, I see these people that staying in bed and breakfasts not respecting the signs on our streets, speeding up and down the road, hitting potholes making them bigger. They don't care. What is these owners doing for it? Nothing. They're collecting that old mighty dollar so as an association, I would like be able to charge these people for an association fee somewhere around three grand. Never mind this $250 thing. It's a joke, $250. What they going do with $250? You know? Three grand a month, provide security for our neighborhood, neighborhood watch, we hire from within the community because why? They're not providing no jobs for our community. All right, so I want toget out there, these things are so vague. Theyneed to make things g � just � g pono. Take care their kuleana. Make sure that the people of our community get to have Hawai`i, keep it Hawaii man, not making a resort right around the island. That's crazy. But, please, sorry, thank you for your time. Thank you for giving me the time for speak. Aloha. CLARKSON: Thank you. Next. Please introduce yourself. OWENS: My name is Laura Owens. I'm an owner/operator of the Rainforest Bungalow here in Hilo. I am a registered and licensed Airbnb, so I'm happy to answer Airbnb_,questions for you. I live on the property, so mine is a hosted unit. I vote,^I pay GE taxes, and I pay_TAT taxes. I'm self-employed. I do not have a 401K or a retirement plan. My unit is my retirement plan which helps me offset the high cost of living on the=island. The bill has many good points. I believe all units should be registered and should be paying taxes. What I don't agree with is notifying the neighbors. I live in a very small neighborhood of only ten homes, and they don't notify me when they're"having parties or, you know, loud events, and I shouldn't have to-notify them if I have guests on my property. Airbnb actually helps owners vet their guest which kind of answers his question, how do we know. Airbnb renters actually, you know, have signed up. They provide identification, etc. I also believe that all units should be included and that includes the farm and the ag properties. Not everybody wants to stay in a resort area. Vacation rentals offer something hotels can't a chance to live like a local and share our special lifestyle here. Vacation rentals fill this need and provide tax revenue to the State. The money I make and the money my guests spend stays local. It helps support local jobs, shops, restaurants, skilled labor, and other local businesses. Hawaii relies on tourism, and I'm happy to be part of that industry. I am contributing to the State. I'm not taking anything away from Me State. So, I'm for the bill, but I think it still needs a few refinements, so I'm happy to answer any questions. CLARKSON: Well, yeah, let me ask you that question that I asked Maija. Who collects the money, and who pays the TAT? OWENS: I am responsible for currently for paying the TAT. Some rental units are not registered, and they're paying nothing. 23 K CLARKSON: No, but I mean between you and Airbnb. Do people make their payments through Airbnb— OWENS: —Yes— CLARKSON: —and then they send, do the send the TAT to the State? OWENS: No. Airbnb— CLARKSON: —They send all the money to you—. - OWENS: Yes. I am responsible. I receive'all the money. `It's paid through the Airbnb platform, but I am responsible for filing thostaxes. CLARKSON: Okay. Any other questions for this,:testifier? RAFFIPIY: I have a question. About the security,issue, you said that they_provide ID cards and you vet it. How do you vet it? _ -; OWENS: When, I believe, there's soiree Airbnb representatives here. They may be able to answer that question, but not only am-I.0 owner, but I also_stay in Airbnbs and I provided identification to Airbnb and provided information:about myself RAFFIPIY: And, but there's no way that you will know; you know, the guests that you're, that you're having other than their identification,-right?. OWENS: No, that's correct. RAFFIPIY: Okay. OWENS,:- I mean, yes, that's correct: CLARKSON:=Is there any— RAFFIPIY:, —Thank-you.— CLARKSON: —Excuse-me. IS there any formal guest review thing so that as people stay in different Airbnbs, they buildup either a goo reputation or a marginal reputation OWENS: —That's correct CLARKSON: or their— OWENS: —Each, yes— CLARKSON: —or does- 24 OWENS: —Each host is reviewed, and each host can review their guest, and it gives the host the opportunity to say, you know, this person was noisy, they're messy, they were disruptive, they disrupted the neighborhood, I had complaints against them, and that is something the guest doesn't see until they have also left a review. But, I get the opportunity to say this guest is a problem, and other hosts will see that. CLARKSON: And, okay, and presumably if enough bad reviews come in, they are prohibited from using the platform? OWENS: Well, I mean, it's really up to the host if they want-to take a chance with the, somebody that has a really low rating and has had problems-in the past. I personally wouldn't. I look at every guest that has asked to stay at my unit. I look_ at.all their reviews to see if they are a problem. _ CLARKSON: Thank you. Any other questions? Please introduce yourself and proceed. BUCHTA: Hello, my name is Stefan Buchta, and;I spent the last six months_living and breathing Airbnb. I presented to the County Council:--I've stayed in about nine Airbnbs in the last few months across different areas of the island. I've stayed in Jerusalem. I've stayed in Germany. I've stayed on a hundred Airbnbs:onthe mainland, and yes, it's pretty much accurate. I have a profile as a very frequent Airbnb guest that people can look at, and they can see, you know, to some extent, the hosts are not very good al-Commenting on me. They usually send me one sentence, you know?..Some hosts thatI had haveactually reviewed me as a guest,but most will say, oh, Stefan Buchta was quiet and nice and:kept to his=work or whatever. So, I don't know, individuals spend more time`reviewing More than hosts do about their guests, so you have to take that with a grain of salt. But, when you book an Airbnb;you do see a listing. You can look up a guest, and if you're willing as a host, if you.put that work in which, I don't think that a lot of the hosts that I stay with actually do, but some do; you know, if the commercial hosts that have many listings, they don't do that. They basically book you right through. But, a lot of the smaller hosts that pride themselves, they do. Okay, so well let me step back a little bit: I want to give you a little bit of a perspective. I've actually gone out to Oahu. Looked at a lot of rentals there, compared them with here. Let me put this in context. I was thinking about another area where society went through something like this, and I think it was smoking, right? I think our idea of smoking has radically changed over the years. Think about Humphrey Bogart, the great actor, smoking cigarettes in a classic movie and earning an Oscar award, but today's smokers, they're forced to stand isolated outside theatres. So, this evolution has been driven by discovery showing harm, you know, including lung cancer and how they expose non-smokers and highlighting the need for protection by public health policies. We didn't know about that harm initially. We assumed that smoking was cool, and society was embracing it. And, like Harry Kim said, there could be harm, and in the Airbnb 25 world, and this is globally, this has nothing to do with our islands, we're getting more aware of the harm that's caused when this behavior runs wild through the Internet. Okay, so there's a similar kind of societal recognition of harmful effect worldwide around the Airbnb, and here in Hawaii, it's seriously affecting local residents. We're clearly, we all knew we're not building enough housing supply. Out-of-state buyers are running wild. In our Keaukaha neighborhood, 64 percent are out-of-state owners. Airbnb is depleting the existing supply. In Hawaii, about 40,000 homes have been entirely removed from the market. And, affordable housing on that rate is not being built. Property prices and long-term rents are rising up away and out of reach of local incomes. And, so that's kind of the background. There are many short-term rental ordinances throughout the nations. I've looked at them all. Here's how Bill 108 differs from them, and I think you should really know this, because we're kind of in this isolated bubble just looking at Bill 108 but what about others. Unlimited grandfathering, Bill 108, offers nonconformance certificate to 5,000 illegal short-term rentals out there, and what-it really does, it creates a path to legality. You could argue with Amy Self whether they are really legal if you look at the Zoning Code. I looked at 20 mainland short-term rental bills from San Francisco to Berlin to'Maui County. Nobody else grandfathers everyone. It's unprecedented. There is no bill out there that offers nonconformance to all the different people who are out there now no matter how many they operate. There are no serious limits. Bill 108 doesn't cap the number of short-term rentals an owner can operate. All the mainland bills out there_I can supply_you with independent research limit to one or two. There's not a single bill out there that allows more than two per owner. We do not have a limit in the ones that you can be..grandfathered in. We're saying we're preventing it going forward,but no enforcement relies on zoning violation process and fines a hundred dollars a day. If you open up the Star Advertisertoday, it will inform you that Honolulu is just debating $25,000. GARCIA (from audience): This is the Big=island. This is the Big Island. BUCHTA:_I know, but a hundred dollars a day? Gimme a break. I mean, you're making tens of thousands. I-can show you a host—I can take you after this meeting out to a host GARCIA (from audience): [Inaudible] HALL: Sir, please. CLARKSON: Let me remind the audience to please be quiet, and please wrap it up, sir. BUCHTA: Okay, I'll wrap it up. So, I want to emphasize Bill 108, this kind of nonconformance permitting without enforcement in serious limits, serious enforcement brings the courts and fines don't do it because it takes a year and a zoning violation process to collect anything, will do serious damage to affordable housing especially given the displacement of so many people by the volcano. Some cities are in preliminary stages of understanding, but a lot of them—San Francisco, New York, Santa Monica, and Maui—Kauai is not a good example. They messed it up. But, Maui is a good example. 26 CLARKSON: Please—please wrap it up. BUCHTA: We're, you know, you're successful implementation that we could look for best practices. CLARKSON: Okay, thank you. BUCHTA: Thank you. CLARKSON: All right, we're going to take a five-minute break-at this time. Thank you all for your testimony. I didn't ask if there were any questions._No? Okay. We'll be starting next with Phil Barnes, Ranae Ramsey or Bamsey and Sarah Moon,and Axel Kratel. Chair Clarkson called a recess at 11:09 a.m., and.the meeting was reconvened at 11:18 a.m. CLARKSON: Hello everyone. I'm going to call-the meeting back to order, please. I think all the Commissioners are here. Okay, thank you. Would you all please raise your right hand? Do you swear or affirm to tell the truth on this matter before the Commission today? ii TESTIFIERS: I do/yes. CLARKSON: Thank you. We'll start on the makai end here, and please introduce yourself Tell us where you're from andthen proceed. MOON: Hello, my name:is Sarah:Moon, and I live in the Keaukaha area down by the Four Miles Beach and CarlsmithBeach arid Richardsonl3each, and we have seen an increase in mega- houses going up or being developed for Airbnb short-term vacation rentals. I had a little history on our community association;but since time is short,just know that we've been keeping an eye on this__neighborhood for 40 years with an established community association sC4lled the Leleiwi_Community Association. And, we work with the Parks Department on maintaining and building trails. So, we believe that the whole neighborhood should be notified when there's going to be a new development of a short term vacation rental. Now, it is 300 feet and the instance in our neighborhood was a fellow_justnotified his closest neighbors, and they were all himself. He owns three houses down right across from Richardson's, and they're all short-term vacation rentals with huge groups of people impacting our parks and coastline. So, we have our research that shows that short-term vacation rentals are on the rise. Of the 42 houses in our area, 16 are short-term vacation rentals, and then there's two condos down there, and they have about 5 to 7—I don't have the exact number. The whole island has 5,000 short- term vacation rentals with an estimate of 3,000 more that are unlisted. No other bill in any other city allows grandfathering in on such a large scale. Of the 5,000 short-term vacation rentals listed, less than 50 percent have hosts. So, is the Planning Department equipped to deal with 27 2,500 permits? They need a task force like Santa Monica that tracks down short-term vacation rentals and collects fees which actually pay for their task force. The purpose of the bill according to Amy Self is to register and find out who and where the short-term vacation rentals are located, but our committee has found a way to locate short-term vacation rentals. It's a complex method involving on-line research, and it takes an expert IT person. Malia Ho said that the tracking down of legal and illegal short-term vacation rentals will be complaint driven by neighbors. This is unacceptable. Complaints are not followed up right now by the Planning Department. These are my main objections to Bill 108. The wholesale grandfathering of—which means the nonconforming use permit—of all short-term vacation rentals;_iio matter what they size or form and no proper staff to do a proper job of enforcement..We've.got to beef up the enforcement. We talked to the County Council Planning Committee. We presented,a. 90-minute presentation to them, showed them where all our, show them all our data, but their amendments to Bill 108 are not enough. Too little and maybe too late. =I compare short-term vacation rentals to invasive species like the coqui and the fire ants. Now they".got a big free foot. in the door, and we need to get them regulated properly. Thank you. CLARKSON: Thank you. Any questions-for—I just have alquestion. You had a number, five thousand. I mean, where does that number come from? Is there, to your knowledge, who is keeping track of the rate of increase in vacation rentals? MOON: Our community action group. We have an IT expert that used to work for Larry Ellison. He knows everything,.and he's found,a way to—he showed it in the 90-minute presentation to the County_Council: CLARKSON: Well, I'm sorry, we ' don't have the time to do that. I'm just wondering in your opinion, how fast are vacation rentals increasing? What's the doubling time so to speak for the number Of short-term vacation rentals? MOON: I only can speak for my neighborhood, and it's been almost weekly, almost monthly, a new vacation rental,in this very small neighborhood that is in our coastal area that the local people do all their activities—swimming, fishing, surfing, throw net. And, already we've seen big groups jumping into lagoons and stomping on the coral, and it's just going to degrade the whole area. CLARKSON: So, ten years ago, how many rentals— MOON: Ten years ago— CLARKSON: —You said there were 16 out of 40? MOON: Yes. 28 CLARKSON: Ten years ago, there were how many do you think? I'm just curious. MOON: Well, we had bed and breakfasts. CLARKSON: No, but I mean MOON: —But, um, I don't think there were any. CLARKSON: Okay, thank you. MOON: Yeah. CLARKSON: I'm just, we'll go to the next person now. Please introduce yourself and proceed. KRATEL: Yes, hi, my names is Axel Kratel. I'm a farmer up in lower.Hamakua, and we do home sharing, so that's a hosted rental to help support our farm. I've been in these hearings from the get-go, from the very beginning. So, I've heard,a ton of testimony around the issues. I'm here in support of Bill 108. I think there's been a tremendous amount of work been done by County Council, the Mayor's office, and Planning to.:come:up-with a bill that really takes into account all of the forces that work vacation rentals going_;crazy versus, you know,what kind of accommodations do actually help locals-be able to make ends-meet. I'm speaking on the behalf of a farmer, and I also am very active in the fanning community, so I've spoken to a lot of other farmers who are very much in the same situation as I am. We're a family farm, so we're small scale, and we do`get a-mix of guests coming through, both either farm workers when we really need them, and when we don't have crops, we rent out to tourists. But, we bring a very specific kind of tourist to the area. They're basically farm tourists, and what that means they're people who are happy to see,cows. They're happy to see sheep and goat. We have a lot of livestock, and we're a real farm, so it's not like—basically, the kind of guest that we want are the-guests who,are going to be happy in that kind of environment. And, that's what; Hamakua should=be about farming. It should remain rural and, and the hosted rentals actually support fanners.with additional income to be able to make ends meet. I know someone else brought up the notion of the coffee farmers who have facilities that when the crops are being harvested, you've got the workers in there, but when they're not when you don't have a need for the workers; then you can actually accommodate farming guests. I think that's very important for Hamakua to be able to have that farm tourism to help support all the small farms. There is a there is a vision to have Hamakua become, for example, the Napa of cacao, of chocolate. So, these are, this is the kind of rentals that actually help, help Hamakua. So Bill 108 does not include hosted rentals. I just want to speak on behalf of hosted rentals that that's, you know, we very much need that to be able to make ends meet and help locals, so, thank you. CLARKSON: Any questions? 29 BAMSEY: Myname is Mrs. Bamsey. I live in South Kohala. Nothingagainst transient Y g accommodations, Airbnb, VRBO, but Bill 108 must prevent hotels, mini-hotels, and hostels in residential neighborhoods. The bill needs to prevent problems using black and white methods, when those were right up there, the Planning Department had a lot of questions, what do normal people, how are they going to rate it. It's not written in clear speak. I would like to see things that are more clear such as no more than two spaces can be listed as a transient accommodation, zoned single-family, no more than two transient vehicles can be on a property, no more than five transient people can stay the night per a single-family. Ten is too much. I will explain to you what my situation is. There's a six-bedroom hotel operating out of a house zoned single-family right next to mine. That's five to six car loads of people a night. Five to six car loads of people a night. I, occasionally, will host an Airbnb for two people to help pay my mortgage. Okay, I can't even do that now because there is S. much security problems, in the neighborhood. I've had people walk into my house thinking theyre at the hotel next door in the middle of the night. Last night, there were people looking in my bedroom window, tapping, going where, where is the hotel? They were at-my bedroom window looking in my window. So, it's not that these things are bad. It's that it has to be plain speak, and it can't be this many people. It's too many people. You need to understand that in some locations like Amsterdam, Portland, San Francisco, Airbnb automatically collects occupancy tax from guests and sends itito the tax authority on the host's behalf Require Airbnb and other website sales to provide this for Hawaii County so we do have accounting for it. No tax—and it's not Airbnb._ For example, the place next to me, they are on 40 websites. They are On Booking.com, Travelocity.com, Hotels.com. If you look on Google Maps, they actually show up as a hotel in our village; and the only other place that shows up is a restaurant. They show up as a hotel.-;.So, it's not Airbnb. It's what the Mayor said. It's zoning, and Bill 108 does not have clear speak for zoning, and it does not address that. We are no longer our zoning for a residence. Our zoning is not for our lifestyle here in Hawaii. Please note that no tax documents are issued until a person has earned over $20,000 and has had 200+reservations from a single site. They don't get tax documentation, so, for example, the hotel next to mine, it could have nineteen-thousand from Booking.com. It could have nineteen thousand from Hotels.com. It could have nineteen thousand, and no taxes are reported to the other agency. So; please take that note that that's something that we need to consider. I would, you know, maybe look into having only advertise allowing these to be advertised on-line via websites that collect and send tax earnings to the authorities. The property owners live in the hotel next door, so I also have a problem that this does not—Bill 108 does not address what we've been dealing with, and we have submitted for a long time to Council and to the Planning Department these problems, and they have not been addressed because according to the Planning Department, they have to be announced when they come so, of course, they're not going to have all those people there. The Planning Department also wouldn't accept my photographs of all the pictures and what not, so Bill 108 doesn't fix this as written, as written. It does not fix it. CLARKSON: Thank you. Any questions for this testifier? 30 YEE: Question. In the area you live in, is there a CC&R, and does it exclude vacation rentals? BAMSEY: It has similar speak to what I have read or understand from the Planning and zoning ordinances of no more than five related people is in County. In our association, it is no more than three non-related. And, we have talked to them, and they said talk to County. We've talked to County. County says talk to the association. No one takes ownership of the problem. YEE: Okay, thank you. CLARKSON: Any other questions? If not, please introduce yourself and then proceed with your testimony. BARNES: Surely, yeah, my name is Phil Barnes. My wife, Diane, and I have been doing vacation rentals since the early nineties. And, I've-heard some concerns raised about noise, and I can just, you know, give our experience in that 25 years of doing these before the Internet was even really there, and we have only had neighbors complain in I guess once in 25 years. Maybe we're just extraordinarily lucky, but we kind of keep an eye who we're renting. We're very present. Talk to 'em when they check in. Tell `em about, you know, neighborhood noise levels and what's expected, and we haven't had any problems with it. But, I can see where it could be a huge problem as some of the other people have mentioned,but we haven't had it. I remember that as the vacation rental business started to take off, one of the strongest advocates was Gary Safarik that used to be on the County Council, who was our rep. We lived out in Puna at that time, and he stressed that these rentals were an excellent way for local folks to be able to generate an income from the tourism industry which is obviously, drives the economy in our State. Okay, you hear the term "mom and pop"businesses a lot. It's oftenpointed out that the profits YpP from the money that they make stays in the community. Hence, these dollars are recirculated more at the local level. Well, most of the "mom and pops" in the tourism industry are vacation rentals. This is the "mom and pop" end of, of the tourism industry. The profits are usually not going out of State or even internationally to a giant hospitality corporation. Every form of business needs regulation for a variety of reasons, and I can see clearly now that the time has come that the vacation rental industry needs some regulation. However, I do see some problems with the 108, but I'm glad that this, that 108 has come up, because something needed to happen. And, hopefully, this can be tweaked and worked out to get a decent resolution. Okay, however, okay, by far the largest problem with the vacation rental industry is the number, the large number of illegal vacation rentals that do not pay any taxes, any TA or GE, and as Sarah stated, if you've got a good IT person, they can cross reference the vacation rental sites against the State Division of Taxation. That seems to be that would not actually be rocket science to figure out who the crooks, if you want to call them that in this case, are. So, I think that can be done. Two issues that I see in regulations that are a big problem is out-of-state owners of vacation rentals and very high-end vacation rentals, and these two issues tend to be linked. If the vacation 31 rental owners live nearby and are doing a lot of work themselves in hiring local folks to work for them, and renting their units out affordably, that's an entirely different style of business. I can't say that I have a handle on the constitutional limits of dealing with the out-of-state owners in this, in some kind of regulation like this. It probably is unconstitutional. If there's any way that could be dealt with to keep the local people running the vacation rentals, it'd make a big difference. So, those out-of-staters spending the huge bucks are obviously not running "mom and pop" operations. Thank you. CLARKSON: Thank you. Any questions for this testifier, Mr. Barnes? No? Thank you. You may all be seated. Richard Henderson, Dan Whetstone, Jordan Sonner, and Morris Niimi. Would you all please raise your right hand? Do you swear or affirm to tell the truth on this matter before the Planning Commission today? . TESTIFIERS: I do/yes. CLARKSON: If we can start down here. Would you please introduce yourself, where you live, and proceed? You have three minutes.. SONNER: Okay, thank you. Hi, everyone,my name is Jordan Sonner. I have been following this bill pretty much since it was first brought to-light by the Council either the end of 2017 or the beginning of 2018, and, you know, we were having talks with the County Councilors. You know, a lot of concerns as vacation rental owners and hosts, was the economic impact of taking the ability of new rentals away: And, we're actually in this really interesting position that we've kind of gotten to see it because of the eruption.-I mean, you guys all know, our economy is hurting right now, and this is—you know, we've lost vacation rentals, but most of all, we've lost our tourism. You know, the gentleman behind me had mentioned that the hotel he works for is it, 20 to 30 percent occupancy? A lot of thein are like that right now, and a lot of vacation rentals are running at 20 to 30 percent occupancy: Several of them are being converted to long term rentals just because there's no tourism right now. And, in the long run, if you look past this downturn, building our way back up is going to take a lot more especially if we can't have any new vacation rentals as the years go by in zones outside of the Resort zones. Especially in areas like Puna, for example. You know, we've lost a lot of our rentals, and without a way to get a lot of'em back, you know, there's no hotels down there, and there will never be Resort zones down there because of the high lava hazards. And, people don't really want the big resorts in their communities anyway. You know, one other point that I would like to touch on that was discussed quite a bit today is the neighbor policy. You know, sending out notifications to the neighborhood, and there was a mention of posting the addresses of the registered vacation rentals on-line. I see this as the other side of the security issue. If you have a house in a neighborhood that you know is going to be vacant, you can, you can case it basically. It makes the house a target for theft and for vandalism. And, whether that person is an on-island host or an off-island host or whatever they are, putting houses out there to be targeted is not okay, especially because things happen now and, you know, they're not taken care of. 32 I'm a licensed real estate agent, and if you talk to any other licensed realtor on this island who's had a vacant listing, that is the epitome of a vacant home that is publicly put out into the Internet, and it happens. The homes get ripped off. I don't know any realtor who hasn't had it happen themselves or somebody in their office where somebody sees the house is vacant on-line, it gets broken into, the belongings get taken, the appliances get taken, the house gets squatted in. So, it creates more problems within the community. And, that's all I have. CLARKSON: Any questions for this testifier? If not, please proceed to the—introduce yourself. WHETSTONE: My name is Dan Whetstone. Imagine living in a hotel room. Also imagine that this hotel room is located next to the hotel swimming pool. -That would be a close description of what we have to live with most days at our home. Since the vacation rental next door has four bedrooms and a swimming pool with a 20-foot concrete slide, we-,get the experience the repeated slamming of car doors when the six to ten guests arrive, usually in two to three different vehicles, and the beeping of the horns as they lock the vehicles. Soon after arriving, the guests usually including two to six children hit the pool., So, most of the day consists of kids yelling at the top of their lungs especially as they go down theslide with the adults pitching in with lots of yelling also: As each day winds down, the adults usually start to congregate on the back lanai to eat arid drink: Of course, thisis almost always accompanied by loud talking and laughter that many time=goes ori, many times goes on until late. I forgot to mention that this hotel has a banquet room also. On at least three occasions in the last year and a half, the vacation rental has been rented out as an event venue. Twice we counted just over a dozen cars parked on the street and in the driveway with loud music and lots of noise. A few months ago, there was'an event that had 21 cars out front and live amplified music that went on for hours. We bought bur home a little over 18 years ago on.a quiet cul-de-sac in Honomu. In 2015, my wife and I both retired from-employment with the State of Hawaii. Our intention was to spend a lot of time at home enjoying the peacefiil neighborhood. The house we remodeled just the way we wanted it and our wonderful backyard in ocean view. Well, as I described before, that only happens on rare occasions, and even then every time a car door slams, we wonder whose arriving next door now. My wife and I beg you to find-some way to not grandfather in this existing vacation rentals. Why are these non-resident vacation rental owners' rights given precedence over the rights of people in their residential neighborhoods just trying to live peacefully? On many nights, we go to bed with our hearts pounding and a sick feeling in our stomachs after listening to the resort next door all day and evening. As soon as we discovered the new owner was using the house as a vacation rental, we filed a complaint with the Planning Department and got a letter back stating that the Planning Department does not regulate properties used as vacation rentals. Isn't there some process where the current neighbors should have been notified of the intent to run a business in our neighborhood? Shouldn't we all been able to have some kind of recourse? Once again, I respectfully ask somehow, someway that these existing vacation rentals not just be 33 grandfathered in across the board but are looked at in a case-by-case basis and evaluated on what types of neighborhood they are located in and how their size and amenities might affect the neighborhood. Also, can anyone tell me whether the grandfathering in would go to the owner or the property? If the owner sells, would the business still be considered existing or would it then be considered and not allowed in a residential area. Thank you for your time. CLARKSON: Thank you. Can someone from the Planning Department clarify that? Does the grandfathering of the vacation rental go with the property regardless of ownership? YEE: Yes. CLARKSON: Okay, it would just, they could just sell to anybody and continue using it that way. Any further questions? SONNER: That was in the original draft HATA-FINLEY: Microphone— SONNER: [inaudible] wasn't that taken out? CLARKSON: The answer we got from the Director was thatgrandfathering, nonconforming use permit goes_with the property. __ = any _ HALL: Certificate. CLARKSON: Certificate. - _ HENDERSON: That was only if the new owner wanted to continue it. CLARKSON: ,Correct. HENDERSON: If they are in a nonconforming use area, they do. CLARKSON: I'm assuming that.you're allowed to not have a short-term vacation rental if you don't want it. I'm sorry. Ifthereare no further questions, would you introduce yourself, sir, and present. - HENDERSON: My name is Richard Henderson, and I am a realtor and can corroborate what Jordan has mentioned about posting addresses of vacant properties, partially vacant in the year. It is a target for vandalism, and it is rife and going on all the time. I'm here to talk about this bill, and this bill is not good. And, it's not good because the first recommendation to change was to rename the bill "Un-hosted Vacation Rentals" and that's where the problem has been. From the very beginning of this, I followed it. I've been testifying. 34 vacation rentals are problems because there is no one there to enforce what other And un-hostedo people have said in review of the guests and make sure that they behave. But, what I'm talking to you about today is common sense with calling the police for disturbance of the peace. We have laws on the books that talk about disturbance of the peace, and that's what this is about. You're having disturbance of the peace in your neighborhood, that's going on. When you call the police, the police should come down and enforce the law. If that requires them citing these people, if they have to appear in court, then so be it. That's what has to be done. But, now, you call the police, and they don't want to deal with disturbance of the peace. So, I'm asking what is this bill for? To take over the police's job of enforcing the laws that are already on the books? I mean, this is crazy. We spent so much time and energy with this bill and doing it, and it's all because of the disturbance of the peace, and we have laws on the books that deal with that. We don't need zoning. We don't need unregistered regulated businesses. We just need a little common sense in getting the police-to do their job, and the courts to enforce it. It's already there. Thank you very much. CLARKSON: Any questions for this testifier?: If riot, please introduce yourself and—. NIIMI: My name is Morris Niimi, and I'm a resident:of Hawaiian Paradise Par-k,-and I live on an agriculturally zoned lot. And, I'm speaking in favor Of-Bill 108 with some changes, and I have some reservations, but I think it is a positive start for the residents and the people of Hawaii County. We have hosted, my wife arid I,people from all over-the world at Our hosted vacation rental, and we've been operating for'6-1/2 years. My wife and I are employed full time and receiving additional income from operating or hosting at our rental. I currently serve as the pastor of New Hope Christian Fellowship Church in Pahoa, and my wife is an administrative assistant at the Subaru Telescope.- Our short-term vacation rental allows us to receive additional revenue which allows us to live affordably in Hawaii County. As you know, living expenses continue to increase along with the property tax,-general excise tax, transient accommodation tax, vehicle weight tax—these are all taxes that have been increased just very recently. We pay a lot for insurance, food, gas, electricity, building and grounds maintenance, even medical insurance is very, very expensive, and every year they increase. When people stay with us, they help our economy of the island by providing finances for the government through the additional taxes that we pay, and when our guests visit the island, they purchase food, they rent cars, they pay for fuel, they pay for tour fees and park fees, and they help us when we hire cleaning help, maintenance help, grounds help, and upkeep helpers, and they help create—they help and create and sustain jobs in our community. I have concerns and questions about the outcome of Bill 108. I have concerns for the future generations of children and my son who will someday have to make a living for himself here in Hawaii. Will he be able to operate his own business or short-term vacation rental if he chooses 35 to do so? And, I'm concerned about how he will generate enough income to live in Hawaii County. Another concern is the question of would we be able to host a vacation rental if we had to relocate to another part of the island. With the recent crisis with the lava flow, that is a concern for many residents who had to relocate from Kapoho. Many questions still exist. If there is an outcome—if there is a one-time land use exemption to allow a property owner to host a vacation rental on agriculturally zoned—I understand and I have clarification today that it really doesn't apply to me, but what will be the qualification for-that rezone, well, that one-time exemption and will the fee be a one-time recurring, or recurrirng fee that has to be paid on an • annual basis. I believe that it is very important to develop and sustain agriculture on the Island of Hawaii. We have lost thousands of acres in Kapoho and today even the price of papayas and orchids are not available, too, so it really impacts the community in Puna, and I really believe that we need to continue to develop agricultural properties, but at,the same time, it's important to allow the members of the community to maximize the income_they can:receive from diversifying. CLARKSON: Thank you. Are thereany questions for this testifier from the Commission? No? Thank you, all. Please be seated. Wili Stephanie Donoho,Donna Herbst, Tara Frazier, and Louisa Lee please come forward? Please raise your right hand... Do you swear or affirm to tell the truth on this matter before the Planning Coinrimission today? TESTIFIERS: Yes. - CLARKSON: Would you please introduce yourself, Stephanie? DONOHO: Aloha,my name is Stephanie Donoho. I am the administrative director for the Kohala Coast Resort Association'which is comprised of all the resort properties and hotels from Mauna Kea to Hualalai. Previously, from 2006 through 2014, I was the tourism specialist in the Department of Research and Development for the County of Hawaii. I've also served as the executive director for the Visitor Aloha Society of Hawaii which helps visitors who experience crisis while they're travelling, and I'm on the Board of Directors for the Hawaii Island Safety and Security Professionals Association. All of those roles that I mention help in form my testimony today. I truly appreciate that this is before your consideration, that this bill is before this body, because it has been a long time coming. As Mayor Kim mentioned, I served in the previous Kim administration and in the previous Kenoi administration and often as the tourism specialist was asked many of the questions that Joe has been asking today. How many vacation rentals do we have on this island? It's almost an impossible figure to track, but I wanted to provide a couple of resources to you. Hawaii Tourism Authority does a visitor plant inventory every year. Their most recent one was in 2017. It's run by the Department of Research. They think that there are 2,600 vacation rentals on Hawai'i Island out of an 11,000 inventory in terms of vacation accommodations including hotel rooms,bed &breakfasts and those types. The Director of 36 Research, however, and you can find that on-line on Hawai`i Tourism Authority's website under the research tab. There's a section called visitor plant inventory, and it's broken down by Hawaii Island and by neighborhoods within Hawaii Island, so I highly recommend that the Commissioners consider that. The thing that the research director noted, though, is because the same property can be advertised on multiple platforms and because addresses are not listed, that there may be duplication of the ones that they are counting and there also may be undercounting of ones that are not using more traditional platforms, and so it's a very fuzzy figure. I know when Bill Takaba was the Director of Finance, he asked me to get a list of transient accommodations tax license holders as the Research & Development Director for the County of Hawaii;=and the Department of Taxation would not provide that from a government office to another government office so that we could start trying to track this. So, I appreciate that the Planning Department and that the County-Council is trying to get a handle on how many are there and how do we_count them, because in that role, we're often asked to do economic analysis and it's impossible when you don't know what you're counting. So, that brings up my testimony for this bill specifically. I do think that this bill is a good effort, and I appreciate the-tune that has gone into it. There are so many nuances to it. However, the fact that it's only addressing un-hosted vacation rentals without having some sort of registration process for those that are hosted as well is going to mean that we still have that same problem-of not being able to count, and that's a clear problem. It also makes us unable to communicate, and I bring this up specifically in regard to emergency situations based on my time with VASH and HISSPA. When the Countyof Hawaii Civil Defense has to-sayall vacation rentals in Pahoa need to close because of the eruptive activity or,all vacation rentals.within Vacationland need to close because of the eruptive activity;but don't-know who to-talk to about closing those? Then, we're just speaking in the wind. As we saw with this latest hurricane, Civil Defense sent to my hotel properties direct communications where we had:to provideloccupancy, number of available rooms, what the conditions were like on a regular basis. I don't believe that that's currently happening with the vacation rental market;because we can't even identify who they are to have those communications. As the executive director for VASH, on two occasions, I had people call me, one when they entered a Hawaii vacation rental that they rented on-line that was unhosted that was infested with vennin. They couldn't reach the owner, and they needed to move to another property during Merry Monarch. This was in East Hawaii. Thankfully, I have some wonderful realtor connections who were able to find another property, but that's, that's the current situation with not being vetted. On a second occasion, Japanese visitors rented an Airbnb on-line. The property was highlighted on the website, they made the communication with the owners, and when they arrived, it was a 37 residence home that was not hosting a vacation rental, and the breakdown in communications because they were Japanese visitors thinking that they had taken care of this in advance and someone had received their money, but they didn't have a place to go. It's just ripe for all kinds of misuse. This, in the end, though, is about fairness, and in the visitor industry, I believe we need to be fair. My resorts combined pay more than $50 million annual in transient accommodations tax, GET tax, and property tax. Our rates were raised higher than any other property tax class last year. We employ more than 5,000 people within those resorts. I just encourage you to please consider as you deliberate on this bill the fairness issues surrounding this with the vacation rental industry. Thank you. CLARKSON: Thank you. Are they any questions from=staff,or the Commission? • YEE: Yes. Stephanie, in your discussions with others, was there an explanation for not including hosted rentals? DONOHO: I think it was just political concerns going on honestly, if I'm being upfront. I think that they were worried about it, but I''m thinking about.it more from a registration process and knowing the sheer number of them,-so• CLARKSON: Please proceed. FRAZIER: Hi, my name is.Tara Frazier. I've been in the'vacation rental business here in East Hawaii since 1995.-I know a tot sof professionals=in:this business, and we all have been hoping for some common sense:regulations,-that will enforce taxes, address health and safety issues, good neighbor policies, and accountability for people who are operating in a disruptive way. And, I know from experience;that.when_we11-managed vacation rentals can be operated positively and-without.hurting the:communities. My mairi_concern is moving all vacation rentals to resort areas and the hundreds and hundreds of jobs that East Hawaii will lose: I know dozens of families who lived in Kapoho and lost not only their homes but their jobs as_well since they all worked at the vacation rentals in the community. I'm housing two households of them right now as they try to get back on their feet, but jobs are practically.nonexistent down in Puna and without vacation rentals, we'll lose one of only sources of income for hundreds and hundreds of hardworking residents. The small company I work for supports around 30 independent contractors with the 40 or so homes that we represent, and we also work with dozens of small businesses in the area as well. Almost all of the rental revenue that we get stays here in the community and goes to the housekeepers and handymen and all those other people that we need to keep the business afloat and, of course, and the lack of visitors would have a huge economic impact on all of the small businesses in Puna as well. That's my main point. I also wanted to mention the questions that were coming up about Airbnb and tax collection and all that kind of stuff. Airbnb has worked with local lawmakers and lots of • 38 - J other areas of the country and passed legislation that requires all of the big listing sites to collect • and remit the local taxes. I know it's been presented here a couple of years in a row, but it hasn't passed yet, so I think getting that through would definitely increase the revenue for that, for the locality. That's all I've got. CLARKSON: Any questions about this testimony? Thank you very much. LEE: Hello, hi, my name is Louisa Lee. I'm from Keaukaha, and I heard a lot of testimony today, so I don't want to be too repetitive. I am a mother, and I am a school administrator at the Hawaiian immersion school in Keaukaha, and I really want to speak from the perspective of someone who is really concerned about what the future is for Children in Hawai`i when short- term vacation rentals are having such a huge impact on the,availability of housing and affordable housing and the neighborhoods especially in coastal areas. ;Soy specifically in relation to the bill, I live in a neighborhood in Keaukaha where within a:block and a:half of me there are 12 homes. Eight of them are now un-hosted, 4 homes short-term-vacation recitals. Ten years ago, there were no short-term vacation rentals. One owner California own-- of those vacation rentals. There are currently no quotas within Bill'108 that would say within this two-mile coastline, there are only ten allowed short-term vacation rentals. I am a consumer of short-term vacation rentals in other places. I think if anything the experience in my neighborhood has really like crade-me more, a more conscientious consumer. So, I think that there is a need for full-home vacation rentals,but I do think that there needs to be restrictions on how many should be allowed in a particular neighborhood. We see short-term vacation rentals kind of"conglomerating in coastal communities. That's where the biggest impacts, I think, are going to be felt. Places like Volcano.'-Places like Keaukaha. I can see those places turning into Puakos where now people don't necessarily have access to the rich like cultural histories that areihere. There's no educational opportunities left there. There's no way that people are going to be able to afford homes in°these places if this continues to happen. And, my_school students, 240 of them, are constantly in Keaukaha along that coastline. That is part of their learning laboratory, and it's:uncomfortable for me to say come and learn in this community=and come and learn about your history, but you will never live here and you will probably not be able to have access to places like these if we don't start to regulate. So, I am opposed to 1-08 because I don't think that it has the restrictions in it that we need to protect communities. -I;don't think there's any differentiation between like a local owner versus a non-local owner. I think some estimates are 65 percent of vacation rentals in Hawaii are non- locally owned. The ability for communities to continue to maintain partnerships that they have with the County for say, local management, beach community, beach clean ups, even Volcano, cultural places. I think those things would cease to exist if communities are not still in communities. And, then I also want to say, but this is a big business, and you, anybody can go on Netflix and there is currently a Netflix series on how to have a vacation rental. Airbnb alone is a $30 billion a year business. They're opposed to regulation, but they're—we are not thinking about 39 communities when we're just focused on the ability for people to make extra money. Own a vacation home in Hawaii with an Airbnb. So, thank you. CLARKSON: Thank you. Any questions? Donn? DELA CRUZ: Yeah, I have a question. I have a question for Corp. Counsel actually. Can we actually put quotas on vacation rentals? On any area? Is it possible? HALL: When we looked at the other, has any other jurisdiction put quotas? I would say the majority of the time when you're dealing with property rights,_it's really hard to tell people they can't do something with their property. I'm sorry, go ahead. JACKSON: The research I did into City & County of Honolulu,-the bill that they're currently debating right now and that's going before their council, they're:proposing to cap vacation rentals to one percent of the dwelling units in a community planning area. So, they are putting those quotas, those caps. _ DELA CRUZ: So, we could use those caps as aguideline for us then. JACKSON: If the attorneys say yes,'-yes. HALL: Yeah, I mean, anything can be challenged; right? So,Tlike we can put it in place and somebody can challenge it, and basically the court or the Legislature will tell us what we can and can't do. But, I would-have to do more research to get a full answer;:and I'll get back to you on that. YEE: I would also add that in a littlebit of our research, I think it was Maui, one of'em, Maui or Kauai has quotas in certain:areas. And;-without digging deep into exactly how they were enacting, the general comment from the planning director was it caused a lot of problems, too,by placing quotas, and I'm not saying if that's good-or bad. Just saying, you know, that was raised by another:planning director., RAFFIPIY: Question. What is:the homeowner's association, the board, homeowner's board or association what is their position in this? Or, do they have any say in this? Or it's just something that is just allowed in their neighborhood and they just have to deal with? YEE: I think Corporation Counsel, Amy Self, could help respond to that. SELF: Yes, the associations have—you had, I heard a testifier before saying their association had CC&R's. But, it's up to the association to enforce those CC&R's. So, they could, you know, I don't know whatever their CC&R's say what they allow, whatever, they could go to, they could file a complaint against someone who is in violation of their CC&R's. The association could file suit against that person,but it's not the County's—I heard them say to go see the County, but the County has nothing to do with a private contract between the association 40 BAMSEY (from audience): —It's Waikoloa Village. There's three thousand homes. It's Waikoloa Bridge, the association. There's three thousand homes [inaudible]— HATA-FINLEY: —Ma'am— CLARKSON: —Please, please— BAMSEY (from audience): —It's not only [inaudible]— CLARKSON: —We're having discussion between the testifiers and the Commission at this point, and the staff. RAFFIPIY: Can the, in this bill, can the association levy-Charges or just charge—do they have that ability to put in their CC&R, you know, fees that they can charge these businesses in their, within their association? SELF: That's entirely up to the association. Their.CC&Rs is a contract with their homeowners in the association, so that would be a private contract,that the County does not have any authority or jurisdiction over. They would have to deal with " they'd have to go to court.to enforce their CC&Rs against their homeowners. RAFFIPIY: Okay CLARKSON: —Does, oh RAFFIPIY: —Sorry;-and that brings me to the other point. So, if the neighborhood don't know about, you know, the, who is in that area, how would they exercise that option if they want to? You know, `cause I'm hearing some testifiers, they don't want that to be published and the address to be shared-within the neighborhood or with-the neighbors. So, I guess, it should be shared at least to the board;-to the association, so that the association knows who they are if they want to exercise that option if they want to charge these businesses fees? SELF: It's dot-the County's jurisdiction over these things, but I can tell you that the association wouldn't know. :It's their members, all the homeowners in the association. All the—the way it works is an association is the hom eowners, so they're members of the association, so if they don't know, that's their problem.- CLARKSON: Does anybody have any numbers on how many residences are affected by CC&Rs from homeowners' associations that regulate short-term vacation rentals? I mean, is this a significant percentage of the island at all? SELF: That's not something I could answer because it's not—like I said, the County doesn't get involved with private contracts. We cannot get involved with private contracts, and that's what CC&Rs are. It's a contract between the association and its members. CLARKSON: Any further questions? 41 HERBST: Aloha, my name is Donna Herbst, and I have been involved in the industry of vacation rentals since the early 1990's when I actually cleaned vacation rentals because that was my only income as a single mom, and I was able to make ends meet with that, so I appreciated it. In 2003, I did buy my vacation rental. It is in the Keaukaha area. I've had it for 15 years. Never had any problems or complaints with neighbors. Oh, I take that—one time, I think, someone said something about they were smoking, and since then, we've made that a non-smoking building, so that's not a problem. But, my situation is that that building has an association, and we have on our by-laws that short- term rentals are allowed. It is the only one that has short-term less than 30 days allowed on its books. Hilo Lagoon doesn't. Hale Kahakai, Hale Moana, they don't. So, that's a little bit of a conflict with us right now, but the—back in two, it was:about mid-nineties, they made a change, and the Planning Committee took Resort zoning offof the-lower Keaukaha area and stopped it at the Banyan Drive. We used to be Resort zoned all theway down through the end of Kalanianaole Drive. We don't have that anymore.'Yeah, it would probably fix our problem, we don't, so I do suggest that you look at that again and see that that area might-be back into the Resort zoning because we have very, very little Resort zoning on this side of-the island. We're • not like Kona. I mean, Kona, you can do it. You got:it,but;We have what? Three_hotels? And, that's another point I want to bring up,.,is-when we come Merry Monarch and another, some other big events that are coining. In fact 200, we're hosting the International Canoe Vaea Association from around the world, we're looking at 2,600 participants for that. We don't have a place for 2,600 people in Hilo, and we're going to be trying to figure that out. Vacation rentals are a big part of that. Merry Monarch, vacation rentals are a very big part of that. That's our lifestyle. That's our Hilo. You know, we need to be ableto have our guests stay somewhere without having them drive from Kona.- So, I think that there is some important things we should look at. Rezoning the,Resort-zoned areas; it needsto-be looked:at. Also, I wanted to mention that the fact:we've lost so much revenue from Kapoho, from Volcano. Those people there haven't°been ablerio rent for two months. Either the earthquakes and everything were-sq drastic. We°have to look at that income. I would dare to say at least a $100,000 has been lost in the last month and two from all this income of transient accommodations. So, it's a two-sided sword. We've got people we need to control, but I have to say that it's not the responsibility of the County Council or the Planning Department to police civil activities. That's where this bill has gotten off onto I feel the wrong foot. We really came into this to be able to collect money for the transient accommodations, and if we're able to follow some of the lines that were set before us today how we can get a hold of all this transient accommodation numbers, and in two years ago, we are told, as vacation rental owners, that we had to post them on our listings, which I did and most everyone I know did. So, those are out there. I think that that was the intent of the bill in the beginning, was to try to collect the income from these people who are not paying and a lot of them are out of State. I have no objection to having 42 them pay more. You know, they pay when they sell a property. They pay 7-1/2 percent now to sell a property in Hawaii. So, they can pay more than we pay. That's okay, but I think it's gotta be looked at to perhaps maybe think of the term "license" instead of having to go through nonconforming use. That way everyone looks at getting a license for it, and if they are out of line with their license, you rip the license. You take it away. If I have a driver's license and I'm not abiding, they can take it away. If I have a fishing license and I'm not abiding, they can take it away. I think the same thing should be looked at with the vacation rental programs, and I have one more thing to say. That in section 25-4(a)-2, it says that private covenants prohibiting use of any unit as a short-term vacation rental shall not be invalidated by this chapter. I understand that. So, if it's already prohibited, it's prohibited. But, back to my first point. If our association allows it, should not it be allowed'? That's my—I think I_got it =Do I have any more time? HALL: You have about 30 seconds. HERBST: Okay, okay. And, as I—okay, Amy also said that there are kinds of way to get this infonmation, and I strongly agree with that. I'd like:to see the money and time-spent on this put toward that avenue of finding the TATs and collecting the money than trying to find ways to police people and leave that to our ciVil police. = ;; CLARKSON: Thank you. Any questions for any of the testifiers? Thank you then. Please be seated. I think it will be our last group. -Anthony Ambler, Lorna:Groth, and Joey Roth. Okay, there's our last two. Is.anybody expecting to be able to:testify whose name has not been called already'? All right, please raise your right hand. Do:you swear or affirm to tell the truth on this matter before the Planning Commission today'? TESTIFIERS:= Yes. CLARKSON: Please introduce yourself and proceed. GROTH: Hi, my name is Lorna Groth, and I was born and raised here on the islands and I do have a home here as well that we recently:did a VRB on. And, I see the problems on both sides. Pros and cons to everything. I do believe as a VRB owner you must be responsible and do everything that is right,abide by the law, and when it was, when we started, it was with much reluctancy to do so. Numberone,I was thinking, oh, I don't know if I'm going to want these people, all kind of people in_my house. But, we get to check it out and we get to check out the people, and like someone mentioned, you can—it's both ways. And, then I think about the local people who have to deal with people in their neighborhood, and that has to be really, really awful. The regulations, it has to be done. It really has—. Maybe a limit? I live, I get to live here some times and part-time, I live in California. I know a lot of people in California who own a lot of homes in Hawaii throughout the State, and they make a lot of money. The reason I'm doing my home is, for it, when we're not here, it don't get broken into as we did experience that. I do hire 43 people to take care of it, and I have most of my family here as well that go and I got emergency numbers and everything. So, the thing is the committee, the police, everybody has to work together and do something and it does have to be regulated. And, number one, all the local people that have to put up with that in their neighborhood, it has to be the most awful thing to do. And, I do live on the Hamakua Coast. I have about 15 houses in my area, and I made sure all my neighbors was okay that it would be done. So, it's basically the responsibility of the owner and what their end goal is. A lot of'em, you know, it does make a lot of local jobs for the people here which is wonderful. Tourists do bring money in, spend money, everything. Hilo side does not accommodate, does not accommodate, the tourism on this side, and especially with the Puna area-now being gone. So, that's a lot to consider. The police should enforce the law as well=when somebody calls to complain. How are you going to do that? Who knows? Thank you for your time. Appreciate it. Good luck. CLARKSON: Thank you. Any questions from the Commission for this testifier? No? Please introduce yourself and proceed then,_sir., ROTH: Thank you for your time today: Aloha, my-name is :They Roth. I am a host. I hand built a treehouse in Volcano, and people have come to my Airbnbs for their weddings, anniversaries, honeymoons, birthdays, some of_their most important.:life-momentshave happened there. I have also hosted evacuees when the volcano struck. A lot of people=from the Volcano House when it shut down came and stayed at my Airbnb. The main point I wanted to make was"about the proposed ban on new vacation rentals in ag land. A significant portion of this island is on ag land; and in those areas, it's very difficult to make an income. I get to employ my neighbors as handymen, housekeepers, local property managers, and I'm hoping to build another one on my other lot next door in the future. I think vacation rentals are helping the local economy, and it's helping with my income, so I really appreciate all-of your time-today, and thank you so much. CLARKSON: Thank you. Anyquestions? Thank you both. Is there anybody else who is going to be asking to testify? If not,I'll ask for a motion that we close public testimony. - L DELA CRUZ: I make the motion to close public testimony. RAFFIPIY: I second. CLARKSON: All those in favor? - • COMMISSIONERS: Aye. 44 CLARKSON: Opposed? Motion carried. I'm just pondering the agenda. I think that our discussion of a motion for action is going to be pretty extensive. At least, I have some comments. And, then we also have items on the agenda having to do with review of the Charter Commission. HALL: We should probably just finish it, though. I think everybody's here. We've already lost a lot of people already, but I guess [inaudible]. CLARKSON: Well, do they—public testimony has been closed. You mean, out of courtesy, so you want to hear what we do? HALL: That's why they came I think. CLARKSON: All right, we will discuss this item on the'agenda ._:Finish this up and then break for lunch and come back with our Charter review. Do we have a motion for action? RAFFIPIY: Can I—can I still question? I'm-I want to ask a question.`Do we, so we're, if we're going to move for action, that's with the recommendations that we have,right? HALL: As a commission, you can adopt any of those recommendations and you can also get rid of any of those recommendations, and-you--can make your own recommendations. So, you don't have to, you know, take them as written Youfcan change any_of.them or eliminate them or add to them. RAFFIPIY: I see. REPLOGLE: So, if we-go for a favorable recommendation and one of us puts in another recommendation,to add to that, is`that, is that favorable or unfavorable? HALL: Well, if you're adding recommendations, so like, basically it's a package deal. So you take this package, right, and you're-looking at it, and you're either going to add or subtract from it, but it becomes one package so_, if you're saying you're giving a favorable recommendation on everything that's in here. If you find one of these individual recommendations unfavorable, you should take it out basically. Or; you know what I mean, you can't individually go over it and be like this, you know what I mean? It's either it's in or out and then you go favorable or unfavorable for the entire package. REPLOGLE: But, we can't add something that's not here? HALL: Oh no, you can add. REPLOGLE: Oh, okay. HALL: Yeah, if you want to add more recommendations on here, you're free to do that as well. 45 RAFFIPIY: Mr. Chair, I have two major issues with this or concerns, probably concern. One is, and I kind of erred earlier about your staff, Director, if—because I can see this as a major undertaking for your Department, and if you are, if you have a figure, what the budget is going to look like, additional budget that you'll be asking for, and if there's fees that we have here, if it will be sufficient to cover your expenses. That's, that's the first concern that I have. Maybe we need to really look at the fees. And, then the other concern is the enforcement part of it. I don't know what we're going to call it in the Planning Department. Enforcement division? And, what is their jurisdiction going to be. What the scope of what they can, what they can do. Are they going to become more like a police officer or they're going to just go out there to cite them and that's it? I guess that's house rules that will have to be developed if we're going to adopt that idea to have the Planning Department enforce this, this law. YEE: So, through our rules and through other County Code, it already kind of dictates our enforcement of zoning law. So, if there are violations, this would not be treated generally any different than any other zoning violation that we have. So, they are basically enforcing Code,, and then they would following the rules that we have,set forth Tor that and theiremedies that we have for that. Clearly, our inspectors are not police,right?,:They don't go out even if somebody is doing something that they really shouldn't be-doing right_in front of them. They can't physically go out there and I'm going to h_ave them stop=them doing it, So,justto_:address that, they're not out there to be police officers:',' = In terms of building in=the input froth complaints around, you know, if people aren't following good-neighbor policy, those kinds of things, that's part of the decision that goes on around issuing a nonconforming certificate. = - In terms Of budget and funding, you know if if my Planning Department received funding for every little thing that we should be funded for, my budget would be huge. I wish that we, it was very correlated to the things we're supposed to do. That doesn't exist. However, again, we can't get too far ahead of ourselves. We need to be able to place the law in place in terms of what we want, understand the intent that clearly the Council and the Mayor wants enforcement on this, and I have to hope that through our process and budgeting process, that then I'm assigned the resources tobe able-to do, do our job on that. So, I don't think we can go out there and try to build a budget right now. It isn't going to be too useful at this moment in time except to know that we're expected to enforce what we do, once the ordinance is passed. RAFFIPIY: Okay. Can we inject a provision in here where these fees can be adjusted to make sure that we cover the costs because I'm looking at myself? I don't have any of these businesses and I'm a taxpayer. I pay tax on my property and all that. I don't want to be the one to end up to pay for enforcing all these. And so that's the reason why I brought up these from the beginning 46 because I want this—if they want to operate this kind of operations, let them pay for all their stuff. Not me as a property taxpayer, who I don't have property or operations like this. YEE: Of course when I was buying some time earlier, you were in the restroom and I was explaining how our schedule for fines is set in the, in our rules and procedures. It was clearly the intent to want to increase the fines during Council deliberations at the committee level, and we know they have to increase. Again, trying to imbed what that fine'would be in the ordinance is not the place it would be in rules and procedures, so eventually, when this goes on to Council, if its passed, then it would come back to us to have to revise our rules and procedures, and that's where we would capture, and that's where we would get more into the nitty gritty of what makes sense for us. RAFFIPIY: Thank you, sir. DELA CRUZ: So, that's where we could implement higher fines? YEE: Absolutely. = = REPLOGLE: So, the Council couldn't be for us in-this bill that they're presenting to come up with this I heard people mention a task force or a group,of people that would enforce these new regulations and the fines and fees of this regulation would cover their employment, and as things came into line, say there was less enforcement required, less fees,.then the task force would reduce in size accordingly. Or is it going to end up being dumped in your lap to invent the wheel? = . YEE: Well, our lap, because when:we come back for rules and procedures, you'll be vetting that, and so when we comeback with—let's assume we're going to redo the fine schedule, you'll have a chance to review that :Again,thatwill be the time for—and I'm looking at Amy shaking her head,so I must saying something incorrect. SELF: No,it's the Department rules,-`cause currently right now you have an enforcement section under the County Code; under the=Zoning Code for any kind of zoning violation. So, if there's a violation under whatever sections Bill 108 is amending, the violations would be handled pursuant to the enforcement section of the Code. And, then you have the Department rules, the Planning-Department rules that actually sets out the fines for the violations. So, in other words, if they wanted to=increase the fines for violations for short-term vacation rentals, it would mean that the Planning Department would have to have a public hearing for amending their rules and so it wouldn't-come to the Planning Commission because it's not a Planning Commission rule change. It would be a Planning Department rule change. YEE: Thank you, Amy. Sorry. I knew at some point there was a public hearing on the rule change so I guess that's the point is obviously you would have the ability to comment then on it. So, I don't know if that answers your questions. REPLOGLE: Yeah. Thank you. 47 CLARKSON: Any further discussion? REPLOGLE: Yes. I have this sense that the County Council hasn't I like the bill. I think it's totally needed. But, they haven't thought it completely through in that, like the staffing. Some things like the not grandfathering in where nothing gets grandfathered in, but there's an appeal process or you need to show up yourself and make it right, and if you were already operating and you're doing it in a proper way and neighbors aren't complaining, then eh, lucky luck, here's your permit. But, none of that's in here, and to just grandfather it all in seems too easy— HALL: —You want me to take this one? SELF: Okay— HALL: It's actually not,yeah, go ahead— SELF: Oh, I guess I should introduce myself again. Deputy Corporation Counsel Amy Self. Okay, so a two-prong question you had. The grandfathering is not up to the county. That's under State law. It's under the State under HRS-46-4 spells:out what the-counties can do under zoning, and one of the thing it says is=:that when you change.your, if you amend,your zoning code, you cannot take away a property-right that is legal a;legal use of the property at the time that you amend the code. So, that's why they have to grandfather in because we have nothing in our Code that makes it illegal for you to rent out a single-familydwelling either long-term or short-term. We have no definition for a short-term-vacation rental which is what Bill 108 will The other issue that you,addressed—what was now I've forgotten—. JACKSON:. ,Nonconforming process. . SELF: Oh; the nonconforming, oh,the certificate process. REPLOGLE:I,Well, that it wasn't complete in that they haven't taken into consideration staffing. I know it's eventually going to come back to Mr. Yee's lap, but—. SELF: That's why-they set up the account for enforcement. HALL: I think the other thing to add to is because we have no numbers, the whole point of this is to gather the numbers, to-have the data, `cause, you know, you can't just go to Finance and be like give us another position. You know, there's, you have to vet that position and say, this is how much more work we're going to have. This is how many—we can tell you now how many vacation rentals there are, and then we can ask for positions, but before that, it's really hard to consider since, you know, everybody has different numbers. We have numbers from 2,000 to 5,000, so I think that's pretty much—if I had to guess why the County Council hasn't addressed that in this bill right now. It's because that needs to be addressed after we have numbers and then it goes to Finance through the County Council at that time. They'll be the ones that actually award the positions. 48 REPLOGLE: A concern I have, too, is a timeframe on this. When I hear that down in Keaukaha, there were 11 homes and now six of them are vacation rentals by absentee owners, and it's going to take us what six years to get down to okay, we can hire or we figured out the fees. It seems that some of these issues or like the one lady who testified about six cars right next door, people tapping on her window. She's going to wait that long for some resolution or is that a police issue. CLARKSON: No, she has to wait forever because that was a hosted vacation rental which isn't even part of this. REPLOGLE: They're grandfathered in. HALL: No, they're not addressed in this bill. :- CLARKSON: May I ask why it is, what case lav supports the, your assertion that un-hosted vacation rental businesses in residential areas are legal? SELF: Well, it's a, if it's a single-family dwelling, you-look under the Zoning Code. You look at the zoning, like let's look at the RS zoning. One of the:permitted uses is single-family dwelling. It's not how you use that single-family dwelling 'The use is the single-family dwelling. Right now, you could rent your house, if you're in RS you:can rent your house to whomever. You can rent it long term. You can rent it to a college student for one semester. You can rent it for less than 30 days. There's nothing that in our;Code that does not allow that. As long as they are renting it as a single-family dwelling which means you have to look at the definition of single-family. It means any number of people who are related by blood or up to five unrelated people. So if tlieyare renting it,short-term oranyway, long-term whatever, and they're renting it to more than five unrelated people, that's a violation of the Zoning Code. It's difficult for our zoning inspectors to prove-that, but that's the way the Zoning Code is set up. It's the same thing in Kauai, Maui County, and Honolulu. They never had, they had to do nonconforming as well because it was never against any part of their code as long as they had a single-family dwelling and if that was a permitted use for them whatever zoning district you're referring to, it's perfectly_legal:-Zoning, you have to understand, that zoning has to be applied strictly, or narrowly, sorry, narrowly, because what it essentially does is it takes property rights away. Under the Constitution, you have property rights as a property owner, but what zoning does is it comes and says what you can and can't do with your property, so we've allowed this to happen with no regulations and so now under this HRS 46-4, it says that you cannot—if it's a legal use at the time you amend the Code, you have to allow that use to continue until that use is abandoned, and in our County Code, it says under nonconforming use, if you abandon it for 12 months or longer, you can no longer have it as—you cannot use your property for that use. You have to then comply with the current zoning. 49 CLARKSON: So, the, when a new zoning application comes in, then the expectation is that gradually as the years go by, the nonconforming uses will fade away— SELF: —Right— CLARKSON: —because there will be a few here every year that we'll decide to use it for something else, and then they can never go back. SELF: Right, exactly. That's how you get—we've got nonconforming uses all over the County right now, and eventually, those uses will be abandoned and then n they have to comply with what's in the Zoning Code right now. REPLOGLE: And is that the idea behind the—if you're due on January 31St to renew your license or— - SELF: —Your certificate _ REPLOGLE: —permit and you miss it, you're done:,That's what they were::—in the review today. SELF: Yes. - REPLOGLE: And that's,that's another way to get-rid of'em. - SELF: I think they're given a grace period or something like that. I gotta look and see—they've changed, there needs to-be changes in this thing bit you have to I'll tell you another way to get rid of'emis if—well, trying,to get,rid of them if you want to go there. Let's say for instance someone is using their single-family dwelling. They're renting it out short-term vacation rental right now as defined in Bill 108. If they do not have a building permit for that structure, it's not a legal use of that property because you have to have a legal use in order to have-a.nonconforming legal use. So, they're still going to have to have all their permits that they need,,plumbing, electrical, whatever. If they don't have that when they come in for a nonconforming certificate, they'-re not going to get a certificate `cause they're not, they don't have a legal use asit.is because_0.single-family dwelling means it has all its permits. That's what makes it a single-family,-dwelling,-that it complies with the County Code in every law. REPLOGLE: Thank you. - YEE: On the opposite side, I want to be clear, everything that just—again, this is Corporation Counsel's legal opinion of not, you know; of not grandfathering, you know, things in. Understand that if we try to say no we're not going to allow grandfathering in certain areas or whatever, the argument she just, would make would be used with every case in front of us with every appeal and as other counties have found out, it's taking an enormous amount of time for them to deal with all the appeals that they're facing. So you can disagree with her legal opinion, 50 but understand it's a strong legal opinion, and we would be tied up for years trying to deal with that, with all the numerous folks that we wouldn't grandfather in. AGUINALDO: I have a question for Mr. Chair and Mr. Director. For the short-term vacation rentals, okay, I hear taxes, you know, whatever taxes, what about their property tax? Are they a different type of tax that they're paying or they're just paying regular residential tax? That's what none of'em, they only talk about taxes, but they did not specify about their property tax. Is that something being enforced or we need to look at? YEE: Malia, go ahead. HALL: That's actually a question for Real Property Tax:because basically, I would guess to say that yeah they're probably just taxed at the residential rate at this time because that's what they are, right? They're just residential homes, and they'-re being used as rentals. But, there has been talk I believe that, you know, if this bill does go through, now we carn,identify them, and then the tax, that gives Real Property Tax an opportunity to=look at those and also create a, you know, a different classification basically. But, again, that's all just speculation, that`we would have to ask Real Property Tax really what they could door what they would like to do-.with it when the bill or if the bill is adopted. CLARKSON: I have a question for Amy: .So, going back-to-the zoning, the zoning laws. So, if a use that was legal, you have a fully permitted structure, so it's legal there. It's being rented out as a short-term rental which is legal. But, say they didn't pay all the TAT tax that State law requires of short-term rentals,then they would have been operating illegally, so they wouldn't have any right to ask=for a nonconforming use because their.operation wouldn't have been legal in the first place. SELF: Well,they could ask, but I would be advising that no, it's not a legal nonconforming use at that point because they hadn't_been complying with-County and State laws. CLARKSON: Okay, thank you. = SELF: Same if they haven't been, if they're delinquent on their County property tax. It's not legal. You have to pay your taxes. CLARKSON: But, as I understand it there's sections of Bill 108 with deal with proving that you were nonconforming. Did that take into account an audit of prior tax payments? It just, as I remember, it was kind of loose. Show some evidence that you had a short-term vacation rental business, but not show in evidence that you complied strictly with all the laws that were applicable all the time. JACKSON: Joe, so, the bill currently does say that the applicant needs to provide evidence that the use occurred prior to adoption of the bill which can include various tax documents. But, then, for, actually under the renewal section of the nonconforming certificate, it says that the director can deny the renewal if they are not meeting current law or if they haven't paid their 51 County taxes, fees, fines, and penalties assessed. It doesn't specifically reference the TAT or GET tax in that section, though. CLARKSON: Well, my suggestion would be that it should not only reference it there but in the issuance of the initial nonconfonning use certificate, or whatever it's called, that—I mean if, I don't know, I mean to me, it kind of looks like spot zoning that you are allowing resort hotel use in residential communities, and I kind of wonder why the County is trying to deal with it after- the-fact rather than actually changing the zoning to Resort hotel where needed. But, anyway, assuming that State and Federal law and the Constitution requires prior legal use to be honored, I think that this bill should make it extremely—an extremely detailed inspection of the legality of the prior use so that any illegality can be used as a reason for denying the nonconforming use certificate. So, if we're going to make a motion for approval of:this; I mean, we're advisory only anyway, but I think that the section on evidence for the initial nonconforming use should be toughened up considerably. To include all taxes that should have been paid—GET, property, TAT, Federal income, and that any failure to pay taxes meant that you were not operating:legally. The Department gets to be a tax accountant, examiner; too. YEE: Exactly, and I think that was some;of the rub, early on there was more detail over what documents could be shown, some of—and I think that's why specifically it tries to state to County things that I can look at becausethat's readily available as much as I wish that the State would share information with me directly: HALL: Or the applicant share. ' YEE: Or the applicant,but it becomes a little more difficult. HALL: It's the la-w.- YEE: aw.-YEE: So, yes, so as Malia is mentioning, it's what the applicant is willing to share with us. Trying for me to get information directly from the State can't happen, so I see what you're trying to do. I think that was certainly, the Council was trying to craft something that would try to meet that, and this is was kind of where-we landed on the compromise. Yeah, I think it's certainly well within the Commission's ability to forward a recommendation to tighten it up as much as they deem legally abletodo so: CLARKSON: I think we're going to take a lunch break here. We're going to continue our deliberations. We've tried to give you a sample of our thinking. You are welcome to come back in an hour and see more of it, if you want. But, we're going to recess for one hour at this time and reconvene actually at 2 p.m. Chair Clarkson called a recess at 12:54 p.m., and the meeting was reconvened at 2:01 p.m. CLARKSON: It's now 2 o'clock. The Windward Planning Commission has reconvened, and we will continue our discussion of any motion for action on the Ordinance No. 108, proposed 52 Ordinance No. 108. Donn Dela Cruz had to leave. Do we still—one, two we still have a quorum. So, the discussion when we left for lunch was—and I think, I don't know whether we can do it now, but my proposal was to beef up the examination of the applications for certificate of non- conforming use and that was, where was it, nonconforming use certificate. That was Section 25-4 . HALL: On Page 4? CLARKSON: Page 4. I would like to amend the—I don't know, how do I do it? There was a Planning Director's Recommendation. Maija, can you put that-up? The recommendation for the section of the ordinance, proposed ordinance that had to do'with prior use. Short-term vacation rental nonconfonning use certificate. JACKSON: Was that a recommendation? Is that the section? CLARKSON: I thought there maybe not. Maybe_there was_no recommendation regarding that section. It's Section 25-4-1. HALL: No, most of the recommendations address registration, not the certificate process, but you can add a recommendation. CLARKSON: So, the proposed language says, "The.=applicant seeking a short-term vacation rental nonconforming use certificate shall have the burden of_proof in establishing that the property was in use prior to the effective date of this ordinance. I don't know whether you can insert the word "was" legally used as a short-term prior to the effective date, short-term vacation rental prior to_the_effective date of this ordinance.' Evidence of such use prior to the effective date of this ordinance shall include`tax documents for the relevant time period. So, we would change may to shall. Including excise tax filings, transient accommodations tax filings and Federal and-State of Hawaii income-tax returns. AGUINALDO:- Is property tax.included? CLARKSON: Huh? _ HALL: Oh, and property tax.. - CLARKSON: And, yeah, right, other reliable—yeah, and also property tax. Or maybe an examination of past property tax filings for conformance with actual use will be made. Property tax filings are freely available to you. Aren't they freely available to the Department? Property tax filings? AGUINALDO: Property tax and classification HATA-FINLEY: Gilbert—. 53 AGUINALDO: Yeah? Oh [grabbing mic], property tax and classification yeah? Of its use? CLARKSON: So, it's my understanding that there should be no way that a non-hosted short- term vacation rental could ever have a homeowners' exemption, for example. JACKSON: That would seem correct because they're not living on the property. It's not their primary residence. CLARKSON: The—if that's the case then I would think a preliminary check should be made for every one of them to see if their claims for property tax are correct, and if they aren't, according to what Corp. Counsel is saying, then that certificate could be:denied based on the illegality or presumed illegality of their previous use. JACKSON: Chair Clarkson, can I point you to another section? Maybe we can use some of the wording from there. So, if you go down to the"bottom of page 4, it has:,the criteria for denying renewal of the nonconforming use certificate. Would you like to move som e of those like (A) and maybe (B) up to, up to the front of that section,-and basically like you seeahe last sentence of (B) where it says, "Based on the evidence submitted, the director shall determinwhether to issue a short-term vacation rental nonconforming use certificate..." Maybe we can somehow break that out into its own section and sayyouu have to establish the prior use by submitting these tax documents, but then break out that last sentence into its oWinsection and basically saying something like issuance of nonconforming:certificate:and then say that you have to submit proof that you paid your taxes,-all the taxes, right? Including„County. And, that the building is, has been built with proper building permits. = HALL: I may have a better suggestion. JACKSON: Okay. - HALL: What if under"Denial" you just add the word "Issuance" and then"and Renewal" so that it covers both so that you can deny"both with these criteria, and if you guys want to add to that, then you can, but basically this one section will cover all denials of both the initial certificate being issued and then the renewal. JACKSON: That's wayeasier to add two words. HALL: And, then, yeah, if you guys want to add to the actual "Denial" section and add more details to it, then you can feel free to do that. JACKSON: So, the heading would be "Denial/Issuance and Renewal of Nonconforming Use Certificate," right? Does that kind of capture what you're going for, Joe? CLARKSON: Then, on another issue going back toward enforcement, the "family" of no more than five unrelated people, so if a—this would be in a hosted, I know it's not here, but I'm just 54 trying to understand. If somebody is living in their house, if they are a single person, they can have no more than four other people rent rooms from them. SELF (from staff table): Unrelated. CLARKSON: Unrelated. SELF (from staff table): Up to five unrelated. CLARKSON: Okay, so that means if a family of unrelated to who? HALL: To each other. SELF (from staff table): To the person who AGUINALDO: Owns JACKSON: Unrelated to each other. CLARKSON: So, if there's one person JACKSON: —So, you can— CLARKSON: an—CLARKSON: —and then`a'family of ten allrelated to each_other come, they can, then there's only— ; .. SELF (from staff table): Dependenton the number-of people who are blood HATA-FINLEY -Amy—. - SELF: There's the limit on-the number of people who are related to each other. So, it can be a family of whatever number,but it has, if they're not related to each other, there can only be up to five. CLARKSON: Well, so_explain that to me. So— SELF: —I didn't make it-up. CLARKSON: No, no, but I mean so if the owner is living in the place, and a family of eight comes, that family is all related to each other, how many unrelated people are living in the house? SELF: If a family of eight are all related and then one other person? CLARKSON: Yes, how many unrelated people is that? 55 SELF: Well, yeah— REPLOGLE: —One— SELF: —he's unrelated to any of the family members, right? CLARKSON: So, there's only— SELF: [to Ms. Jackson] Can you pull up the definition on the—can you read it to him? This is, it's defined in the Zoning Code. That's—she's going to read it to you. JACKSON: So, the Zoning Code says that a single-family dwelling, it defines single'-family dwelling unit, and then defines family as family means,an individual or two or more persons related by blood, state-sanctioned adoption, foster parentage, guardianship, or marriage or a group of not more than five unrelated persons, excluding servants, Occupying a dwelling unit. REPLOGLE: People have servants? Wow! - CLARKSON: A group of not more than five unrelated persons :° JACKSON: Yes. It says or a group of not More than five unrelated persons. CLARKSON: Okay, yeah, I still don't understand that, but I guess-. So, if you had a group of six related persons and another group of four related persons and another group of eight related persons, now you're u p to 19 people, and you don't have, you still don't have a group of five unrelated people. SELF: Isn't the word "or" in there? There's the word"or." So, it's related people of up to five unrelated. _ - CLARKSON: Okay. - HALL: So, you can [inaudibleI,_and a family of ten. CLARKSON: Okay: So, I'm just:thinking back to the house in Waikoloa Village that has five or six rooms, well say as long as the number of—so you only get to count one person from each group as being a member of the five unrelated, so you would have to have five different families of however many members before you would have five unrelated people? SELF: No, it's "a family" so all the family members are related. So, a single-family dwelling means that it's a house that where five or where a family, a related family, is living CLARKSON: —Okay, I understand that SELF: —or up to five unrelated people are living—that's what makes a single-family dwelling. 56 CLARKSON: Five unrelated people are living there. SELF: Or five unrelated people. Right. CLARKSON: So, the, okay. REPLOGLE: So, if I'm in the house with my wife and three kids and my sister is there with her husband and five kids, we're all related? SELF: Yes. REPLOGLE: Okay. CLARKSON: But, if I'm there, and [Laughter] CLARKSON: No— SELF: —We could do this all day-- CLARKSON: ,—No, no, I just, well, SELF: —I'm sorry— AGUINALDO: Good discussion.: CLARKSON: I just don't understand how the Planning Department would ever determine whether there were five unrelated people in a house.- I SELF: And, they have—that's the problem. They've had complaints like this before, and the inspector goes out, and they ask—I don't know how, do you remember how they—a lot of times it is impossibleto figure out. If,you—you used to do permits. ARAI: I mean there are so many. -sorry, Daryn Arai, Deputy Director there are so many ways you can slice this, right? But, bear in mind, you know, bear in mind that when the Code was crafted, it was trying to make,sure that we don't overly regulate or restrict the family. You know, something like vacation rentals is relatively new. The Code has been in place since the sixties. So, you know how you have hanai families? All those things come up from time to time, and we want to make sure that the Code doesn't infringe on what people here locally may constitute a nuclear family, even if it is hanai. Right? And, that's why some times the way its written doesn't align very well, but what we tend to do is, the Code doesn't say that the family when you start counting heads once it's beyond the primary homeowner. It doesn't say that. It just says no more—either you're related or no more than five unrelated. So, we tend to look at the biggest number, and if they are all related, we see if there is outlying individuals that exceeds five. That's about the only way you can do it. So, if you have a homeowner, the primary 57 homeowner, and she is a, there's a family of five, then we will look, if someone moves in that's unrelated to that, the primary homeowner, we would make sure that it doesn't exceed the total number of five unrelated to— CLARKSON: —So, I'm so, if there is a family, an obviously related family of however many living in there, and another family moves in of say four people, husband, wife, and two kids, now you have eight people say husband, wife, and two kids, husband wife, and two kids. How many are unrelated? ARAI: Four, because there are four people who are not, that are not directly related by blood or marriage for example to— CLARKSON: —To the original group. _ ARAI: Right. So, to, and remember, you know, because we're trying to define it,— CLARKSON: —Okay— ARAI: —we will always try to interpret it most generously. Did I ay it correctly? Most generously meaning— _ _ CLARKSON: —In a hosted vacation rental situation, if there is a couple that's living there, and they have a family of six come to stay, is that more than five unrelated people? ARAI: No, because you see, that's what I'm saying.. We try to interpret it most generously because again we want=to.make sure that the total number doesn't exceed five unrelated, right? So, if you have, if the primary homeowners consist of only two people, and they allow a family of ten to move in— CLARKSON: —Right,for a nightL-- ARAI: Or for whenever, then what we would do is what we'll probably look at the family of ten and then making sure that the unrelated doesn't exceed five which is the two, so they'll be in compliance. Again,we will look at the numbers to provide the most generous interpretation of the Code— CLARKSON: —Okay=-. ARAI: —because the last thing we want to do is start, you know, infringing on what people determine to be a nuclear family, and there's too many nuances when it comes to families. Like I keep mentioning hanai. CLARKSON: Well, then, in the case of the testifier from Waikoloa Village who had a room, that was renting out six rooms, I don't see how there's any way that that, if all of them were rented, well, if they were rented to separate parties, that would have to be a violation. 58 ARAI: It depends on how they are being rented. You know, because this draft bill I think talks about five rooms max being rented. But, you have to also— CLARKSON: —This is for un-host—I'm.actually side tracking onto the hosted. SELF: [Inaudible] CLARKSON: No, it isn't, but I was going to bring that up next. SELF: Hosted or not hosted, it still has to comply with the definition of single-family dwelling, which is what we just talked about. So, it doesn't matter if it's hosted or non-hosted. CLARKSON: It still can't have, no matter how it can— SELF: Because the use of the property is a single-family dwelling. That's the permitted use for the property is single-family dwelling. CLARKSON: Well, it seems to me that that if you'.re hosted Or un-hosted;if you're using a single-family as a short-term vacation:rental, the presumption`should be that it's-Very likely that unrelated people are going to be living in--the house at the same time. And, well, I mean, how many times was short-term vacation rentals, especially multiple—with multiple rooms, not whole house, but multiple rooms for rent;.are all of the people:and the multiple rooms going to be in the same family? Very rarely. SELF: Well, it's no different than right now Like_I said, they've got, they've received complaints before about,you know,:about so many people in a house that's being rented short teem, and the inspectors go out, and they ask questions, but you know, they ask for their IDs that kind of stuff; but it is, it's very difficultto_enforce: It-has been—it is now difficult to enforce, and it's not going to'be any easier once Bill 108, if Bill 108 passes, I don't see it being any easier to enforce. CLARKSON: ,I agree. It doesn't look very easy to enforce, so I just, I don't know. I see the, heard the testimony. I haven't paid much attention to this since I've never either had a short- term vacation rental or used one. It was always something that was, you know, out there. I've heard of them before:Read stories about the giant homes on Oahu with 20 bedrooms, but SELF: —I think the main problem is that I've been at every Council meeting where this bill has been heard, and it seems like the biggest complaints are the noise, but that's not a zoning issue. That's an issue for the police to deal with because that is, you know, that's a different— CLARKSON: —I, I, I want to beg to differ there. There's not only the immediate noise and parking which we've had issues here before with having their tenants park on the street. There's also the issue of the reduction of rental housing for long-term renters. I mean, when you have a situation in Keaukaha where you go from zero percentage vacation rentals to 50 or 60 percent, all of those houses are taken away from the market for people who might want to rent a house for their family near where they work in Hilo. I mean, who was it that said we're behind the, we're 59 behind schedule here. If somethingdoesn'tget done, you know, there's apparently so much PP Y money to be made that half the island could be short-tenn vacation rentals before we know it. SELF: But, if you look at the reason is because this has never been regulated. This bill seeks to do that. CLARKSON: I understand that. SELF: That's what this bill does. CLARKSON: Yes. SELF: And, if—even if they get a nonconforming use certificate, if they abandon that use for 12 months or more which is in the Zoning Code currently,then they, whoever, they can't go back to that use. They have to comply with the Code as it reads. Once they've abandoned that use, they have to go back, and they have to comply with the Zoning Code which=would mean they'd have to comply. They wouldn't be able to get a nonconfonning use anymore,because they will have abandoned that use. = CLARKSON: All these—all these issues would seem to apply to hosted short-term vacation rentals, too. Was there, why is it that was not part of this bill? Do we know what was the reason for that? YEE: I would agree with Stephanie Donoho's testimony that she felt like there were political reasons that the Council—there-Were probably two major.areas-they felt like they couldn't address right now which was, one was hosted rentals and area that we know could use more vacation rentals, let's say around Volcano, Puna,that may not allow enough right now. It was very intentional that they felt like_that was,step two down the road, which is certainly part of the Background/Recommendation that we made, was that there needs to be a step two down the road. CLARKSON: Okay, thank you. Does anybody else on the Commission—do any other Commissioners have suggested revisions either to the draft ordinance or to the recommendations by the Department? AGUINALDO: Yeah,_I have one that Commissioner Dela Cruz indicated about the quota. I know we referenced Oahu as the one percent, you know, as a reference. Are we going to have, you know, something to discuss about that? That he previously discussed earlier? CLARKSON: I may be wrong, but from all that the Corporation Counsel has said, there's no way to retroactively create a quota for nonconforming vacation rentals. Presumably, there could be a quota for zoning areas where it's permitted. I mean, can, can the Department say to all the people who come in for a nonconforming use certificate "oh, I'm sorry, our quota is 200 and the last one just came in yesterday." 60 SELF: Not for the nonconforming. It would be for new ones coming in, so I guess what Maija was saying Honolulu did was they took a look at each area and if it already had a certain number of nonconforming uses in there, then they had to limit the number of new ones that could be established. You can make limits going forward, but you can't take the property right away from the person who already has, is making a legal use of their property. So, anytime you change the Zoning Code, you amend the Code, you can't all of a sudden take away somebody's right to use their property the way they are using it currently if they're using it legally within today's Code. So, then, that's why you had to give them the nonconforming so that in the future should they abandon that use, then they have to come into confonnance with the Code that's in existence at that time. CLARKSON: But, under this proposed ordinance,there would-be no new nonconforming at all. Isn't that correct? SELF: Right,,because they had to be, they have-to be using their property jegally for that purpose before 108 passes, and then once 108 passes, if it does, then they can-come in and apply for a nonconforming certificate. - - CLARKSON: What, this—I'll not interrupt; this one question, though. The national legislative action, they actually set a date before they,enact-the.law. When they start to discuss a new law, they set the retroactive date. -Does the County Council do the same thing? Has that date been set? Or, they just wait until they pass the law and that becomes the date? To pass the ordinance. SELF: It's the date, it'- the effective date. If you read—well, there's a section in the Zoning Code that has certain language in there that indicates that—I wish I had it with me—it's, what does it say. Anyway, they were going to-put a date in, but the date will be the date that the bill becomes effective. It has to do with the way our Code is set up. CLARKSON: So, are you satisfied, Commissioner, that there won't be any new nonconforming after this ordinance has passed? SELF: Right. -_ - CLARKSON: There will only be old ones and that will be capped at the number that existed at the time the ordinance passes:and gradually, that number of nonconforming will go down because no new can be added and very gradually old ones will be, go out of that use. AGUINALDO: I just think that we still have to identify who is in compliant and is in the old, `cause we don't know. We actually don't know who is in compliant. SELF: Yeah, that will be determined— AGUINALDO: Yeah, so- 61 SELF: by the Planning Department once they come in. AGUINALDO: That would have to be determined yet because we only saying for new. We even don't know that the old ones, you know, they could be running for years, but are they in compliant to what is being enforced? That's, that's something that we don't even know. Maybe there's only a handful is doing it, and the rest are not in compliant. So, I think that needs to be, you know, further discussed, I guess. REPLOGLE: Is there a way that you could say somehow in this bill that the nonconforming must come forward and get registered by a certain date. We don't know who they are, right? But, they are out there, and they gotta come forward. Failure to come forward and register will result, when you are found out, in complete revocation of your right to have a bed and breakfast—I mean a short-term vacation rental. So you have something in there, a mechanism that says, oh we have this rental, we better go and get in compliance so we can keep doing it. If the money is involved in it like you say, they'll come-forward. If they are illegal, then they'll hide, and all it's going to take is somebody to come in and say, they are running a noncompliant operation, and boom! Now, the Planning Department, it's not even an investigation. They just go in and put an end to it. ARAI: You know a lot of what you are recommending is_actually built into the bill already. The whole premise behind this bill is to basically say we don't know what's out there. You have 180 days from the adoption of this bill to register with the Planning Department. If you fail to register within 180 days, in so many ways, you vacated"any opportunity to become legal if you're not situated within the properly zoned, or Resort zoned areas. So, it's a pretty hard stop, and then once you're declared—say, if you're in an unpermitted area and you're already existing, you can come in for a nonconforming use certificate, right? That is the whole reason of why you have to annually renew, because we want to make sure that you're adhering to all of the guidelines and the standards expected of a vacation rental, which is like the "good neighbor" policy and all of those things, paying your taxes. So, every year, we will have to go back and revalidate that you're staying within the confines of the bill or the law. So, onceyou-stray outside of"it, then the Director has that opportunity to no longer issue you the nonconforming use certificate which means-that you have to sunset your operations. It's pretty draconian because it hits hard. You miss that date even by a single day, you're out, you know, so—. REPLOGLE: Thank you. " ARAI: But, I should also clarify, and thanks to Maija for pointing this out, that, you know, it raises the question that if you are a single-family dwelling on a lot, agricultural lot that was pre- 1976, it may afford you the opportunity to apply for a Special Permit to allow a vacation rental, because again, the whole purpose is vacation if you're a farm dwelling, then you should always stay a farm dwelling. That's why you're in an ag area, right? But, if you're in an older subdivision, pre-76, single-family dwellings were allowed back then. So, you should have the right to at least to apply for a Special Permit, and if you meet the criteria, then the Commission 62 may exercise the ability to grant approval. So, there may—and there's a lot of pre-76 subdivisions out there. Paradise Park, Ainaloa—. CLARKSON: Why would they be able to apply for a Special Pennit even though they were not making use, that use of their property before the ordinance was passed? ARAI: Because the pre-76 lot doesn't hold residential use to fann dwellings only. SELF: Okay, there was a time before—okay, pre-1976, dwellings were called single-family dwellings under State law even on ag land. Okay, so then, they:decided to get serious about saving ag land because there was, you know, the sugar mills were closing, all this ag land was being sold off, and so they wanted to preserve ag. So, then the State passed a big they amended 205 and determined that they wanted ag land to be used as ag land and so a single- family dwelling had to be a farm dwelling, which means that it, as,a farm dwelling, it had to be tied to a farming activity or ag activity on ag land, that's under Stateag district boundary. So, the fact that the way we're interpreting the statute is under 205-4.5, it says, it gives an exception for lots that were created prior to them passing that bill, which Was prior to 1976. Construction of houses on those lots that were created prior to 1976 are single-family dwellings. So, it doesn't have the label of a farm.dwelling which Means it's tied to ag. CLARKSON: No, I understand that. But,,even.though it's a single-family dwelling, and the County Council creates an ordinance saying that short-term vacation rentals are not allowed in ag zoned areas, and why would a,why wouldn't a single-family residence even in a prior, in a lot created prior to 1976 be allowed to come in and say I wanfto be a short-term vacation rental now even though I never have been. I don't understand that. Daryn was seeming to imply that if, if ARAI: No, no, no,-yeah, I guess I was thinking about those you were talking about nonconforming, right? CLARKSON: Right. ARAI: And you were basically saying there will be no new nonconforming, and I guess I meant to clarify that there could be I wouldn't use the word nonconforming there could be new vacation rentals who apply after the bill if it is on a pre-76 lot, which allowed for single-family residential use. They couldat least apply for a Special Permit which is to allow a use that is not permitted under, within the agricultural district. I mean, the whole purpose of this bill is to create a classification of vacation rentals,right? And, that is normally not permitted on agriculturally designated land, so you can apply for a Special Permit, but the question I've had, and we've kind of tried to elevate the discussion, is that the Special Permit has a whole bunch of criteria and, you know, you've gone through a whole bunch of them, right? Consistency with General Plan, consistency with CDP's, consistency with Zoning Code. All of those things. You have the right to apply under State law, but the question is can you approve a Special Permit knowing that the County has created a specific Code section that says we want to relegate 63 vacation rentals only to Resort-designated areas. And, that is an unclear thing and is something that I think needs to be addressed with if someoneshould apply for a Special Permit. CLARKSON: Okay, I agree. Then the other thing that you mentioned, Daryn, was that there were going to be given a 180 days, six months after the passage of this ordinance, if it is passed, to apply for a nonconforming use certificate. Why so long? I mean, you could—you can't say one day or two days. That would be arbitrary and capricious. But, why not 60 days? Or 30 days? Or 60 or 90? Why make it that much easier for nonconforming use applicants to do so? ARAI: I don't recall exactly why a 180 days was picked out, but I think it's from a practicality standpoint. If some of the numbers that we heard from the audience today-2,600 units out there—possibly even up to five thousand as Mr. Stefan has indicated, that's a lot for a department that currently is not geared up for this type,of— CLARKSON: —Well, their—their issuance of a.certificate may not be accomplished immediately, but certainly, they could apply and be put in the que. ARAI: Sure. And, you're correct in the sense that it just says to register with the Department within a 180 days. It's not like we have to issue the confirmation letter within that same time period. But, again, we're talking about a voluminous number. Some of the Commissioners have expressed concerns about how do we get the word out. It's going to take a lot of effort to make sure people are.well infonned and give them reasonable opportunity to try and register with the Department. Because, keep in mind, that what we're trying to do is first find out what is out there. So you don't want to just give a small window of opportunity. You really want to find out what's out there. CLARKSON: Well, it seems to be that the intent of the bill is to give the least opportunity as possible so that these nonconforming uses are wiped out so to speak as quickly as possible. I mean, you're'going to make them show all these tax records. You're going to make them apply annually. You're going to-kill their nonconforming use certificate if they don't apply within the annual requirement. Why bend over backwards to make it easy for them to get the certificate in the first place?_ ARAI: Well, you know, again, it's a difficult area to be, you know, it's a difficult area to begin with and keeping in mind that for decades, we have basically been saying we do not regulate as long as you don't exceed five unrelated, you have the opportunity to do so, and now you're creating new legislation that basically prohibits this. I think providing a reasonable window for them to try and register and be recognized by the County, I think, is a reasonable thing to do. RAFFIPIY: Mr. Chair, I think if the numbers that we've been hearing during the testimony is correct, 2,000 or 11,000 or 5,000, I think 180 days probably be better for, kind of help our Department, Planning Department to address all of this. They may get inundated in 60 days. They wouldn't be able to do anything but issue Certificates. CLARKSON: No, I think there's a misunderstanding that this section says the owner of any short-term vacation rental which operated outside of a permitted zoning district prior to the 64 effective date of this ordinance shall submit an application. It doesn't say that they will be given a certificate. They will submit an application for a nonconforming use certificate to the Director no later than, and I think it should be 60 days, not a 180 days. So, I mean, if they can't get it together to submit an application and fill out a form in two months, why give them six months? So, anyway, that's my suggestion. YEE: I would have to agree with Thomas that some of the compromise was the impact on staff and although they are making just an application, it comes with plenty of questions with each applicant, you know, what they have to submit, the information they need. It's not something that staff would just be there and there's an inbox that they just throw their application in, and if it was, maybe we could handle it under 60 days. But, I don't think we have any impression that's the case that it is likely like every applicant will have questions, and we have to make staff available to help answer those questions possibly. So, 60 days, it certainly would not be ideal by any means from a Planning staffing issue. Is a 180 days generous? yes, I can't recall the date, the number of days changed over time. But, again, the Commission can certainly recommend a different number of days. AGUINALDO: Mr. Chair, I have a question. You know, wedon't know who iscompliant, noncompliant. Is there a way we can regulate no matter what if they're compliant, noncompliant come in? Register? So, you can know: And, the fee, that $250, if you increase it, even $500, $500 times five thousand, 2.5 million dollars. You know, because right now, we're expecting the public to police each other regardless if it was something being discussed as commissioners. That's one way.you can corral everybody. Even though they comply, there's only a One-time fee. Then, we have public record. Somehow, we will know who is short-tern vacation rentals `cause right now we don't know. But, the fee, if you increase the fee, I mean just irimagine-even if at 2,000, that's a lot of money. Then, we can utilize that money within the County maybe. Just an idea. ARAI: I appreciate the discussion, Commissioner. Maybe kind of to set, set a good framework, a lot of what we do from an enforcement standpoint is complaint driven, and the reason so is because it's actually spelled out in the rules of practices and procedure. There are times when we've been, you know, informed,-especially by Corporation Counsel, that as long as we don't intentionally do like—how do I say this only selected area or selected enforcement, that we have a fiduciary responsibility that if we become aware of a Code violation, even though in the absence of an actual complaint; we're somewhat obligated to follow up, right? So, that being said, knowing that a lot of what we do or what you do today should the bill be adopted, we still have to develop rules of practices and procedure, and that's going to define all the steps, all the little things we have to do in order to implement the requirements of this particular bill, and one big component is the enforcement side. So, you know, it's not something we've spoken to the Director about, but we think based on past practices and what has been articulated to us in the past, I think we should maybe look at our rules and just eliminate that complaint driven process and do it where we do make, we can make concerted efforts independently within the Department to go and try to ensure that the provisions of this particular 65 bill is in force, which means being able to go to like Airbnb websites and look. It's reasonable to do. toprovide that reassurance toyou so it's not like, you know, we don't have So, I Just wantpo mechanisms in place. We could build it into the process. But, I wanted to add to that. I think that's the intent of this bill, is to have people come HALL: Bu , p p in and register, and then those who don't, you know, hopefully, we can, you know, somebody will complain or at least somebody will mention that there's one in their neighborhood. But, if you're talking about you want everyone to register, like-even hosted, then that's a whole different thing. That's a whole other recommendation. So, doyou want is that what you're saying like you wanted even hosted? AGUINALDO: No. HALL: you just Okay. But, ust want to make sureeverybodyregistered `cause that's what they're actually recommending, with they added the word,their recommending to Council to add the word "all" so that all unhosted vacation rentals come:in and at least register whether they are in a permitted area or not. And, that way,the.Planning Department will have a comprehensive list of the people who are using their dwellings as vacation rentals, CLARKSON: One of the things I worry-about on the.180 days is that that would allow someone a chance to establish a new vacation rental after the_.enactment of the ordinance. Well, how are you going to prove it?:-Then, a 180 days later; they come in and show you all their—especially if the 180 days overlaps the end of a tax year. Oh, here are all m 'taxes I paid last year for my vacation rental business and . ARAI: Well,again, it's from the date of the adoption of the bill, so if they show us that they were established, they would have to, like for example, when did they actually activate their GET license,for example.- CLARKSON:-Okay. There you go. ARAI: You know, I know there-are all these little workarounds that could probably happen. It depends on us, on the information they provide if they feel that we need to dig deeper in order to qualify, then, you know,we'll have to do so. But, again, it doesn't mean that—the whole purpose of annual registration or annual renewal is for us that each year we take a look at things, and there may be information that surfaces that we were not aware of in previous years. That will give us that opportunity, to determine whether or not we should continue to issue these nonconforming certificates. And, I should also note for the record, and I'm sorry, I'm going to have to leave for a meeting at 3 o'clock very shortly, but my recollection of why a distinction was made between hosted versus non-hosted is because when you're dealing with hosted, a lot of times, you're dealing with people who, whose home is their primary residence, and they're doing it as supplemental 66 income. This is a bill, and you can see from the testimony and the over one year it's taken to craft this bill, it's very, very difficult just dealing with the non-hosted, which are homes in which is not the primary residence of the landowner. So, I think the Council simply wanted to chew, I mean take bite-sized I mean it's a big bite granted, but just a bite-sized piece instead of trying to deal with a much more complicated issue of dealing with hosted rentals. So, that's my recollection of why they made the distinction. CLARKSON: I have one more question for Amy, and it relates to the grandfathering in. You say you can't not grandfather in people who are operating legally within a new zoning ordinance, but does that mean that the nonconforming certificate holders have grandfathered in the regulations that were present when they started their business and that they cannot be held to the good neighbor policy because that would be a new condition on the operation of their short-term vacation rental? SELF: No, because they still get their use, right? It''s the use that they have to look at. That's what zoning is all about. CLARKSON: Okay. SELF: It's how, what is the use of the property. So, they still have their nonconforming use, but if they, when they come in to get a certificate, they have to comply with the terms of the certificate. CLARKSON: Okay, so as long as it doesn't prevent their use completely, it can be a condition SELF: —Yes, it can be conditioned— CLARKSON: —with new conditions. - SELF: Yes. CLARKSON: Okay, thank you._ Any other suggestions for amendments to the ordinance or to the Director's recommendations? So far, we only have one I think that it's the one that I proposed to add to the language for the evidence required for the issuance of a nonconforming use certificate. RAFFIPIY: Mr. Chair, so that makes 17 recommendations? Recommendation No. 17? CLARKSON: Go ahead. Huh? Go ahead. RAFFIPIY: The recommendation that you made. That would be Recommendation No. 17 in addition to the Director's recommendation, right? 67 CLARKSON: I lost track. Were there only 16 original ones? AGUINALDO: Mm-hmm. CLARKSON: Yes, it would. RAFFIPIY: Thank you, Chair. CLARKSON: And, I'll just reiterate that it's the part of the, it affects Section 25-4-1, "Evidence of such use prior to the effective date of this ordinance shall include tax documents" instead of "may include." For the relevant time period, including: State of Hawai`i general excise tax filings; transient accommodations tax filings; and Federal,arid State income tax filings, Federal and State income tax returns, and property tax records including—now I don't know how you want to phrase it—examination of the use conforming to the taxable_status. In other words, if they're claiming homeowner's exemption, and it's in a non-hosted single-family residence, then that would not be legal and their application would be denied. JACKSON: Are you proposing to put that in the prior use section where they are trying to establish that the use has existed? CLARKSON: Correct. - • JACKSON: So, you're not recommending Malia's suggestion— _ CLARKSON: —Well, she had both and the renewal. She wanted to say denial and—what, I forget what it was, that she wanted to combine--.: HALL: So,basically,'what you're saying in your section is under prior use, so but what you're talking about is you want to give the Director the power to do these things when he first issues the certificate, and so,my suggestion was because this denial asks, basically says the renewal may be defied but would also say like the issuance may be denied by the Director if he verifies the following. "[(A)] The applicant has violated provisions of this section or other pertinent laws; [(B)] The owner is delinquent in payment of County taxes, fees, fines, or penalties..." which we could, you know, add in GET or TAT to that if you wanted to. "[(C)] The owner or reachable person has not been reachable"but that is usually for renewal. And, we can also use police reports or verified neighbor complaints so basically when they come in for their nonconforming use, those things could all be looked at by the Director, and they could be denied their initial certificate if there has been a lot of police reports and/or, you know, they are delinquent in the payment of their taxes and/or they are notfollowingthe law, the pertinent laws. CLARKSON: No that's, that's an excellent suggestion. I, I would like to see Section B and Section F kind of combined. AGUINALDO: Mr. Chair, I'd like to make a recommendation as well. For Section 25-4-, there's nothing on it, short-term vacation rental number (b)(2)? When it states- 68 CLARKSON: —What page? AGUINALDO: This is on page 2 on the County of Hawaii in the back on the ordinance. As far as increasing the fee from two-fifty. I know we're being very conservative, you know, on the two-fifty, one-time fee that, you know, I would like to, you know, quickly discuss as far as that $250 fee. It's a one-time fee, you know. RAFFIPIY: I believe the two-fifty is the renewal fee and $500 is the one-time fee. JACKSON: Is that what you're suggesting? Because the way it is now, the initial registration fee is two-fifty. AGUINALDO: Right. JACKSON: And the annual renewal fee is also two-fifty for the nonconforming use certificates. RAFFIPIY: And there's the Director's recommendation to increase the one-time fee to five hundred, right? JACKSON: I don't think that the Director recommended—that was for the fines, the daily fines, yeah? RAFFIPIY: Okay, I got"it. . AGUINALDO: I just think that even though that is that, on a yearly basis, I mean like for example like for myself in my profession, I pay more than that, you know, yearly, and these guys are running an operation business because it's not considered as a residential rental. It's a short- term, the word "vacation"rental. So, to me, it's, it's still worth it. I mean it's generating revenue for, you know,these people. I just think that yeah, you can do a one-time fee of that $500 then; you know, you can go for the two-fifty after that, because then at least it gives us, the County, the opportunity to do their due diligence as well to make sure that they are all in compliant. It's like you, yeah, I just think that that is, you know, should be increased. RAFFIPIY: I concur. - REPLOGLE: I concur. -- JACKSON: So, Recommendation 18? Increase the initial registration fee to $500 and keep the annual renewal at two-fifty, correct? CLARKSON: No, and just let me clarify. That's for nonconforming, but for conforming, where they're in a zoning district where the use is permitted, right now, there's only a one-time fee of two-fifty. That's it forever. AGUINALDO: I would think that regardless, they should all be the same. g 69 CLARKSON: Okay. AGUINALDO: A one-time fee of$500. CLARKSON: And an annual fee of two-fifty? AGUINALDO: Yeah. CLARKSON: I'll vote for that, too. YEE: I want to confirm. Gilbert, the renewal, you weren't saying for the conforming or are you suggesting renewals for conforming areas, too? = AGUINALDO: That is correct. YEE: Okay. CLARKSON: One of the things to concur with Gilbert's suggestion is that it looks like fees and fines are going to be the only source of funding for enforcement, so let's make sure or recommend to the County that they make sure that the busiriesses that are being enforced pay the cost of enforcement. REPLOGLE: Yeah, that it doesn't go to the dog pound, AGUINALDO: Mm-hrmm. CLARKSON: In fact, if it were up to me,.I would=add a nineteen that the registration fees and renewal fees and fines-be reserved for the enforcement of this ordinance. REPLOGLE: Yes. CLARKSON: But, I don't know if I'll get away with that. REPLOGLE: You will. It's a recommendation. AGUINALDO: Yeah. I. JACKSON: While Amy is looking at the bill, real quick here, can we back up to Commissioner Aguinaldo's recommendation? Here, Amy it's here. So, Commissioner, you suggested an annual renewal fee of two-fifty for even conforming short-term vacation rentals so the issue with that is that there's no process or mechanism in the bill for the Department to ask for annual renewals for all short-term vacation rentals so we would have to add a lot more language to the bill to do that. 70 YEE: And, I should add the reason why we, the bill was written the way it was, part of the input was if you are a permitted use,having to come in and apply for something you are permitted to do was a, was kind of hard to want to go down that road with that. A one-time fee was a compromise. At one point, there wasn't even a fee for it. They added the one-time fee to it. Just giving you background. CLARKSON: I'm still okay with it. I—remember, this is advisory to the Council. The Council can do what they want,but at least they're asking us for our opinion. Hey, this is our opinion. JACKSON: So, along with that, you would want some type of annual renewal of the registration for the conforming the STVRs in the conforming areas, too. Okay. CLARKSON: I mean, this section about the conforming, I mean shall register with the Director and pay a one-time fee of$500 prior to the use of such rental and a$250 renewal fee annually thereafter, I mean, it's not a whole lot of language to add. JACKSON: Easy. CLARKSON: Easy peasy. - SELF: The other thing you were talking'about, you were asking about it, all the money going to a special fund to be used by the Planning Department rather than the dog-catcher. So, that's in, that's on page 5, 25-4-3. So, all of the, all'the fees collected with one-time registration fees for short-term vacation rentals andnonconforming—you'll have to change that if you want it to be an annual fee. CLARKSON: Where are we talking about? SELF: This is page, the bottom of page 5, Section 25-4-3. AGUINALDO: Section . CLARKSON: Oh, yes. SELF: Little "c." AGUINALDO: Oh, "c?" Okay, got it. CLARKSON: Oh, that's the enforcement. AGUINALDO: Mm-hmm. SELF: So, that's everything. All the money goes into to that account for purposes of enforcement. But, now that you're asking them to have an annual fee for all of'em for the conforming and nonconforming? This says that it is to be funded by fees collected in connection with one-time registration fees for short-term vacation rentals pursuant to Section 25-4 (b), 71 nonconforming use certificate renewal application fees pursuant to section 25-4-1 and fines, so anybody want to add a word in there that says—. CLARKSON: No, I'd like to subtract a bunch of words. SELF: Oh, okay. CLARKSON: This account shall be funded by all fees and fines collected under this ordinance. SELF: Okay, that's excellent. Could you repeat it? All fees and fines collected pursuant to this— CLARKSON: —Ordinance— - SELF: ordinance. JACKSON: Okay. SELF: Well, I wouldn't put ordinance. I would put-. JACKSON: Bill? No? SELF: No, because one its codified—. HALL: Section. JACKSON. Pursuant to this section. HALL: Yeah.- SELF: eah.-SELF: But they're not—they're not changing it in that section. CLARKSON. 'Section 25. HALL: Or we, or we're leave this whole section, yeah? CLARKSON. Oh, this section." HALL: Yeah, yeah,for the fines that we make. CLARKSON: Yeah. HALL: Yeah, 25-4 basically. CLARKSON: Do we have a motion for action? 72 REPLOGLE: I'm sorry? HALL: Can we do—Maija, do you need any more clarification on—? `Cause I think we might want to flush out Joe's recommendation a little bit more because I'm still `cause I think he still wants to add words to the prior use portion, not just my suggestion. So, I guess, maybe just go that route real quick. JACKSON: Okay. HALL: In the prior use, would this be what you're thinking? If in the prior use section, we just take out the word "may" and make it "shall" so that would make them have to submit the tax documents? Would that, and then basically, there's that and then included in the denial section, there's all the wording about basically why it could be denied. Would that satisfy you— CLARKSON: —Yes— HALL: —Or do you still want to add CLARKSON: No, no, I would like to combine the import of(b) and (f) in seeking a short term's nonconforming use certificate,a vacation rental nonconforming use certificate, so that the parts where it can be denied on renewal, also apply to granting initial use, granting the initial certificate. So, basically, it would—I don't know what the best way to do it, is to put in granting the certificate, you know, you could put it all in one section either granting, renewing, or denying. All have the same standards. JACKSON: I think Malia had suggested that under the denial section under (f)(1), changing that wording to say, "The initial-issuance and renewal of a nonconforming use certificate shall be denied if the director finds that the short-term vacation rental use has been abandoned ." Oh, I see. And, then in (2).again, the initial issuance, I'm sorry, use that language on (2), so "The initial issuance and renewal of a nonconforming use certificate may be denied if the director verifies any of the following" and then adding to (b), adding the GET and TAT tax. So, if, "The owner is delinquent in payment of County taxes, GET, TAT fees, fines, or penalties assessed in relation to the short-term vacation rental." Good? CLARKSON: Actually, let's, I think it would be simpler to leave it the way it is but just also add the language in, in the denial section, "Police reports or verified neighbor complaints and the delinquency in payment of County taxes" and that stuff would all be assessed already in the issuance of the certificate. It's already, all the tax issues are mentioned already there. The only thing that needs to change really in this is just add the same language that's in (D), "Police reports or verified neighbor complaints" up into section, subsection (b), Prior Use. In other words, they not only have to establish that they had the nonconforming rental, that they did everything legally, and that they hadn't had any police reports or neighbor complaints prior to giving them the certificate of nonconforming use. I mean, I think it would be kind of 73 cumbersome to tryand combine the initiallyissuance with the annual renewal or denial in one paragraph. AGUINALDO: And, also when you indicated about taxes, does that include, when someone pays their taxes, they can say yeah, I paid my tax, here's my check. They should verify with their, they call it a State Tax Clearance. So, when you go to the State Department of Taxation, they will, you know, notify you that, eh, his tax, he paid his taxes versus just, you know, showing oh, I paid my taxes. CLARKSON: Well, the, Gilbert, the proposed ordinance says general excise tax filings, transient accommodations tax filings. These are the returns, not just the check that said oh yeah. AGUINALDO: Right, but the—it's filing, when you're filing for your tax, it's the, they will give you a print out of your tax that you paid your taxes,a tax clearance. CLARKSON: Okay. AGUINALDO: It's a record. JACKSON: So, are we all clear on Joe's change, yeah? Related to prior use. CLARKSON: I think so. I'd just like to be, basically add to the prior use that instead of may, they shall include all of these things and also property tax records and also the one thing from the denial, police reports or verified neighbor complaints. So, if they've been operating, but they've been getting a lot of complaints about their operation, even if they've been paying their taxes, they can still be denied, and not only have to have had previously operated legally but without complaint. Now, I don't know if Ainy's going to advise the Council that that's legal or not but I think we should give them a piece of our mind. AGUINALDO: Yeah, do 'em right. JACKSON: And, so, Joe, you do not want to move that (f)(2)(A) up to Prior Use section. So, you don't want any verification that the structure that the short-term vacation rental is in has met like Building Code requirementsand has their permits before issuing that initial certificate? CLARKSON: I don't see where-that's in (f)(2)(A). JACKSON: It's on page 4, (f)(2)(A). It says renewal may be denied if the Director verifies any of the following. The applicant has violated provisions of this section or other pertinent laws like for example the Building Code. CLARKSON: But that's not in there. JACKSON: That's other pertinent laws. CLARKSON: Oh, okay. Sure, add that in. 74 JACKSON: Okay. So, you want (A) and (B), I'm sorry(A) and (D) added to the Prior Use section. CLARKSON: Correct, because obviously the reachable person is irrelevant because this is past use, tax payments delinquency is going to already be covered in the tax filings submitted, and so, yes, (A) and (D) should be added to added to Prior Use along with property tax. JACKSON: Okay. CLARKSON: We're going to lose a quorum in 13 minutes, so I would like to get an action for motion on this. I don't know what we'll do about our next item on the agenda. REPLOGLE: So you want a favorable— - • CLARKSON: Anything. Somebody please make a motion. HALL: You have to use the microphone. REPLOGLE: I move for a favorable recommendation [be] forwarded to the County Council on Bill No. 108, Draft 4 based on the Planning Director's recommendation as well as recommendations suggested by the Windward Planning Commission, suggested revisions shall, which shall be adopted. AGUINALDO: I second. CLARKSON: Any further discussion? Maija, would you call the vote, please? JACKSON: Yes. Commissioner Replogle? - REPLOGLE: Aye. JACKSON: Commissioner Aguinaldo? AGUINALDO: Aye. JACKSON: Commissioner Raffipiy? RAFFIPIY: Aye. JACKSON: And Chair Clarkson. CLARKSON: Aye. JACKSON: Okay, the motion carries four, zero. 75 YEE: Quickly, I just want to thank the Commissioners on this and Maija who put in an immense amount of time. The Council had like over a year to mull these issues over through many meetings, and you just did it within hours so I appreciate your focus on that. Thank you. The discussion ended at 3:18 p.m. Respectfully submitted, Sarah Y:-Hata-Finley, Secretary Windward Planning Commission 76 Bill 108, Draft 4 related to Short - Term Vacation Rentals Initiated by the County Council Presented to Windward Planning Commission September 6, 2018 Hearing The County Council has referred Bill 108, Draft 4 to the Planning Director and the Windward and Leeward Planning Commissions for comment and recommendations. • The bill adds a new section to the Zoning Code and amends other sections related to Short-Term Vacation Rentals. • The purpose of this bill is to manage the impacts of these short-term vacation rentals by: 1) defining where this use will be allowed; 2) establishing provisions and standards to regulate this use; and 3) providing an avenue for an existing use deemed to be improper by this ordinance, to apply for a nonconforming use certificate that would allow them to continue to operate in a non-permitted district. WHAT IS A SHORT-TERM VACATION RENTAL? • Bill 108, Draft 4 does not seek to regulate all vacation rentals that are rented on a short-term basis. • Bill 108 defines 'short-term vacation rentals' as a dwelling unit of which the owner or operator does not reside on the building site, which has no more than five (5) bedrooms for rent on the building site, and is rented for a period of thirty consecutive days or less. The zoning code defines a 'building site' as a parcel of land or lot. WHAT IS A SHORT-TERM VACATION RENTAL? co This bill does not cover the rental of a dwelling unit where an operator or owner lives on the property, such as: • Dwellings or other buildings where six (6) of more rooms are rented. These are considered hotels, inns or lodges in the zoning code, even if they occur within a dwelling. • Dwellings where no more than 5 bedrooms are rented for a period of 180 consecutive days (about 6 months) or less, when the owner or an operator resides on the building site. These are considered 'hosted' short-term rentals and can include bed and breakfast establishments, or renting rooms of a dwelling on a short-term basis to not more than five (5) unrelated people, which is defined as a "family" in the zoning code. A bed and breakfast establishment allows up to 10 guests and the service of continental breakfast meals. • Dwellings rented on a long-term basis, which is typically 6 months or longer. WHERE ARE SHORT-TERM VACATION RENTALS PERMITTED? • The bill identifies the following zoning districts and areas where existing and new STVR's can operate as a permitted use: • Resort-Hotel (V) zoning district • General Commercial (CG) zoning district • Downtown Hilo Commercial District (CDH) zoning district • Village Commercial (CV) zoning district, with a Use Permit • All zoning districts within areas designated by the County General Plan as Resort or Resort Node, except that a Use Permit is required in the Single- Family Residential (RS) zoning district. • Outside of these areas, new STVR's are not permitted but existing STVR's may continue to operate if the Planning Director issues a nonconforming use certificate. HOW ARE EXISTING SHORT-TERM VACATION RENTALS PERMITTED? • Based on discussions with County Council staff, the intent of Bill 108, Draft 4 was to have all existing and new STVR's register with the Planning Department within 180 days (6 months) of adoption of the ordinance. In addition to registration, those STVR's outside of permitted zoning districts will also need to apply for a nonconforming use certificate. • However, the current bill does not require owners of existing STVR's in the CV zoning district or RS district in General Plan Resort and Resort Node areas to register. Owners of existing STVR's outside of permitted zoning districts are also not required to register. • The 'registration' section needs to be reformatted to have all existing STVR's register (see Recommendation #7). HOW ARE NEW SHORT-TERM VACATION RENTALS PERMITTED? The bill requires registration of all new STVR's established in zoning districts where the use is permissible, but the bill does not require registration for new STVR's that may be established outside of permissible zoning districts, such as in the County Agricultural (A) zoning district on land in the State Land Use Agricultural district with a Special Permit. REGISTRATION PROCESS O The registration process includes submitting a form and S250 filing fee to the Planning Department. • The applicant must all submit: • A site plan showing the location of the rooms for rent and requisite parking pursuant to section 25-4-51 of the zoning code, which requires one parking space for each rented bedroom in addition to one space for the dwelling unit if rooms are rented individually, or two parking spaces if the dwelling unit is rented as a whole. • Verification that State of Hawai'i general excise tax and transient accommodations tax licenses are in effect. • Verification that a letter has been set to all surrounding owners and lessees within 300 feet of the property, notifying them about the details of the STVR operations, such as, the number of units being rented, maximum number of guests permitted, number and location of parking spaces, and instructions of how to submit complaints to the Department about rental operations. REGISTRATION PROCESS • The bill requires that owners of STVR's notify the Director of ownership changes or when a STVR establishment ceases to operate for any reason, but these provisions are under the "Registration of all short- term vacation rentals" section, so it is not clear if they apply to STVR's permitted via a nonconforming use certificate. • Any STVR that is not registered within the required deadlines is considered unpermitted and subject to penalties, until the STVR becomesY ro erlregistered and compliant with the requirements of p pp q the bill. NONCONFORMING USE CERTIFICATE PROCESS 3 Owners of existing STVR's located outside of a permitted zoning district must submit an application for a nonconforming use certificate to the Director within 180 days of the effective date of the ordinance, should this bill become law. The owner must provide evidence to prove that the STVR was in operation prior to the effective date of the ordinance. Evidence can include tax documents such as State of Hawai'i general excise tax filings, transient accommodations tax filings, and federal and state income tax returns. Based on the evidence submitted, the Director shall determine whether to issue a nonconforming use certificate. Current nonconforming use certificates must be displayed on the premises so that it is clearly visible to an inspector. NONCONFORMING USE CERTIFICATE PROCESS • The bill indicates that a nonconforming use certificate may be issued for STVR's on land in the state land use Agricultural District, provided the lot existed before June 4, 1976. The reason for this date is that all dwellings on lots created after June 4, 1976 are considered by State law to be 'farm dwellings', which are to be used to house farm workers rather than vacationers. NONCONFORMING USE CERTIFICATE PROCESS Nonconforming use certificates must be renewed annually on or before the expiration date indicated on the certificate. A $250 filing fee is required with the renewal request. Renewal of the certificate may be denied by the Director for the following reasons: 1) the applicant has violated provisions of the bill or other pertinent laws, 2) the owner is delinquent in payment of County taxes, fees, fines, or penalties assessed in relation to operation of the STVR, 3) the owner or reachable person has not been reachable, and 4) if there have been police reports or verified neighbor complaints of noise or other disturbance. The Director must deny renewal of a certificate if the use has been abandoned for any reason for a continuous period of twelve calendar months. NONCONFORMING USE CERTIFICATE PROCESS The Director must provide the decision to deny renewal of a certificate in writing and the owner may appeal the decision to the County Board of Appeals within 30 days of receipt of the decision. LOSS OF NONCONFROMING STVR's DUE TO EMERGENCY • The bill also includes a provision that requires the Director to assess the effect of the permanent loss of nonconforming STVR's when a declared emergency occurs, such as lava inundation. The Director can initiate legislative and administrative opportunities to restore losses in STVR capacity within the affected district. STANDARDS FOR OPERATION OF A SHORT-TERM VACATION RENTAL • The bill requires that all STVR's have an owner or 'reachable' person that resides within the County. This person must be reachable by guests, neighbors and the County agencies on a 24 hour/ 7 days a week basis. The bill defines 'reachable' as being able torespond via telephone to a request for his/her presence within 1 hour of receiving the request and being physically present at the STVR within 3 hours of receiving a call from a guest, neighbor, or County agency. The owner must notify the Department of any changes to the contact information for the 'reachable' person. STANDARDS FOR OPERATION OF A SHORT-TERM VACATION RENTAL • All STVR's must abide by a good neighbor policy, which requires the owner or reachable person to make sure the activities taking place in the STVR conform to the character of the surrounding neighborhood. The policy must be displayed on the premises and included in the rental agreement. The policy includes: quiet hours from 9:00 p.m. to 8:00 a.m.; ensuring that sounds outside of quiet hours do not exceed what is normal for a residential area, prohibiting machines or devices that generate loud sounds, and ensuring that guests park onsite in designated parking areas. STANDARDS FOR OPERATION OF A SHORT-TERM VACATION RENTAL 'v Other standards that all STVR's must abide by include: • Displaying on the back of the door of the sleeping quarters, a copy of the registration or nonconforming use certificate and the reachable person's name and phone number. • Including the registration number or nonconforming use certificate number on all forms of advertising of the STVR. • Complying with the Sign Code and parking requirements for STVR's. COMPLAINTS AND ENFORCEMENT • The bill requires the Director to receive and track complaints regarding STVR's, and provide information about STVR rules, policies and procedures to property owners, managers, neighbors, and the general public. The Director is also responsible for adopting rules of practice and procedure to implement the provisions of the bill. • To enforce the provisions of this bill, the inspectors will be able to rely on any advertising offering the property as a short-term vacation rental as evidence that a STVR is operating on the property. The burden of proof will be on the owner to establish that the STVR is being operated legally or the property is not being used as a STVR. COMPLAINTS AND ENFORCEMENT The bill proposes to establish a short-term vacation rental enforcement account administered by the Planning Director, for the purpose of enforcing this proposed short-term vacation rental law. The account will be funded by fees collected for registration of STVR's, fees collected for renewal of nonconforming use certificates, and fines collected from enforcement actions. Planning Director's Recommendation The Planning Director recommends that the Planning Commissions send a favorable recommendation of Bill No. 108, Draft 4 to the County Council with the following suggested revisions: Recommendation # 1 Change the title of the bill and references of 'short-term vacation rental' to 'un-hosted short-term vacation rental'. Reason: The title and references are confusing because unless you are familiar with the definition, the title implies the bill is related to both 'hosted' and 'un-hosted' short-term vacation rentals. Recommendation # 2 Clarify the STVR definition to specifically state how the Internal Revenue Code defines the short-term use of an owner's primary residence. Reason: Department enforcement staff and the public will not know what the Internal Revenue Code does and does not allow unless it is clearly stated in the definition. Recommendation #3 Add to the STVR definition that dwellings where more than five bedrooms are rented are defined in the zoning code as inns, lodges, or hotels. Reason: To make it easier for the public and staff to understand how visitor accommodations are defined without having to dig through the Zoning Code. Recommendation # 4 In Section 25-4-XX (a)(1)(B), remove the requirement for a Use Permit to establish a new STVR in the CV zoning district. Reason: Most of the commercially-zoned areas within the small rural towns around the island, such as Honokaa, Hawi, Waimea, Pahoa, Kainaliu, and Honomu, consist of Village Commercial (CV) zoning. Land uses within these CV-zoned areas consist of transient accommodations such as hotels, inns, and B&B's along with many service-oriented commercial businesses like restaurants, art galleries, and general retail establishments, which rely on customers that are both residents and tourists in order to be successful. Use Permits are permits granted by the Planning Commission after a public hearing to ensure there is adequate existinginfrastructure to support the proposed use and to ensure the proposed use wil not cause a substantial negative impact on p p These rural villages typically have adequate the surrounding community. g yp y q infrastructure to support a range of commercial uses and STVR's would pose no different adverse impact than other commercial transient accommodations such as hotels, inns and B&B's. Recommendation # 5 Change Section 25-4-XX (a)(1)(C) as follows: (C) [General Plan Resort ares and Resort Node, except that RS districts in the General Plan Resort areas and Resort Nodc shall require a use permit.] All zoning districts, except Open, situated in the General Plan Resort and Resort Node areas, provided that a use permit is obtained in the RS zoning district. Reason: The General Plan LUPAG Map is meant to broadly show where various zoning districts should be located within the County. It is not meant to identify specific permitted land uses within the zoning districts. That was never the intent of the LUPAG Map. The suggested revised language would have the same intent as Bill 108, Draft 4 but pwould clearly reference the zoningdistricts rather than the General Plan designation. This would allow for STVR's to be listed in each 'Permitted Use' section of the zoningcode for each zoningdistrict in the Resort and Resort Node areas. For example, ection 25-5-32(a), (Permitted Uses for the RM district) of the ZoningCode, p Resort andRert Node should state, "Short-term vacation rentals, in areas designated eso so by the General Plan". Recommendation 4 IA Add the following to Section 25-4-XX(a): "(3) Special Permits in the State land use agricultural district shall not be issued to permit short- term vacation rentals in farm dwellings since State law (HRS 205-4.5(a)(4)) requires farm dwellings be used to house farm workers rather than vacationers." Reason: State law allows the Planning Commissions to issue a Special Permit for any land use that is reasonable and unusual and is consistent with the State land use law related to lands within the state land use (SLU) Agricultural district, even if the land use is not specifically listed in the zoning code as a permitted use for that zoning district. Farm dwellings are all dwellings situated on lots created after June 4, 1976, and additional farm dwellings on lots created beforeJune 4, 1976 in the SLU district. AgriculturalThey are defined as a sinsle-family dwelling located on and used in connection with a farm or where agricultural activity provides income to the family occupyingthe dwelling. Since a STVR, as defined in the bill, is 'un-hosted there woud be no one onsite that would work on the farm or gain income from working on the farm. Typically, visitors that come to work on farms for an agricultural tourism experience, are staying in a 'hosted; vacation rental, rather than a STVR. Recommendation # 7 Reformat the proposed 'Registration' subsection to require that all existing STVR's submit a registration form to the Department within 180 days of the effective date of the ordinance. Bill 108, Draft 4 does not require registration for existing STVR's in the CV zoning district, RS district in General Plan Resort and Resort Node areas, and areas outside the permitted zoning districts that will continue to operate with a nonconforming use certificate. Reason: If existing STVR's in these excluded areas are not required to register, then the Department will not have the opportunity to implement the other provisions in the 'Registration' subsection such as verifying general excise tax and transient accommodations tax licenses are in effect and adequate parking is provided onsite. _____________ Recommendation #8 In Section 25-4-XX (b)(4), clarify that owners of STVR's shall notify the director when the STVR permanently ceases to operate. Reason: This clarity is needed so that STVR owner's only notify the Director when the STVR permanently ceases. Recommendation # 9 Under the 'Standards' section, consider removing or clarify the purpose of section (2)(C) which states "sound generated by any machine or device that is audible at a distance of fifty feet from the machine or device producing the sound is prohibited". Reason: It is not clear what type of devices are prohibited. For example, it seems that equipment used to maintain an STVR like lawn mowers and leaf blowers would be prohibited. The good neighbor policy previous to this one, which requires that sound audible beyond the property boundaries during non-quiet hours not be more excessive than what is normal for a residential area, seems to sufficiently address noises generated by guests during non-quiet hours, while still allowing for lawn mowers and the like to be used to maintain the property. Recommendation # 10 In Section 25-4-XX(d), add a sentence instructing the Director to establish and maintain a list of all STVR's that have registered or received a nonconforming use certificate. Reason: In addition to a tracking STVR complaints, the Department should be responsible for keeping an up-to-date list of active, permitted STVR's throughout the County that the general public and other regulatory agencies, like the Building Division or the Fire Department, can refer to. Recommendation # 1 1 Change section 25-4-XX(d)(2) to state, "The director shall adopt rules, in accordance with chapter 91, Hawai'i Revised Statute, for the purpose of implementing the sections of Chapter 25 related to short-term vacation rentals." Reason: The proposed language in the bill seems to only apply to creating rules for implementing the 'Complaints and Public Information' subsection rather than all sections of zoning code related to STVR's. Recommendation # 12 Reword Section 25-4-XX.1(c) to state, "Agricultural Lands. In the State land use agricultural district, a short-term vacation rental nonconforming use certificate may only be issued for single-family dwellings on lots created before June 4, 1976." Reason: This is to clarify that nonconforming use certificates will not be issued for STVR's on lots created after June 4, 1976 pursuant to State law, which requires that farm dwellings be used only to house farm workers. Recommencation # 13 Add the following to Section 25-4-XX.1(f)(2): "(E) The renewal request and renewal fee was not received on or before the expiration date indicated on the certificate." Reason: This will clarify that renewal requests received after the expiration date will not be renewed. Recommendation # 14 To ensure that STVR's meet basic health and safety standards, consider adding requirements that the STVR comply with fire, building and sanitation codes. For example, to address the building code, a requirement in the 'Registration' and 'Nonconforming Use Certificate' sections could be added stating that a STVR may only be established within a dwelling for which the Department of Public Building Division has issued and finalized building, electrical and plumbing permits [to be occupied as an R 1 residential occupancy]. Reason: Both the Fire and Building Departments have provided memos indicating that health and safety standards should be considered in this bill. The bill should also consider the impact on staffing resources for the Fire and Building Departments, since it is likely that inspectors from these departments will be called out more frequently to inspect STVR's for code compliance. Recommendation # 13 Create increased fines for violation of this bill. Reason: The Maui and Kauai County planning departments have informed the Director that because STVR's are a very profitable business, the fines need to be high enough to discourage violation of the STVR law. Current zoning code violation fines start at S100 per day plus a one-time civil fine of S500. HousekeepingRecommendation # 16 Add "short-term vacation rentals" to Article 7, Division 2, Section 25-7- 22(a), to include short-term vacation rentals as a permitted use in the CDH, Downtown Hilo Commercial District. Reason: This is needed to conform to Section 2 of Bill 108, Draft 4, which permits short-term vacation rentals in the CDH district.