2024-04-02 PL-CCI-2024-000003 Bill 121 Jonathan Helton Testimony

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The study did not look at Hawaii Island specifically, but it did find that STRs added $6 billion to the state's economy and sustained 46,000 jobs.2 The HTA study also surveyed the people statewide who own short-term rentals and found that "70% of residents who indicated that they make their living unit available for home and vacation rentals report that they do so to either make incremental income or meet housing gaps (40% and 30%, respectively)." Further: "Responses in 2019 track with reasons and proportions provided by respondents in 2016, where 60% of respondents indicated that they make their living unit available for home and vacation rentals to subsidize housing costs. The increased proportion can be partly explained by the ongoing rise in housing costs in Hawaii:i3 This indicates that many existing STR hosts — who maybe rent out a room or a second unit on their property — use their STR income to afford Hawaii's high cost of housing. These existing hosted STRs also offer everyday folks the opportunity to participate in Hawaii's tourism economy and build wealth for their families. Because no economic impact study has been conducted for STRs in Hawaii County, we would encourage the Commission to request the County Council conduct such a review before moving this legislation forward. We are also concerned about the steep fines to be charged to those who violate the new law, as a $10,000 per day fine could quickly add up to an unpayable amount — and even result in the loss of property itself. Not only would such a fine be excessively harsh, but it could be unconstitutional. Both the state and federal constitutions bar excessive fines, and the U.S. Supreme Court's decision in Timbs v. Indiana'establishes that the federal excessive fines clause applies to state and municipal actions as well. Recent cases, such as Tyler v. Hennepin County,5 indicate that courts are increasingly prepared to strike down aggressive state action that impairs individual property rights. Thus, we suggest that the penalties associated with noncompliance be reconsidered and restructured. Should this bill move forward, we would urge the Commission to remove the language from the sections governing owner-hosted and operator-hosted STRs that dictate where the owners or operators can sleep. z Ibid, p.4. a"Hawaii's Home and Vacation Rental Market: Impact and Outlook,' prepared for the Hawaii Tourism Authority by Rus Hotels& Hospitality Group,April 20,2020,p. 16. 4 586 U.S._(2019). 139 S. Ct. 682. 5 598 U.S. 631(2023). 1050 Bishop St.#508 Honolulu,HI 96813 808-864-1776 info@grassrootinstitute.org 2