PD Background & Recommendation Report (PL-CCI-2024-000004) Bill 122

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Kohala ofist RESORT ASSOCIATION March 26, 2024 Dennis Lin, Chair Windward Planning Commission Hawaii County Aupum Center 101 Pauahi Street, Suite 3 Hilo,Hawaii 96720 Support for and Comments on Bills 121, 122 and 123 Dear Chair Lin and Members of the Windward Planning Commission, The Kohala Coast Resort Association(KCRA)is in support of Bills 121, 122 and 123,updating our short-term vacation rental laws, and incentivizing homeowners to build more accessory dwelling units for local residents to use. We are grateful to Councilmembers Heather Kimball and Ashley Kierkiewicz, Planning Director Zendo Kern and Deputy Planning Director Jeff Darrow, for stewarding this process during the last year-and-a-half. There are several reasons we support these bills: 1) They will create a more equitable playing field in terms of taxation and regulations by addressing all types of transient accommodations rentals (TAR)—owner-hosted, operator-hosted and un-hosted, 2) They will help protect and hopefully create new affordable workforce and residential housing across the island with the clarification on accessory dwelling units, 3) They will aid Civil Defense in communicating with our visitors during natural disasters and emergencies, 4) They will provide an oversight framework to make sure that accommodations being offered are safe, secure, and follow our required building codes and county laws, 5) They will help us avoid bait-and-switch scams where one property is advertised,but another property, or none at all is delivered, 6) They will help us obtain more accurate visitor counts and distribution models island-wide, 7) They will make sure the hosting platforms are transparent and accountable for reporting to the government, and 8) They will provide more comprehensive data, so that economic forecasting can be more accurate, and planning for key infrastructure improvements can be considered. There are a few comments we would like to make on specific sections of Bill 121: 1) Section 25-4-16.7 Rental Registration Process, Sub-section (a), Number(6) a notarized affidavit in a format determined by the director, and submitted under penalty of perjury, that the transient accommodation meets health, safety and code requirements. As has been the lawful standard, any time there is a change in use of any structure or property,the owner is required to go through the existing planning,building and engineering processes. The County of Hawaii is then responsible for verifying that the owner is meeting health, safety and code requirements before the new use is allowed. Allowing the owner to simply provide an affidavit stating that they have met those requirements,without the necessary follow-up, skirts the checks and balances the public requires. This puts visitors' and residents' health, safety and welfare in danger. We suggest that this section be amended so that the County of Hawaii requires, at minimum an inspection of all TARS to verify that they are structurally sound,have adequate means of access and egress, and comply with all other code requirements, before they are issued a TAR license. While later sections of Bill 121 assess penalties and violations if sections of the owner's affidavit are found to be false,we believe the information contained in the affidavit should be verified at the outset. 2) Section 25-4-16.7 Rental Registration Process, Sub-section (a), Number(8) copies of a current State of Hawaii general excise tax license. Many testifiers on these bills during the January meeting of the Planning Committee of the Hawaii County Council stated that they "pay all their taxes."We would suggest that in addition to the State of Hawaii general excise tax license,that the County of Hawaii also require the registrant to submit their transient accommodations tax license,if the unit has been operating as a TAR prior to this bill's passage.