2018-09-20 Leeward Exh B (Bill 108 re Short-term Vacation Rentals)

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vacation rentals, these regulations apply to only those. That would be less confusing for the public. It would be very clear. Recommendation No. 2 is to clarify the short-term vacation rental definition to specifically state how the Internal Revenue Code defines the shot-term use of an owner’s primary residence. And if you look at the bill on Page 6, that’s where you have your definition of “short-term vacation rental,” and the last sentence in that 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.” So the Director is recommending better defining, or explaining, what the Internal Revenue Code does or does not allow so that it’s easier for the public and for Department enforcement staff to understand. The third recommendation is to add to the short-term vacation rental definition that dwellings where more than five bedrooms are rented are defined in the Zoning Code as inns, lodges or hotels. And, again, that’s just to make it easier for the public and staff to understand what this bill does or does not cover. So this recommendation is a little bit more substantial, recommending removing the requirement for a Use Permit to establish a new short-term vacation rental in the Village Commercial zoning district. Most of the commercially-zoned areas within the small rural towns around the island, such as Honoka‘a, Hawi, Waimea, Pāhoa, Kainaliu and Honomū, they consist of just Village Commercial zoning; there is no other Commercial zoning in those little villages. So land uses within these areas consist of other transient accommodations, such as hotels, inns and B&Bs, along with a lot of service-oriented commercial businesses like restaurants, art galleries and general retail establishments. These businesses rely on customers that are both residents and tourists in order to be successful. So as you know the Use Permit process, the permits are granted by the Planning Commission after a public hearing, there is a filing fee, it takes at least three months to get the application to the Commission, so it’s a little bit longer process. And the Director is seeing that it may be better just to rather than go through a Use Permit process, allow short-term vacation rentals in CV zoning because the use is very similar to the other uses that, the other transient uses that are already there. There’s, the Use Permit process typically looks at, is there adequate infrastructure, are there going to be negative impacts on the surrounding neighborhood or community, and since these rural villages are already developed with other commercial uses, you don’t usually see those impacts and there is already the adequate infrastructure to service those uses. UNGER: A question. JACKSON: Yes. UNGER: If we are looking at narrowing down the permitted areas for these short-term vacation rentals, and commercial properties is one of them, I’m, I’m really surprised that there should be a Use Permit for any property zoned commercial, any, any property zoned commercial, I would think, would be able to do it legally without a Use Permit. What is, what is the thought process behind that? I think we are going to be inundated with, the Planning Department is going to be inundated with paperwork and applications, the Planning Commissions are going to be inundated 12 EXHIBIT B