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Home My WebLink AboutCOM 0675.003 2022-2024 JNty 1_ t;, q Phone: (808)961-8828 HEATHER L.KIMBALL �P COUNCIL CHAIR '\� � Fax: (808)961-8912 Council District 1 (North Hilo, *; � i �+��:*; Email:Heather.Kimball(ihawaiicountv.Qov Hamakua, and portion of Waimea) HAWAII COUNTY COUNCIL 25 Aupuni Street,Ste. 1402. Hilo,Hawai'i 96720 DA 1'E: January 22, 2024 TO: Members of the Hawai`i County Council FROM: Heather Kimball, Council Chair 41./ Council District 1 SUBJECT: Supporting Documentation Relating to Bill No. 121 Attached for purposes of discussion in relation to Bill No. 121, please find a 26-page slide deck entitled "Package Overview: Proposed Transient Accommodations Rental Bill 121". Thank you. HK:dbk Att. Comm. No J•� Ref.To: 2 1192111 Hawai`i County is an Equal Opportunity Provider and Employekef. Date 4;1 . 2 3 2024. Package Overview PROPOSED „, TRANSIENT ._ ...... • ACCOMMODATIONS ‘, \ : . ' - RENTA L .. ... . . .. BILL 121 , ,4( --11-fr---4 January 23 , 2024 lir Fir 1 10 Purpose of the TAR Package • Fulfilling the promise to revisit during deliberations on Bill 108 from 2018. Develop a policy that works for both county and community. • Ensure that all TARs are operating legally, safely and are following the same set of standards. • Preserve the character of our residential and agricultural areas. • Address the ongoing housing crisis in our county. Transient Accommodation Proposed Ordinance Rentals • Updates Reports and Studies • Hawaii Appleseed Report: Hawaii Vacation Rentals Impact on Housing and Hawaii's Economy (March 2018) • UHERO Blog: Short-term Vacation Rentals and Housing costs in Hawaii (April 2023) • UHERO: The Hawaii Housing Factbook (June 2023) Transient Accommodation x Proposed Ordinance Rentals Updates UHERO Anal tic UHEROAna! is 0 c U 0 A O V140064101. Q is Q n. Percentage of Housing Units Listed as a SIR 0-1 1-2 67, 2-5 5-10 I 10-50 50-100 leafier Tiles a Esn—Eso DeLorme HAVTEQ Quantity of Housing Transient Accommodation „ Proposed Ordinance Rentals Updates Finding Balance • Speculation and Investment / Local Families making ends meet • Private Property Rights / Community and Customer Expectations • Resort Areas/Access to accommodations county wide Transient Accommodation Proposed Ordinance Rentals Updates Bill 121 Overview • Key Definitions • Three Types - Where Permitted • Registration Process and Nonconforming Use Certificates • Operational standards • Enforcement and tax amnesty • Hosting platform accountability Transient Accommodation£, Proposed Ordinance Rentals Updates STVR --> TAR All Vacation Rentals referred to as Transient Accommodation Rental (TAR) Furnishing of a room, apartment, suite, single family dwelling, or the like to a transient for less than one hundred eighty consecutive days (Reference section 237D-1, Hawaii Revised Statutes) • Owner-Hosted TAR - any transient accommodation rental hosted by a person who uses the building site as their principal home • Operator-Hosted TAR - any transient accommodation with a person operating a transient accommodation rental on behalf of a property owner, who resides on the same building site as the transient accommodation rental and uses it as their permanent address for legal purposes • Un-hosted TAR - any transient accommodation rental that is not the principal home of the property owner and without an operator located on the same building site during rental operations Transient Accommodation Proposed Ordinance Rentals Updates Transient Definition "Transient" or "transients" means any visitor or person who rents or uses a lodging or dwelling unit, or portion thereof, for less than one hundred eighty days and whose permanent address for legal purposes is not the lodging or dwelling unit occupied by the visitor. This definition shall not apply to: (1) Nonpaying guests of the family occupying the unit; (2) Clients in health care facilities; (3) Full-time students enrolled in an educational institution in the County of Hawaii; Transient Accommodation l Proposed Ordinance Rentals Updates Transient Definition (Cont.) (4) Employees who receive room and/or board as part of their salary or compensation including agricultural workers*; (5) Occupants of group living facilities, authorized by the department of health; (6) Military personnel; (7) Health care workers temporarily employed at a medical facility in the County of Hawaii*; (8) Low-income renters receiving rental subsistence from the state or federal governments whose rental periods are for durations shorter than sixty days; or Transient Accommodation Proposed Ordinance Rentals Updates ,„, Transient Definition (Cont.) (9) Occupants of lodging provided by nonprofit corporations or associations for religious, charitable, or education purposes; provided that no income is produced, even if the income is used for or in furtherance of the exempt activities of such religious, charitable, or educational corporation or association. * Exclusions at County level only Transient Accommodat"on inance Proposed Ord Rentals Updates TAR Registration and Exclusions The County of Hawaii recognizes three types of transient accommodation rentals that must be registered with the planning department Registration as a transient accommodation rental shall not be required if: • The rental is not being provided to a transient or transients as defined by this chapter; • There is an emergency declaration enabling temporary shelter for displaced persons; • The dwelling is the principal home of the host and is provided as a home exchange and no financial exchange occurs; or • The dwelling is being provided to a tenant under a month-to-month lease subject to chapter 521, Hawaii Revised Statutes, the Hawaii residential landlord-tenant code. Transient Accommodation Proposed Ordinance Rentals Updates . _ _ rl. Owner- Hosted TAR When the transient accommodation rental is used as the principal home of the owner, a transient accommodation rental may be registered at any time in any zoning district subject to the following requirements: • Located in a single-family dwelling, inclusive of a detached bedroom, or guesthouse. • Not be permitted in an additional farm dwelling (HRS), second dwelling, or ohana dwelling (except with a nonconforming use permit) • The owner may not live in a guesthouse or a detached bedroom Transient Accommodation Proposed Ordinance Rentals Updates Operator- Hosted TAR When the transient accommodation rental is used as the residence and permanent address of the operator, a transient accommodation rental may be registered at any time in the following districts: • V, CG, CN, CV, and CDH districts (including these designations in PD) • Residential districts, situated in general plan resort and resort node areas and areas designated as open which adjoin the resort or resort node areas • RM district within a condominium property regime Operator-Hosted TARs currently operating outside these areas will be grandfathered in with a nonconforming use certificate. Transient Accommodation Proposed Ordinance Rentals Updates Un- Hosted TAR When the transient accommodation rental is un-hosted, a transient accommodation rental may be registered at any time in the following districts: • V, CG, CN, CV, and CDH districts (including these designations in PD) • Residential districts, situated in general plan resort and resort node areas and areas designated as open which adjoin the resort or resort node areas • RM district within a condominium property regime No new nonconforming use certificates will be granted. Transient Accommodation ° Proposed Ordinance Rentals Updates Chan es in permitted areas g (1) Short-term vacation rentals shall be permitted in the: (A) V, CG, CN, CV and CDH districts, including these districts situated within a project district; (B) Residential and commercial zoning districts, situated in the General Plan Resort and Resort Node areas, including areas designated as open in the general plan which adjoin the resort or resort node areas along the shoreline and areas within a project district; and (C) RM district, for multiple family dwellings within a condominium property regime as defined and governed by chapters 514A or 514B, Hawai'i Revised Statutes, including within a project district. Transient Accommodation" Proposed Ordinance Rentals . �.. �,.. �.. �,M., �.�. � .�. ,. Updates Examples '..Lgt"., e,/ 1 1,[:::.\:\,,,,,,:‘:N\l,;,: fili 1.1\I„.,. } V6P)10 \...., N‘,>,...".... A-,1;; *Ilk* 4111 "..,iv;;;; VW* c \ \� ,, , ,:.;, h.% . ,,,,,, \:,, ' \ WO , lro.,,- \\..,__,..,_,„-- A ,,,4411‘.; ii 111:4:!&n:: . ,mie 7%. 0 I , at , A . ,, -- . --,:t4.A.'''' \ w,,,,,,,....\„ , \---4,:-K-\ 1144 jet0 \ 01 i i : "\41T1‘,.. , \\'NI\ AI if \ �\ Waikoloa Kahaluu Transient Accommodation ii Proposed Ordinance Rentals Updates Examples ip, rippoilw* .., ill, 8 . . litilf/a11111111 11141 v" 74 ,, // "- .,, t .\ -,-, ....., i -iii- -..._,,,,, , Atte'', ' #%\*$ .„ , , Keaukaha Hualalai TransientAccommor Proposed Ordinance Rentals Updates Other TAR Requirements • Off-street parking to be determined by the department's transient accommodation rental parking schedule; • Must meet health, safety, and construction code requirements established by law (as certified by the owner); • Must have State of Hawai`i general excise tax and transient accommodation tax licenses that are in effect; and • Must be current on their Hawaii County real property taxes Transient Accommodation Proposed Ordinance Rentals Updates TAR Registration Process This is process is for a registration not a permit When to register, registration process and annual renewal • Those currently registered as STVRs will not need to reregister • TAR can continue to operate until registration is processed Changes in information and ownership Nonconforming use certificates (Ohanas & Operator-hosted) Transient Accommodation ;; Proposed Ordinance Rentals Updates ., Proposed TAR Fee Schedule Rental Type Initial Registration Annual Registration NUC Initial & Annual Renewal Renewal Owner-Hosted $500 $100 $250 Operator-Hosted $750 $150 $375 Un-hosted $1000 $250 $500 Transient Accommodation Proposed Ordinance Rentals ,::_,. _ _. Updates OperationaL Standards Goal was to make operational standards easierto understand, measurable and enforceable. • Posted information and responsive management • Good neighbor standards: Guest limits, gatherings, events, quiet hours, parking • Advertising and signage Transient Accommodation Proposed Ordinance Rentals Updates a'- Proposed TAR Fine Schedule yt Penalty Fees • First Violation $2,500 • Second Violation $5,000 • Third Violation $10,000 • Plus 2 times the highest advertised nightly rate if uncorrected Repeated violations • Three violation within twelve-month registration can be suspended • Failure to address violations can result registration renewal denial *These decisions can be appealed through standard appeals process Transient Accommodation Proposed Ordinance Rentals Updates Real property tax amnesty Under current Real Property Tax Code (Chapter 19): • Properties operated as TARs are not eligible for the homeowner's tax rate • Homeowner's tax exemption is applied proportionally • There is no 3% value CAP Amnesty under proposed bill: • No rollback and 3% CAP remains if TAR operations cease. • Otherwise, no rollback assessed for tax years 2021-2023 • Amnesty can not be applied retroactively Transient Accommodation Proposed Ordinance Rentals Updates . _ _ Hosting Platform Accountability A hosting platform is a business or person that provides a marketplace through which transient accommodation rentals may be offered for rent (VRBO, Air B&B, etc.) • Must register with the county • Must provide monthly reporting Transient Accommodation Proposed Ordinance Rentals Updates • } Public Outreach • Draft 1 presented in November 2022 • Website Hawaiicountytar.com created January 2023 • Three public webinars and FAQs posted to the site • Numerous meetings conducted with interest groups • Meetings with the department and department staff Transient Accommodation Proposed Ordinance Rentals Updates • Introduce Code Change at Council Review in PLUD Policy Committee: Public Hearing Refer to Planning Commissions Both Planning Commissions Review, Public Hearings BILL i Sends recommendations to Council PLUD Policy Committee 1 PLOD Policy Committee Sends Recommendation 1 to Council IF TIMELINE 1st Reading at Council 2nd & Final Reading at Council Minimum 6 opportunities to partcipate in public hearings • Transient Accommodation Proposed Ordinance Rentals Updates