HomeMy WebLinkAboutCOM 0675.582 2022-2024F /
I Cl!7., () R i , h (-j p # 5 C1FA
i...,l d 7 r.,1 v,1 U I U, act 68 1 J
+"Crnotirrc.ri I J, __CT r-g
Oct. 2, 2024, 9 a.m.
Hawai'i County Building
To: Hawai'i County Council, Policy Committee on Planning, Land Use, and Development
Ashley Kierkiewicz, Chair
Holeka Goro Inaba, Vice -Chair
From: Joe Kent, Executive Vice President
Grassroot Institute of Hawaii
RE: Bill 121 — RELATING TO TRANSIENT ACCOMMODATION RENTALS AND HOSTING PLATFORMS
Aloha Chair Kierkiewicz, Vice -Chair Inaba and other members of the Committee,
The Grassroot Institute of Hawaii has concerns with Bill 121, Draft 4, which would replace the existing
regulations on short-term rentals with a new set of regulations covering owner -hosted, operator -hosted and
unhosted STRs.
We are concerned about the effect this measure might have on existing STR operators, small businesses and
the broader Hawaii Island economy, and we urge that the county undertake an economic analysis of the
short-term rental industry in Hawai'i County before acting on this bill.
That said, if the bill is to move forward, Grassroot supports the amendment offered by Councilmember Jenn
Kagiwada that would lower the registration fees for owner -hosted short-term rentals. This change would
lessen the burden of the proposed regulations on local families running short-term rentals on the same
properties where they live.
As to our concerns, a 2020 study commissioned by the Hawaii Tourism Authority discovered that STRs are
generally less expensive than hotels, and that "30% respondents reported that if there was not a home and
vacation rental option during their recent stay in Hawaii, they would not have made the trip."'
' "Hawaii's Hame and Vacatian Rental Market: Impact and Outlook," prepared for the Hawaii Tourism Authority by JLUs Hotels &
Hospitality Group, April 20, 2020, p. 10.
1050 Bishop St. #508 Honolulu, HI 96813 808-864-1776 info@grassrootinstitute.org
The study did not look at Hawaii Island specifically, but it did find that STIRS added $6 billion to the state's
economy and sustained 46,000 jobs.2
The HTA study also surveyed 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
The HTA study indicated that many existing STIR hosts — who maybe rent out a room or a second unit on their
property — use their STIR income to afford Hawaii's high cost of housing.
These existing hosted STIRS also offer everyday folks the opportunity to participate in Hawaii's tourism
economy and build wealth for their families.
Grassroot also is concerned about the steep fines that would be imposed on those who imposed on anyone
who violates the new law. The proposed $10,000-per-day fines could quickly add up to an unpayable amount
— and even result in the owners losing their homes to foreclosures. Such a fine is not only excessively harsh,
but 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 s 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.
Thank you for the opportunity to testify.
Joe Kent
Executive Vice President
Grassroot Institute of Hawaii
Zlbd p.4.
3 "Hawaii's Home and Vacation Rental (Market: Impact and Outlook," prepared for the Hawaii Tourism Authority by kcs Hotels &
Hospitality Group, April 20, 2020, p. 16.
° 586 U.S. 146 (2019).
' 598 U.S. 631(2023).
1050 Bishop St. #508 Honolulu, HI 96813 808-864-1776 info@grassrootinstitute.org