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Home My WebLink AboutCOM 0236.127 2024-20262045072 P / counclll bt 141 Bert T. Kobayashi, Jr." Kenneth M. Nakasone* Of Counsel: /yy M 951 Alan M. Goda" Harry Y. Oda Kenneth Y. Sugita" lllM/� `` � Gregory M. Sato" Wendell H. Fuji" John R. Aube* Jesse W. Schiel° Clifford K. Higa° Charles W. Gall" Craig K. Shikuma' Burt T. Lau* Neal T. Gota Lex R. Smith" John F. Lezak' Charles D. Hunter Joseph A. Stewart" Larry L. Myers* Robert K. Ichikawe Brian D. Tongg David Y. Suzuki" Christopher T. Kobayashi" David B. Tongg'` KOBAYASHI SUGITA & GODA LLP Jan M. L. Y. Kutsunai" Caycie K. G. Wong Andrew M. Carmody Attorneys at Law David M. Louie" Nicholas R. Monlux °A Law Corporation Max A. Ching Ying Gu Jonathan S. Moore Austin H. Jim On Aaron R. Mun Stephen G. K. Kaneshiro Bruce A. Nakamura* Travis Y. Kuwahara Ryan D. Louie Zachary K. Shikada Timothy T. Silvester Reece Y. Tanaka June 3, 2025 ZA o-c--� C— cQ COUNCIL OF THE COUNTY OF HAWAI`I z` Dr. Holeka Goro Inaba Chair -<, Dennis "Fresh" Onishi, Vice Chair counciltestimony@hawaiicounty_gov _m HEARING DATE: June 4, 2025 0 TIME: 9:00 a.m. Re: TESTIMONY ON BEHALF OF AIRBNB REGARDING PROPOSED BILL No. 47 (Draft 2) FOR AN , ORDINANCE AMENDING CHAPTER 6 OF THE HAWAII COUNTY -CODE (2016 EDITION, AS AMENDED), RELATING TO TRANSIENT ACCOMMODATIONS Dear Chair Inaba, Vice Chair Onishi and Council Members: We write on behalf of our client, Airbnb, regarding proposed Bill No. 47 (Draft 2), relating to Transient Accommodations ("Bill 47"). We appreciate the Council's ongoing dialogue concerning Bill 47. As summarized below, we have concerns regarding the specificity of language in Bill 47 and believe that it may not be legally enforceable as currently drafted. As such, we respectfully request that the Council refrain from taking action on Bill 47 at the June 4, 2025 meeting, so that the Council, staff and stakeholders have more time to address remaining concerns and discuss necessary clarifications. 1. Transient Accommodations Have Always Been Lawful, Residential Uses in Hawaii. Transient accommodation rentals have always been lawful, residential uses in Hawaii County. And hosts have opened and shared their principal homes to transient renters for decades, providing important visitor -serving accommodations and offering guests authentic cultural 999 Bishop Street, Suite 2600, Honolulu, HI 96813 1 Tel: 808-535-57001 Fax: 808-535-57991 www.ksglaw.com I jas ksglaw.cgrjt I �� 2omra 9' 9 Ref'. TO: Ref. Dote JUM - 4 0 r+ COUNCIL OF THE COUNTY OF HAWAI`I June 3, 2025 Page 2 experiences in all corners of the Island. These "hosted" rentals provide an incredible opportunity for visitors to Hawaii to meet and interact with locals who graciously share their homes. The sharing of one's home and property is fundamental to the Hawaiian experience and is an activity the County should continue to encourage. Unfortunately, Bill 47's overly burdensome, expensive, and confusing registration process would impose significant administrative burdens on hosts, inevitably leading many to exit the market. This would threaten, the ongoing viability of hosted rentals in Hawaii. The impacts would be felt not just by hosts, but throughout the broader Hawaii economy. It would have ripple effects on businesses like restaurants and retail shops that depend on out-of-state visitors and on professionals who provide services to transient accommodation rentals, including cleaning and maintenance staff. 2. Airbnb Has Specific Concerns with Bill 47's Registration Requirements. Bill 47 requires registration by any individual or entity that plans to rent a transient vacation rental ("TVR" ), but fails to provide clear registration requirements. Instead, it notes that registration shall be required "in a format prescribed by the director of finance." It also creates uncabined discretionary registration requirements providing that the registration process may include "other information or materials as the director of finance may require." Establishing requirements and penalties with broad, discretionary provisions creates a risk to the County of not being unable to enforce the requirements of Bill 47, and also places individuals in legal jeopardy despite there being no clear and consistent path to compliance. Proceeding with requirements for registration and penalties before establishing the registration process, and making planned changes to eligibility rules for hosts is putting the legislative cart before the horse. Airbnb is concerned that proceeding with this undefined procedure is ill-conceived and will potentially result in significant complications for both compliance and enforcement. To mitigate such risks, we respectfully request that the Council hold Bill 47 until the additional specificity, including a full establishment of the registration process and any changes to host eligibility rules including updates to land use regulations, can be established, vetted and implemented. 3. Bill 47's Requirements for Hosting Platforms are Vague and Should Not be Implemented Until the Process for Host Registration has been Completely Established. As drafted, Bill 47's hosting platform requirements potentially raise issues regarding the ability of hosting platforms to comply. As an initial point, to the extent that the County is requiring hosting platforms to monitor the content of posts of third -parties, such requirements are inconsistent with Section 230 of the Federal Communications Decency Act.' Moreover, even the reporting requirements that are currently specified and imposed are vague and onerous. Under the regulatory scheme set forth in Bill 47, it is not feasible for hosting 1 Doe v. Internet Brands, Inc., No 12-56638, 2016 WL 3067995, at *3 (9th Cir. May 31, 2016). COUNCIL OF THE COUNTY OF HAWAI`I June 3, 2025 Page 3 platforms to ascertain, determine or even review the necessary information required in Section 6- 51(a), let alone to confirm compliance by hosts. Similarly, the monthly reporting requirements of Section 6-52 are overly burdensome to booking platforms and do not have a rational basis to justify such frequent reporting. Ordinances must be clear and consistent both to be effective but also to avoid the need for future emergency amendment to resolve uncertainties or protracted litigation to remedy unlawful consequences. The current draft is at times confusing and raises concerns that hosts may suffer potentially arbitrary or discriminatory application of the law. 4. Bill 47's Fine Structure is Vague and Excessive. The fines proposed by Bill 47 not only function as a deterrent to hosts sharing their homes but are also so excessive as to raise federal constitutional concerns. The Eighth Amendment to the United States Constitution forbids the County from imposing excessive fines. The United States Supreme Court has held that "[t]he touchstone of the constitutional inquiry under the Excessive Fines Clause is the principle of proportionality: The amount of the forfeiture must bear some relationship to the gravity of the offense that it is designed to punish."' Here, Bill 47 proposes to levy daily fines between $1000 and $10,000 per offense. The imposition of such large fines for a failure to comply with something like registration fails to meet the principle of proportionality.' Such sums dwarf the applicable penalties for similar failures to register, e.g., failure to register a motor vehicle is no more than $1000 total for the violation. Additionally, having such a large variance in fines between $1000 and $10,000 per day with no real criteria for when or why a larger fine is merited is vague, creates a risk that fines could be imposed based on arbitrary and capricious whims of County officials, and should be reconsidered. S. Conclusion While we understand the intended objectives of Bill 47, we believe that the language as written raises serious legal and policy concerns and requires several clarifications to avoid arbitrary or discriminatory application of the law and equal protection concerns. 2 United States v. Bajalurjian, 524 U.S. 321, 334 (1998). ' See, e.g., Kalthoff v. Douglas Cnty., 2021 WL 3010006, at *6 (D. Nev. July 15, 2021) (finding "it troubling that many of these fines [for violations of short-term rental ordinance] [we]re for several thousands of dollars without any authority to lower the fines for particular violators' circumstances" and enjoining enforcement of fines on constitutional grounds). COUNCIL OF THE COUNTY OF HAWAI`I June 3, 2025 Page 4 Airbnb is committed to working with the County, and we respectfully request that you refrain from taking action on June 4, to reconsider these issues and only implement this ordinance when it can be assured to be in a lawful and effective manner without resulting in unintended consequences. Very truly yours, David M. Louie for KOBAYASHI, SUGITA & GODA, LLP