HomeMy WebLinkAboutCarr, Kathleen
Tsuneda, Kaci
From:Kathleen T Carr <kcarr@mcn.org>
Sent:Sunday, September 13, 2026 5:37 PM
To:Council Testimony
Cc:Kathleen T Carr
Subject:Testimony about Bill 147 and Ordinance 25-50
To the Hawai'i County Council,
I am writing a testimony to you again because I oppose Bill 147, and parts of Ordinance 25-50 in their
current form. I am 80 and have been operating one small vacation rental room in my home for 24
years, paying all TAT and GET taxes, and had not been required to register as a hosted vacation
rental until the deadline of September 1-December 31, 2026, according to the Planning Dept. With
the new ordinance and bill, I would need to register as a Bed & Breakfast, subject to all of those
requirements including getting a special uses permit, even though as a hosted TVR, I do not provide
breakfast or food. I would like to see a simple hosted rental category that doesn’t
require a special uses permit if on state agricultural land or being classified as a B
& B. Visitors have had an understanding for many years that a B&B provides breakfast, whether that
is technically correct or not. I would support a reasonable registration process, but the Ordinance and
Bill 147 are too complex, not supportive of the small hosted vacation rentals, restricting, and
confusing as written.
In 2025, the County Council passed a resolution to conduct an economic impact study on
the effects of short-term rentals on the economy, and reiterated the need for information
before moving forward with the regulations. However, Ordinance 25-50 was passed a
week before the economic impact study was released. The Study, conducted by Hunden
Partners, revealed that STVRs (the term then applied to all short-term vacation rentals,
hosted or not) generate $710 million in annual lodging revenue and account for about
43.7% of all Big Island visitor stays, making them vital to the island's tourism-driven
economy. \[1, 2, 3\]
Key Economic Impacts
Lodging and Visitor Spending: STVRs generate nearly the same lodging revenue as hotels
on the island. Beyond lodging, STVR visitors inject an additional $565 million to $862 million
into the local economy through food, shopping, transportation, and activities. \[1, 2\]
Job Creation & Employment: The study estimates that each STVR unit supports an average
of 1.6 full-time and 4 part-time jobs. Limiting or banning STVR operations could jeopardize
over 12,000 full-time and 30,000 part-time jobs island-wide. \[1, 2\]
Tax Revenue: The study estimates there were roughly 8,000 active STVR units on the Big
Island, but only about half were licensed (hosted vacation rentals were not required to register,
but many still paid TAT and GE). Achieving full registration compliance could increase county
Transient Accommodations Tax (TAT) collections from $9 million up to $21 million
annually. \[1, 2\]
Housing & Ownership
Impact on Long-Term Housing: The study found that restricting STVRs would not
significantly free up long-term housing. Only 4% of STVR owners surveyed stated they would
1
convert their property to long-term rentals if STVRs were banned, with 68% stating they would
not. \[1\]
Primary Owners, Not Investors: More than 75% of STVR owners operate only one unit, and
54% rely on this rental income to cover their basic housing-related costs. Only 20% of
operators view their property strictly as an investment. \[1\]
Tourism Preferences
STVRs largely attract budget-conscious travelers, larger family groups, and visitors interested
in outdoor recreation and local culture. \[1\]
Approximately 24% of STVR visitors indicated they would not have visited Hawaii Island at all
if vacation rentals had been unavailable, meaning that their spending would be completely lost
rather than redirected to hotels. \[1\]
Recommendations
Rather than a blanket countywide ban, the Hunden study recommended that Hawaii
County continue to allow and support STVRs, but strictly focus on 100% registration and
licensing compliance to ensure all tax revenues are collected. \[1, 2\]
To review the full, comprehensive findings, you can access the complete Economic Impact Study on Short-Term
Vacation Rentals provided by Hunden Partners. \[1\]
Registration requirements are vague and do not inspire trust that a registration
application would be accepted. That places some of us in a situation where if our
applications are not accepted, then we become illegal if we continue to rent, or if we stop
renting, we will probably not be able to afford to stay in our homes and may be forced to
leave the island. It has become very expensive to live here, with the rising property tax,
insurance and costs of living. And if we are forced to sell, the local residents would mostly
not be able to afford the market prices these days, which means that mainlanders or
foreign interests would be purchasing those properties. There are many houses on the
market currently, and very few are selling.
The building division approval is also problematic because the building permits
presently can take up to two years to build a house, and this proposal would
overburden the permitting process even more. Part of the housing shortage
problem is the obstacles in getting permits in a timely manner.
One of the reasons for the new proposed regulations is to create more housing for
residents. However, my unit and many others would not be suitable for long term
rental. One reason among others, is that there have been no stoves permitted in these
units or rooms. Most vacationers do not do much, if any, cooking so as a vacation rental it
is not a problem. Mine is a 350 sq. ft. downstairs room, which just doesn’t have
satisfactory facilities for long term rentals, including no closets or storage.
A reason that many vacation rental owners are hesitant to do long term rentals,
including myself, is the way the Hawaii rental code is written. All the benefits go to
the renters, and if you end up with a bad renter, it is almost impossible to get them
out This has happened to me in the past in another location, and not only did the long
term renters not pay rent or utilities for 5 months, but they were nasty and damaged the
place before they eventually left. They ignored the eviction notice, and there was no
2
prompt action by the county to get them to leave. It was a real financial hardship and left a
very bad taste in my mouth. I would not want to have that situation in my home.
The county passed regulations for non-hosted vacation rentals in 2018 to create
additional local housing, but has there has been any independent research
presented on the results? Have those regulations helped the housing situation? The
current legislation as written will create far more hardship for locals than whatever benefits
it will provide and will not solve the housing shortage.
I understand that Bill 147 isn’t trying to shut down all vacation rental units, but it will
dramatically decrease the number of vacation rental units unless the registration
process is more simple and user-friendly, and the penalties of non-acceptance
aren’t so severe. Fines listed as $5500/day for a first offense, $7500/day for a second
offense, and $10,000 a day for subsequence offenses seem quite hostile and out of
proportion to what residents could pay.
This legislation will affect more than 7500 families, including me, plus all the jobs
created for service providers who clean and maintain the rentals. For many of us,
we rely on this short-term vacation rental income to be able to afford to live on this
island, to make ends meet each month. Being 80, there are not a lot of other employment
opportunities for me, so it is essential that I be able to continue offering part of my home
for short term vacation in order to be able to continue living in my home and staying on the
island.
I live in South Kona, and there was only one hotel, the Manago Hotel, in the area,
which is now no longer available as a hotel. My visitors do not want to stay in a
hotel or resort setting, but would rather have a more affordable authentic Hawaiiana
vacation, so they love vacation rentals. I think it is important for our visitors to have a
choice in the kind of experience they want in accommodations. This legislation will also
hurt our tourists and the income that the state derives from these vacation rentals.
From my perspective, it seems that this proposed legislation would create a lot of hardship
for the many families currently hosting vacation rentals, create angry constituents, and
unintended consequences, financial and otherwise.
Thank you,
Kathleen Carr
kcarr@mcn.org
3