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HomeMy WebLinkAboutCarr, Kathleen Tsuneda, Kaci From:Kathleen T Carr <kcarr@mcn.org> Sent:Thursday, November 5, 2026 10:27 AM 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 to express my opposition to Bill 147 and portions of Ordinance 25-50 in their current form. I am 80 years old and have operated one small vacation rental room in my home in South Kona for 25 years. I have consistently paid all required TAT and GET taxes. Until now, hosted vacation rentals like mine were not required to register. According to the Planning Department, the registration period is September 1 through December 31, 2026. Under the new legislation, I would be required to register as a Bed & Breakfast and meet all the associated requirements, including obtaining a Special Use Permit, even though I do not provide breakfast or food. I am asking the County to create a simple registration category for hosted vacation rentals that does not require a Special Use Permit on state agricultural land or force homeowners into the Bed & Breakfast classification. I support reasonable registration and tax compliance, but the current requirements are complicated, confusing, and unnecessarily burdensome and harmful for small, owner-occupied rentals. 1. Consider the Economic Impact of Vacation Rentals The County Council commissioned an economic impact study by Hunden Partners in 2025 to better understand the role of short-term vacation rentals (STVRs) in Hawaii Island's economy. However, Ordinance 25-50 was passed before the study was released. The study found that:  STVRs generate approximately $710 million in annual lodging revenue and account for 43.7% of visitor stays on Hawaii Island.  Visitors staying in vacation rentals contribute an additional $565 million to $862 million to the local economy through shopping, dining, transportation, and activities.  Each rental unit supports an estimated 1.6 full-time and 4 part-time jobs.  More than 75% of owners operate just one rental unit, and 54% depend on this income to cover basic housing expenses.  Only 4% of surveyed owners said they would convert their property to long-term rentals if vacation rentals were banned.  Approximately 24% of vacation rental visitors said they would not visit Hawaii Island if these accommodations were unavailable. The study recommended focusing on full registration and licensing compliance rather than broadly restricting vacation rentals. These findings deserve serious consideration before implementing regulations that could significantly reduce the number of available rentals. 2. Registration Requirements Are Unclear and Create Financial Risk The registration requirements are vague, making it difficult for homeowners to know whether their applications will be accepted. 1 If an application is denied, homeowners could face a difficult choice: stop renting and lose needed income, or continue renting and risk becoming illegal, with potentially severe penalties. For many older residents and families, this income is essential to remaining in their homes. Rising property taxes, insurance, and living expenses have made it increasingly difficult to afford living on the island. If homeowners are forced to sell, many local residents may not be able to afford these properties, leaving them available primarily to mainland or foreign buyers. 3. Additional Building Permits Will Create More Delays Requiring building division approval for these rentals could further burden an already overloaded permitting system. Building permits can currently take up to two years. Adding more requirements to this process could make existing housing and permitting problems worse rather than better. 4. Many Vacation Rental Units Cannot Become Long-Term Housing One argument for restricting vacation rentals is that doing so will create more housing for local residents. However, many hosted rental rooms and units are simply not suitable for long-term living. My rental is a 350-square-foot downstairs room without a stove, closets, or adequate storage. It works well for visitors who spend most of their time enjoying the island, but it is not appropriate for long-term residential use. There is also the concern of landlord protections. I previously experienced a situation in which long-term tenants failed to pay rent or utilities for five months, damaged the property, and ignored eviction notices. Resolving the situation was financially and emotionally difficult. These experiences make me reluctant to rent long-term, particularly when the rental is part of my own home. Before imposing further restrictions, the County should also evaluate whether the 2018 regulations on non-hosted vacation rentals actually improved the local housing situation. 5. The Proposed Penalties Are Disproportionate I understand that Bill 147 may not intend to eliminate all vacation rentals, but the complicated registration process and severe penalties could result in many units being forced out of operation. The proposed fines of $5,500 per day for a first offense, $7,500 per day for a second offense, and $10,000 per day for subsequent offenses are extremely high and could financially devastate ordinary homeowners. A reasonable registration process should include clear requirements, fair opportunities to correct deficiencies, and penalties that are proportionate to the violation. 6. The Impact on Small Homeowners, Visitors, and Local Businesses This legislation could affect more than 7,500 families, as well as the local workers who clean, maintain, and service these rentals. For me, at age 80, this income is essential. I have limited opportunities to earn additional income, and operating one small rental room in my home allows me to afford to remain here. In South Kona, lodging choices are already limited. The Manago Hotel, once the area's only hotel, is no longer operating as a hotel. Many of my visitors prefer an affordable, authentic Hawaiian experience rather than a resort or hotel setting. Vacation rentals provide that choice and bring visitors and spending into our local communities. My Request to the County Council I respectfully ask the Council to reconsider Bill 147 and the portions of Ordinance 25-50 that place unnecessary restrictions on small, hosted vacation rentals. Specifically, I ask that the County: 1. Create a simple, separate registration category for hosted vacation rentals. 2 2. Allow small hosted rentals on state agricultural land without requiring a Special Use Permit. 3. Avoid requiring hosted rentals that do not serve breakfast to be classified as Bed & Breakfasts. 4. Establish clear, understandable, and reasonable registration requirements. 5. Reduce excessive penalties and provide homeowners an opportunity to correct application deficiencies. 6. Avoid adding unnecessary building permit requirements that further delay the permitting process. 7. Consider the findings of the Hunden economic impact study and conduct an independent evaluation of whether existing vacation rental restrictions have actually increased long-term housing. I believe reasonable regulation and tax compliance are important. However, the current legislation risks creating significant financial hardship for longtime local residents, small homeowners, workers, and the tourism industry without necessarily solving the housing shortage. Please consider the many ordinary residents who depend on one small hosted vacation rental to remain in their homes and continue living on Hawaii Island. Thank you for your consideration. Aloha, Kathleen kcarr@mcn.org 3