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HomeMy WebLinkAboutMIN PC 2018/06/05 (2016-2018)Committee on Planning 26th Session Hawaii County Building 25 Aupuni Street Hilo, Hawaii June 5, 2018 CALL TO The regular meeting of the Committee on Planning was called to order at ORDER: 9:40 a.m., in the Council Chambers, Hilo, by Ms. Karen Eoff, Chair. ROLL CALL: Present: Ms. Karen Eoff, Chair Ms. Eileen O'Hara, Vice Chair Mr. Aaron S. Y. Chung, Member (came in later) Ms. Maile Medeiros David, Member Mr. Dru Mamo Kanuha, Member Ms. Susan L. K. Lee Loy, Member Ms. Valerie T. Poindexter, Member Mr. Herbert M. "Tim" Richards, III, Member Ms. Jennifer Ruggles, Member STATEMENTS The Chair directed the Committee to proceed to the next order of business, FROM THE Statements from the Public on Agenda Items. PUBLIC ON AGENDA ITEMS: The following individuals registered to speak and came forward when called by the Chair: Steve Lopez: Stephanie Donoho: (representing Kohala Cost Association) Maria Jampolsky Axel Kratel: Kendra Tidwell Nate Gaddis: (representing Hawaii Island Realtors) Bill 108, Draft 2 (Comm. 739.79), in support. Bill 108, Draft 2 (Comm. 739.79), in support. Bill 108, Draft 2 (Comm. 739.79), in support. Bill 108, Draft 2 (Comm. 739.79), comment. Bill 108, Draft 2 (Comm. 739.79), comment. Bill 108, Draft 2 (Comm. 739.79), comment. PC -26 June 5, 2018 Janie Damon: Bill 108, Draft 2 (Comm. 739.79), comment. Elisa Junqueira: Bill 108, Draft 2 (Comm. 739.79), in opposition. CHR. EOFF: Thank you. Is there anyone else that would like to testify this morning before we close the public testimony portion? Okay, I don't think so. So, I will go ahead and close public testimony at this time and Mr. Clerk, can you read in Bill 108, Draft 2? COMMUNI- The Chair directed the Committee to proceed to the next order of business, CATIONS: Communications. (There were none.) ORDER OF The Chair directed the Committee to proceed to the next order of business, RESOLUTIONS: Order of Resolutions. (There were none.) BILLS FOR The Chair directed the Committee to proceed to the next order of business, Bills ORDINANCES: for Ordinances. Bill 108: AMENDS CHAPTER 25, ARTICLE 1, ARTICLE 2, ARTICLE 4, AND (Draft 2) ARTICLE 5, OF THE HAWAII COUNTY CODE 1983 (2016 EDITION, AS AMENDED), RELATING TO SHORT-TERM VACATION RENTALS Defines where short-term vacation rentals would be allowed, establishes regulations for their use, and provides a way for an owner or operator to obtain a nonconforming use certificate that would allow them to operate in a non - permitted district. Reference: Comm. 739.79 Intr. by: Ms. Eoff and Mr. Kanuha Postponed: May 8, 2018 (Note: There is a motion by Ms. Eoff, seconded by Mr. Kanuha, to recommend passage of Bill 108, as amended, on first reading.) CHR. EOFF: Thank you, Mr. Clerk. At this time, I'm going to relinquish the chair. Normally, it would go to the Vice Chair, but I see the Vice Chair has an amendment that she'd like to discuss. So, I'm going to go ahead and give the chair back to Ms. David, who was chairing the meeting last time for us. Is that all right? MS. DAVID: Yes, it is, if no one else objects, I would be glad to. Page 2 PC -26 June 5, 2018 MS. EOFF: Okay, thank you, Ms. David. And there's a motion on the floor so you can just open it up. Relinquish Chair: At this time, Chair Eoff relinquished the chair to Acting Chair David. ACTING CHR. DAVID: Let the record show that I'm assuming chairmanship of the Planning Committee. Ms. Lee Loy, go ahead. Motion to Amend: Ms. Lee Loy moved to amend Bill 108, Draft 2, with the contents of Comm. 739.81. Seconded by Ms. Poindexter. ACTING CHR. DAVID: Go ahead. MS. LEE LOY: Thank you, Chair and thank you, Ms. Poindexter, for that second. When this matter was heard at our last committee meeting, I listened very carefully, again, to some of the comments that were emerging through that conversation. I prodded and kind of put the Planning Department a little bit in front of us to ask very specific questions, really trying to find some very refined, consistent language that anyone entering into this short-term vacation rental understood what they were getting into and what the parameters were. So, what you see before you in Communication 73 9.8 1 what I did is under Section 4, it states, "Upon change in ownership, the new owner shall notify the planning director forthwith of the change in ownership and provide contact information for the reachable person." Then the sentence continues on and I believe one of our testifiers mentioned something about that, with the change in ownership, it's not just kind of left. There is a duty to the new owner to report that there has been a change in ownership. Also, throughout the bill, we used the owner or designated contact, and what I want to try and do is create some language where there was a clear understanding that there wasn't the owner or designated contact person and a reachable person. So right now, it's the owner and a reachable person, which also follows the definition that's contained in this bill. One other concern I heard was about signage in some of these residential communities where people would put up sandwich boards within the County right-of-way. So, what I did is kind of filter out what we already have in another section of our Planning Department rules, as it relates to commercial signage and pointing them back to another section within our Code, which is Chapter 3, which identifies how signages are utilized and how you go and apply for that permit. That really was my attempt to listen to what the community was saying. Get to some language that we could all rely upon. I know we heard some other good feedback today, too, so I'm going to yield at this time and listen to the rest of my colleagues. Page 3 PC -26 June 5, 2018 ACTING CHR. DAVID: Thank you, Ms. Lee Loy. Ms. Eof£ MS. EOFF: Thank you. Actually, I didn't know my light was on, but I might as well say I just wanted to first of all, thank all of the testifiers that came out today because I think we're honing in on some good refinements to the bill and I'm glad that people are continuing this discussion. I want to thank Ms. Lee Loy for picking up on these changes and I believe—well, I just want to mention that we have the Planning Director, we have Mr. Takemoto, and we have Amy Self, Corporation Counsel for Planning here if anybody wants to question them too. But as far as right now, with these changes, I am comfortable with adopting this amendment. I'd like to hear from everybody else and also from the department if they had any concerns about the language here. But, as far as I can tell, I think this is a good additional language that we can go with. Thank you. ACTING CHR. DAVID: Thank you, Ms. Eof£ Anyone else? Mr. Kanuha. MR. KANUHA: I ditto what Ms. Eoff said. Can I bring the Planning Department up? (Note: At this time, Planning Director Michael Yee came forward to address the members of the Committee.) MR. KANUHA: Good morning. MR. YEE: Good morning, Michael Yee, Planning Director. MR. KANUHA: Aloha, Director Yee. Did you have any comments on these amendments? Or 739.81? MR. YEE: No, we were okay with the amendments. MR. KANUHA: Okay, thank you, and I was as well. I just wanted to make sure the Planning Department was behind it too. I'm fine with it. I also wanted to thank everybody for coming out and testifying. We heard a lot of really great comments and great ways to improve the bill. It's going to be a long process. We're going to be going through that process with the community, and please don't stop giving us good information to make this bill better. So again, mahalo, Ms. Lee Loy, for submitting these amendments, and I'm fine with them. ACTING CHR. DAVID: Thank you, Mr. Kanuha, anyone else? I, too, before we take a vote on this, I, too, would like to thank you because I think this really clarifies, further clarifies, this really important piece of legislation. So, thank you for your good work. All those in favor of amending Bill 108, Draft 2, with the contents of Communication 739.81 please say "aye." Page 4 PC -26 Vote on Motion to Amend: (Approved) June 5, 2018 The motion to amend Bill 108, Draft 2, with the contents of Comm. 739.81 was carried by the following voice vote: Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Acting Chair David — 9. Noes: None. Absent: None. Excused: None. ACTING CHR. DAVID: Now, Ms. O'Hara, I believe MS. O'HARA: Thank you and thank you, Ms. Lee Loy, for introducing those amendments. I have another piece here that I'd like to ACTING CHR. DAVID: Okay, wait. Hang on. I'm seeing some signals from our County Clerk. Mr. Clerk, we just voted to amend draft two to draft three, the question is, could we just discuss and not take any voting action on Ms. O'Hara's proposed draft, because other than that, we would not have any opportunity to discuss this until we come back again. So, is that okay? MR. HENRICKS: Sure, that sounds practical. Just maybe not make a motion to amend, but allow discussion. ACTING CHR. DAVID: Really? MR. HENRICKS: Yes. MS. DAVID: Okay. MR. HENRICKS: I think a motion to amend would be problematic because the amendments don't work together. ACTING CHR. DAVID: I see. MR. HENRICKS: So, a vote to amend would repeal some parts of Ms. Lee Loy's amendment and what you guys just approved. So, discussion would be fine, but not action. ACTING CHR. DAVID: Alright, so, we'll just proceed with discussion again. Thank you very much for clarifying that. Ms. O'Hara, without a motion, please discuss Communication 739.82. MS. O'HARA: Thank you. I have had concerns about this bill from the get -go, and my concerns are magnified by the recent actions of the last month. I've never Page 5 PC -26 June 5, 2018 believed that we should be basing it on a grandfathering clause and now that becomes even more problematic, given what has happened in the Puna district. I previously had maybe a thousand short-term vacation rentals in my district, and now we have none, and we have a huge demand for long-term rentals. The shifting around of rental properties is not allowed under the bill as it's written, shifting from a long-term rental to a short-term rental. There needs to be more flexibility. Furthermore, some of the amendments that I added, as you can see, Section 2 of the bill, I put back in a phrase that was in the original bill version of the bill that we first looked at, because I'm not sure why it was ever removed. It has to do with private covenants that prohibit any short-term vacation rentals shall not be invalidated by this chapter. I think that's an important thing to have in this bill because I for one, still live in a community that has those types of CC&R's (Covenants, Conditions and Restrictions). There are other communities, likewise, and I think that's an important recognition. I also was, and remain concerned about the fact that we are charging non- conforming properties, and yet those that are within a designated district pay no registration fee. That puts the burden solely on the non -conforming properties. So, in Section (c) of, I mean in number (c) of Section 2, I put in a requirement that they pay a one-time fee of $100 and an annual fee of $100 every year thereafter to the Director of Finance. It's really important that we keep accurate records here at the County. The magnitude of the disaster in Puna right now is making us well aware of that, not knowing where our visitor population is at any given time. So, I think it's very important that be reestablished or put into the bill. The rest of the language added there in Sections 2 and 3 just are to provide conformance with that payment of fee. In section (3)(d), we talked about the Good Neighbor Policy, but we aren't really acquiring the information in advance. If the Planning Department is not doing site inspections, when they're approving these, all they're doing is looking at plans that have been filed, which may not be complied with on the ground because a lot of people add things and do a lot of different things. It's important to hear from the neighbors before that registration is completed. So, this is a requirement to send out notification letters to all owners within 500 feet of the perimeter boundary of the affected property when a registration form is submitted to the Planning Director. That notification letter allows surrounding residents to be aware that they're applying for the permit or applying to be a short-term vacation rental, and also allows for the neighbors to identify things that are not correct on the application. Parking, for instance, inadequate parking, knowledge of additional units in addition to what's being put onto the application. So, that will give some front information for the Planning Department to make their determination. Page 6 PC -26 June 5, 2018 Then, flipping over to page three of my amendment, I have asked for the fees or I have outlined the fees to be modified so that it isn't a flat fee. That flat fee or renewal fee for non -conforming, this is for the non -conforming certificates that must be renewed every year, did not seem to be reasonable or equitable as a flat fee. Some people have very minimal accommodations that they are leasing or renting, others have five bedroom homes. So, this is based on a percentage or an amount of TAT that is paid, the Transient Accommodation Tax. If less than $500 a year is paid in TAT, then the registration fee would be $50. Then it moves up through the highest range would be if someone is paying greater than $10,000 in Transient Accommodation Tax, they should be paying $1,000 a year for their non -conforming certificate. So, it ranges from $50 to $1,000. A good deal will probably fall in the $500 to $2,000, that's $100 per year, or the $2,000 to $5,000 at $350. So, it stepped up to be a more equitable fee. So that, in essence, sums up most of the changes. The last one is a definition, and that is in Section 3 of the bill, and it's adding the definition. ""Designated contact person" means a professional property manager licensed in the state of Hawai'i." That is currently the requirement for short-term vacation rental property management, and I think it needs to be recognized in this bill. I think that covers everything. I would like to hear what everyone else has to say about the amendments. ACTING CHR. DAVID: Thank you, Ms. O'Hara. Mr. Chung, go ahead. MR. CHUNG: I'm wondering, with regard to the definition of a designated contact person, we just took that out with the other amendment. What do you have to say about that? The reason why I ask is, I was going to press my button when we were talking about that last amendment because I though the better way to do it was to do exactly what Ms. O'Hara did. Define contact person by saying that it's somebody who's reachable. I really thought that was the better way but in deference to my colleague, I went along with it. I'm wondering, Ms. O'Hara, do you have any comments on this? I mean inasmuch as really, we don't have any reference to a contact person right now because of the amendment that was just passed. Maybe this is something that Ms. Lee Loy should weigh in on too. MS. O'HARA: I think maybe I would like to hear Ms. Lee Loy's response first. Thank you. MS. LEE LOY: Thank you. It really was that we didn't have a designation for a designated contact person. So, I pulled that out and used the definition that was being proposed in Bill 108, which was "reachable". I know we're in a situation where we moved in a bunch of amendments and we're at a draft three, and maybe this is a better question for our Planning Director on how we start moving in these definitions because that was my general concern, was we didn't have a definition for designated contact person. Then if challenged, because we didn't have a Page 7 PC -26 June 5, 2018 definition, through an appeals process, we left it uncertain again. So, I look forward to your thoughts, Mr. Yee. MR. YEE: Would it be okay to call Mr. Takemoto up? He had crafted a lot of the early definitions. (Note: At this time, Executive Assistant to the Mayor Roy Takemoto came forward to address the members of the Committee.) MR. TAKEMOTO: The principal is to say we want somebody accountable and responsive. So, we could amend "reachable" to incorporate the proposed designated definition or we could put back designated and incorporate the reachable part. So, either way. MS. DAVID: Ms. Lee Loy. MS. LEE LOY: I would rather keep the definition of reachable and put in all the different options, like what Ms. O'Hara is saying, rather than owner, designated contact person who is reachable. I just wanted to get something a lot tighter and cleaner. That's my thoughts. MR. TAKEMOTO: The current definition of reachable does not provide for any competency like a professional, but if you wanted your cleaning person to be the one to respond, I think that was the reason why we didn't require a professional. So, I would suggest maybe putting it as either or that you have the option of hiring a professional to be that reachable person. ACTING CHR. DAVID: Mr. Chung, I believe—you're done? You're yielding? Okay, Mr. Chung, go ahead. MR. CHUNG: I appreciate that explanation. So, it's really something that the two of them are going to have to work out because they're mutually exclusive, these two provisions. I'm okay with either. ACTING CHR. DAVID: Okay, thank you. Ms. Eoff MS. EOFF: If I remember right, we've had this conversation. I brought this up to do kind of what Ms. O'Hara is doing to make sure that we refer back to real estate law, and that has been something that we've talked about in the past, maybe not at this meeting but among the attorney for Planning, and Mr. Takemoto, and Mr. Yee. But, I think that—what I understood was that real estate law prevails, State law prevails anyway. So, whatever applies, if a person is the reachable person for more than one home, I believe by law, State law, they must have a real estate license. So, we didn't put that language in here because it's a law any ways. But, I don't have a problem if we want to put it in somehow, to make sure that's Page 8 PC -26 June 5, 2018 clear. But, I think when that question came up before, we decided it wasn't necessary just because State law prevails anyway in this case. But, I don't know, is that correct? Or it's what you remember? So, maybe we can just add language, as you have done here, but not really need to change the reachable amendment that we just implemented. ACTING CHR. DAVID: Just for the record, I want to note that Mr. Takemoto did agree with your statement. Go ahead, Ms. O'Hara. I'm sorry, Ms. Lee Loy, go ahead. MS. LEE LOY: Thank you. I just wanted to share my thoughts on what's before us as far as the conversation. This might be a question for our Planning Director. This proposed amendment has a verification that notifies a surrounding property owner and it's noted as 500 feet, but I know within our Planning Department rules, for a use permit it's 300 for a special permit, it's 500, and I just wanted to hear from the Planning Director what his thoughts were and if we're actually creating some clarity or some inconsistencies. MR. YEE: So, first of all, I think you all understand this only hit my in -box a short time ago, so, some of us were quick to try to pull together some initial thoughts on it. So, I think I have to kind of address, I wouldn't call them inconsistencies, just where it's not—doesn't fit nicely into how we kind of conduct planning processes right now. On (1)(A), "Shall register with the planning department, pay a one-time fee ..." understand that this is a permit fee, an annual permit fee on something that people would already be legal to do. So, we typically don't charge a fee for people to be doing something that they're permitted to do within their zoning. So, just understand that. I understand why you're trying to spread it out, but understand that's something new to the Planning Department. So, hence then, verifying—in the rules, we'd probably want to work out if there was going to be a verification, who's going to conduct it and stuff, and whether it's 300 feet or 500 feet. That can be worked out. Again, the bigger question is, are we doing this verification once a year on their annual registration, or is it just a one-time change of ownership? We would want to define that better. Why, also the question would be, why is it only for a short-term vacation rental? We permit many different activities in permitted zoning areas and we don't have those activities having to provide notice. So again, we're stepping into an area that Planning doesn't go into typically, of having to do that verification for a use that's permitted within a zone. On Section 2 with (0, with the annual renewal fee, we provide a permit. When there's a permit, we have a fee for providing such. Trying to create a scale, Page 9 PC -26 June 5, 2018 although I understand the equity issues around that, I think it's problematic then to have our department having to assess and understand where does somebody really fall within TAT taxes? I think that could be problematic when the Planning Department, who just administers permits and fees, having to then decide where somebody fits into a scale. Again, just not something we do. A scale happens with, let's say, RPT taxes or Real Property Taxes. There's an assessed value and there's a value difference there. Again, it concerns me that we would put in a different area. That's it for now. ACTING CHR. DAVID: Thank you, Director. Any follow up? Mr. Chung. MR. CHUNG: With regard to the graduated fee schedule, I actually like it. I learned a lot about these vacation rentals. We've heard how people from the mainland are buying up properties, those are the extreme stories, but, there are also some other stories of when people were just trying to make use of their properties. This one lady, her property was foreclosed on, a really nice person and she was only making like about $8,000 a year. Things didn't work out. Her husband passed away. I mean, to make one size fits all for all of these situations, it seems kind of unfair to me. I know it's going to be an administrative nightmare on the part of the Planning Department, but I kind of like this concept, quite frankly. I'd probably support it. Thank you. ACTING CHR. DAVID: Thank you, Mr. Chung. Ms. O'Hara. MS. O'HARA: Well, I just wanted to respond to Mr. Yee. I don't know that we've got an explanation out of you as to whether in this zoning, that short-term vacation rentals are currently allowed in, is 300 feet or 500 feet, the appropriate distance. I thought it should be 300 feet. My Legislative Assistant claimed that it should be 500, so, is there an answer to that question? MR. YEE: I'm okay with 500 for now. I think we would vet that out at the Planning Commission if we needed to consider that more. MS. O'HARA: Okay, thank you. That's a good way to look at it because that's kind of a manini piece of it. The idea of the notification though, and I understand what you are saying about the fact that if this is an allowed use, why are they paying for registration? But, we are going to be doing quite a bit of intake at the Planning Department to register short-term vacation rentals. I'm assuming this is our intent, is to have a metric where we know how many we have and how many units there are, where they are, and they're going to be submitting information about their tax receipts, which needs to be confirmed and verified. There's going to be a lot of work here for the Planning Department, and I don't really believe that we should be doing that without charging a fee. So, that's my response to that. Page 10 PC -26 June 5, 2018 I think it's more than appropriate because we need good information and we are, in essence, through this bill, creating a short-term vacation rental regime, and this, in my opinion, is just part of that regime, this bill here. There are other parts that need to be worked on as well. So, I think it would behoove the Planning Department to collect a fee for that registration. So, that's my response to some of your comments. Thank you. ACTING CHR. DAVID: Thank you, Ms. O'Hara. Ms. Ruggles, go ahead. MS. RUGGLES: Thank you. I just want to start by first off, appreciating Ms. Lee Loy and Ms. O'Hara for bringing forth these very well thought out amendments that obviously, taking into consideration all of the concerns of testifiers and our constituents. Yeah, these areI'm really pleased with these. Thank you. I just wanted to ask what information does the Planning Department receive when you're requiring someone to demonstrate they're in good standing with the TAT tax? MR. YEE: I'm trying to think of a situation. I'm not practiced enough within our processes to think of a situation where we're having to review for TAT tax. MR. TAKEMOTO: Real property tax, our tax office issues some kind of good standing certificate. I would imagine the State Tax Office could issue something similar if they don't already have something in place. So, we wouldn't have to necessarily look at tax returns, per se, it would just be a certification from the Tax Office. MS. RUGGLES: Okay. So, is that what we are anticipating when we ask them to prove that they're in good standing? MR. TAKEMOTO: Yeah, we would probably—if something is already not in place, we would try to establish that to make it easier for everybody. MS. RUGGLES: Okay, I guess my question was MR. TAKEMOTO: We can get back to you whether there is a comparable good standing tax certificate that is available already. MS. RUGGLES: Okay, I guess my question was what is the Planning Department and the administration anticipating for what they're requiring from people to show that they're in good standing, as far as TAT goes? Because we could turn that into a twofold in that when they show that they're in good standing, they can show how much TAT that they paid, and then that should make it easy for the Planning Department to use this tiered system. Just a thought. Page 11 PC -26 June 5, 2018 And personally, as far as everyone registering within every department, I think that is fair and that's one thing that I brought up at the last meeting. I thought that it's not fair to require only the people within ag in rural areas to have to pay this fee and register. I think that for every commercial activity, there is some sort of registration via permit or otherwise, and that's for everyone to contribute their fair share to an even playing field. With that, I'll yield, thank you. ACTING CHR. DAVID: Thank you, Ms. Ruggles. Council Members? Ms. Eoff, go ahead. MS. EOFF: I just wanted to say, although I agree that if you're in a permitted area, we don't have any other process where we require you to register, but in this case, if we are requiring them to register, even if they're in a permit area, a slight fee could be attached to it, just because we do have to process that. But, I don't agree that it should be annual because once they're in, unless the ownership changes, like we just amended the bill to read, I think the one-time fee might be reasonable or doable. I don't know, that's just kind of off the top of my head. But, like I think Mr. Yee said, we just received all of this this morning, and I think we should have some time to digest it and then also, because it doesn't apply language wise to the amended version, we would need to, I guess, continue discussion and then decide how to move forward with incorporating maybe some of these changes properly, and how much we can do today. I think we just need to see how it goes. MR. YEE: Michael Yee, Planning Director. So, I absolutely understand the socioeconomic impact of short-term vacation rentals. So yes, it would be new territory for us to be creating processes for permitted uses within a zone. So, as we move forward, I just want us to be very thoughtful over why we would make a choice to go in that route. Again, I'm not necessarily opposed to it, I just want us to be thoughtful that if we open up that door, what it may lead to in other areas, and I don't know. Just have to be able to note that right now. Thank you. MS. EOFF: I had another comment about putting back in the language that, "Private covenants prohibiting use of any unit as a short-term vacation rental shall not be invalidated ..." That was in the bill. I think we took it out because it was causing some confusion, but obviously, private covenants always prevail. I mean unless the law changes in that district and they're not allowed at all, then a covenant that allowed it would have to be invalidated. But, do you believe that we should go ahead and put this back in? I can't really remember why it got taken out. I know private covenants would prevail. (Note: At this time, Deputy Corporation Counsel Amy Self came forward to address the members of the Committee.) Page 12 PC -26 June 5, 2018 MS. SELF: I'm sorry, but my voice is bad. Deputy Corporation Counsel Amy Self The reason I believe we took it out is because the County cannot invalidate a private contract, and that's what CC&R's are. It's a private contract between the association and its members. So, it's really superfluous to put it in because the County's not responsible for CC&R's. We cannot enforce their contract, we cannot invalidate their contract. It's a private contract. They can always what they would do is, if the person is violating the CC&R's, then the association would take that person to court to enforce their CC&R's. MS. EOFF: I think Ms. Poindexter wants to ask a question, too, but just to finish up, that's sort of like the language requiring the real estate license. I think we wanted to make the bill as simple as possible so we've taken out language that was unnecessary or redundant in some way. So maybe we can get an opinion. MS. SELF: Well, if you're talking about the MS. EOFF: I guess you can just talk about the CC&R part. MS. SELF: I did want to say something about the—if I can find it. Here it is, sorry. The definition of designated contact person, this will mean that every short-term vacation rental will have to have a licensed property manager, which is licensed by the State DCCA, Department of Commerce and Consumer Affairs. So, I don't know if youI mean it's up to the Council as to whether to require that or not. I mean to me, there's nothing illegal about it. I mean it's up to the Council. It just means that if you want to replace "reachable" with "designated contact person" with this definition, it will require all to have a licensed manager that someone can call instead of someone that can be reached, and who is not licensed but can be reached for any kind of problems when they get a call. That's the difference, but that's your call. ACTING CHR. DAVID: Thank you, Ms. Self. Ms. Eof£ MS. EOFF: I want to yield again. I see the Mayor has come in. I don't know if he wanted to add to this conversation or if he's just listening. ACTING CHR. DAVID: Welcome, Mr. Mayor, did you want to say a few words about what we're discussing on the vacation rentals? (Note: At this time, Mayor Harry Kim came forward to address the members of the Committee.) MAYOR KIM: I know I'm stepping in the middle of, over the middle of the road, but we began planning on this of what to do because of the fact that we had to do, we had to regulate this business and that's what it is, a business. I think we're the last county—the four counties not to make an attempt to regulate Page 13 PC -26 June 5, 2018 because it was not a problem for many years here and it really started to mushroom, as you all know, in the past three to five years. The theme was we must regulate this business. We started this, believe it or not, as Mike and Roy know, one week before we got inaugurated. We had a breakfast and we identified what our goals were, problems that we had to address, and this was one of the first product of what the communities were asking for. I know only a little bit of the hours of work put in because we tried to learn from Maui, Kauai, and Oahu, all the pros and cons of different things they tried. So, this Council, I just need you to know, which I know you already know, the extreme importance of a lifestyle that has been endangered in Maui and Kauai and Oahu because of a simple thing as vacation rentals. It takes away from rentals, it takes away from a lifestyle in regards to certain kinds of neighborhoods, et cetera. I appreciate people who have testified before you saying, "This is my income," and nobody wants to take people's income away, but I cannot let that be a reason why we don't regulate it, or we just throw up our hands and say no regulations, we do what we want with this business. And not to get sarcastic about it but to me, it's no different than saying we would allow stores, service stations or whatever, to open up anywhere. It is a business. But this is a little more in a sense because it infringes on a lifestyle. I ask this Council to know that Mike, Planning, and Corporation Counsel have worked on this for a long, long time. The presentation to you is to present what we feel is something, hopefully, we'll regulate it and we learn as we go. So, thank you very much for your consideration. ACTING CHR. DAVID: Thank you very much, Mr. Mayor. If anyone else has questions for Mayor, if not, we'll proceed. Thank you very much for coming. I have to go to Mr. Richards, first, he hasn't spoken. Mr. Richards, go ahead. MR. RICHARDS: Thank you, Chair. Just comment, and thanks, Mayor for your few comments. Referring back to Councilwoman O'Hara and Councilman Chung's comments, I agree that I think there needs to be some scalable in the licensing or fee structure, however we're going to do that. I don't think a one -size fits all and I appreciate the fact, Director, that you're talking about a clerical potential nightmare going forward, but I'm mindful that I think we need to be scalable. And the comment that Amy just made concerning the definitions, I have constituents that do a short-term rental to help them make ends meet when they're here part-time. If, by definition, they must employ a professional, that's actually going contrary to what we're trying to get done here. So, I think we're going to Page 14 PC -26 June 5, 2018 have to have something. I did hear a reference to maybe if it was multi -housing units or something along those lines. But, I think if our definitionso, we're going to have to do a little bit more massaging on this. I do like the direction of where it's evolving and continual conversation. I do like something that Councilwoman O'Hara has put forth, and I'm just trying to figure out what the best way to blend this stuff together because I think a couple of comments were made, not quite ready for primetime. I have to agree with that statement, but I think we're getting closer. I just wanted to make a few of those comments. I yield. ACTING CHR. DAVID: Thank you, Mr. Richards. Mr. Chung, go ahead. MR. CHUNG: I'm basically echoing what Mr. Richards says. There are a number of good features in this amendment, but as drafted, I really can't vote in favor of it right now. Because, I could be wrong, but it makes reference to something that's no longer contained in any drafts. The designated contact person, that's out already, based on what we just voted on a few minutes ago. But, I like the graduated scale. I would just request of Ms. O'Hara that she take this back and kind of redraft it somewhat to make it in conformity with what we have on the table right now, because there are some good features. But, I just can't support it right now because of some flaws that I see. ACTING CHR. DAVID: Thank you, Mr. Chung. Ms. Poindexter. MS. POINDEXTER: Thank you, Madam Chair. I really like what Council Member O'Hara put together. I mean—and here the reachable, that is already amended, so, that designated piece, I guess, a professional property manager would cost a lot of money or whatever. So, I agree, maybe that wouldn't be in, but other than that, I really like everything she has done. And when we look at the verification that notification letters be sent out to all property owners, I like the 300 feet because it's better to err on the side of caution. If somebody's too close and that you're still going to be notifying them as well, instead of going, "500, oh well, I didn't need to be notified because I'm only 300 feet away." But anyway, I really like that. I agree with her that we should make a clear statement about the "Private covenants prohibiting use of any unit as a short-term vacation rental shall not be invalidated by this chapter." There's no harm in putting that in there, but it makes it clear to just the regular lay people, who, in the communities, may want to challenge it if it's not in there because it's ambiguous and they say, "Hey, the County never say that." We know that the State law says you have to do this but like I said, it kind of prohibits them from wanting to challenge what we have as Page 15 PC -26 June 5, 2018 the County. So, I think putting it in there, I can ask Amy Self, there's no harm in having that in there, correct? MS. SELF: This is for? I'm sorry. MS. POINDEXTER: This is for Section—yeah, the CC&R's one. Section 2 of the bill, (b). MS. SELF: To leave the language in? MS. POINDEXTER: Yeah, to put it back, "Private covenants prohibiting use of any unit as a short-term vacation rentals shall not be invalidated by this chapter." There's no harm in having that in there. MS. SELF: No, you could leave it in. MS. POINDEXTER: I think that just makes it real clear and so, I like that because people who are in the private subdivisions and private roads are just afraid of the liability on roads and everything that comes within the CC&R's, if it is written in the CC&R's. So, I don't see any harm in doing that. I actually like it being in there. So, thank you, Council Member O'Hara, I really like what you've done. Thank you, I yield at this time ACTING CHR. DAVID: Thank you, Ms. Poindexter. Go ahead, Ms. O'Hara. MS. O'HARA: I really appreciate the comments from my colleagues on this amendment, and I'm absolutely willing to work on it further and blend with the amendments that we just adopted from Ms. Lee Loy. I do, however, feel the need to provide some additional language in this bill for flexibility. So, if I rework it, there will be something to that extent. What we're seeing happening in Puna will prevent a lot of people who may wish to stay there and rebuild from ever considering doing short-term vacation rentals because of the grandfathering basis. And I think there needs to be recognition of natural disasters and that sort of thing that allows us to be a bit more flexible, and apply it to whatever districts are being impacted in that way. We have a volcano erupting in Puna right now, but it's also impacting other parts of the island and there are lots of other natural disasters that we are prone to that could affect other parts of the island, in the future. We don't have a crystal ball, we can't see forward, so, we don't want to restrict ourselves too thoroughly in this regard. I absolutely agree that this industry needs some level of regulation. I'm not opposed to that, but, I do want to try and see how we can include a little bit of flexibility here so that it doesn't hurt economic recovery after this event. So, I'm happy to tweak it further. If you want to postpone and work it into Ms. Lee Loy's amendments and see what we come up Page 16 PC -26 June 5, 2018 with, I guess that would be onto Draft 4. So, I am happy to do that provided I find enough time. I actuallyI'm sorry this bill did not arrive in your mailbox until this morning. I actually did this about two weeks ago. Things have been a little hectic in my office for all of us. When my staff hasn't been working, they've been helping people in the community or themselves move because we've all been impacted directly. I just lost a property in Kapoho, as did Mr. Kim I believe. So, we've all been impacted. It's been pretty much a 24/7 situation since this began on May 3rd for me and my office staff So, I apologize that it didn't get to you until very late. I wasn't even aware it wasn't numbered until this yesterday morning. So, sorry. Anyhow, willing to work on it further. Thank you. ACTING CHR. DAVID: Thank you, Mr. O'Hara. Ms. Lee Loy. MS. LEE LOY: Thank you, Chair. I think we've provided Ms. O'Hara with a lot of the guidance on the stuff that we liked and we didn't like, but I would also like to use this opportunity to encourage Ms. O'Hara to look at the OHA (Office of Hawaiian Affairs) letter that came to us. It also provided what I think is some really good refining language, and if you could mash it all together in one more amendment, I would support that at this time. It sounds like we're going to kind of defer for one more meeting. That's my position right now. Thank you. ACTING CHR. DAVID: Thank you, Ms. Lee Loy. Ms. Eoff. MS. EOFF: Okay, thank you. I was just going to agree that there was some great language that the OHA testimony contained and I think we're headed into a good direction. I just want to make sure that Ms. O'Hara would work with, because you can't speak to us since it would be a Sunshine Law problem, but if she could work with Mr. Yee and Mr. Arai. I believe they have the background and they've already debated among themselves certain can and cannot do things that I think would be—so that what Ms. O'Hara brings forward is something that has consensus from the, or as much as possible, from the department too. I think that would really help us to be able to adopt the amendments next time. So, I would encourage that. I know everybody is busy and if it takes longer, so be it, but I think we should really be careful how we craft the language into the new amendment. Thank you. ACTING CHR. DAVID: Thank you, Ms. Eoff. Ms. Ruggles. MS. RUGGLES: Thank you. I just had a question. I realizedso, if this bill is going to require that every vacation rental have a professional property manager license in the State of Hawaii—does your amendment require this? MS. O'HARA: May I answer, Chair? Page 17 PC -26 June 5, 2018 ACTING CHR. DAVID: Yes, you may. MS. O'HARA: To my knowledge, and I think it's been brought up, this is a real dstate law requirement. If someone is managing more than one property, they have to have a broker's license. So, that's State law. MS. RUGGLES: Okay, and that one property, does that include their residence too? MS. O'HARA: Well, this bill doesn't impact anyone who is living on-site, remember? MS. RUGGLES: Yes, I know, I'm just wondering would this require every vacation rental from now on to have a property manager? Or is that already written within State law? That's what you're saying? MS. O'HARA: That's what I'm saying. If they're managing more than one property, it is a requirement by State law that they have to have a broker's license. MS. RUGGLES: More than one property? So, for people with just one vacation rental, they wouldn't be required? MS. O'HARA: Well, the State law does not require them, and we can fashion this so it reflects what her amendment came up with, in terms of reachable and also what State law already says. And I appreciate what Ms. Poindexter said earlier about leaving in the CC&R piece for clarity because while we sit here and think about writing these laws and rules for our departments to administer, we have to understand that the public is also reading them and trying to comply. So, adding more clarity always helps, is my opinion. Thank you. MS. RUGGLES: So, is it your intent to require every vacation rental to have a professional property manager? MS. O'HARA: Personally, I'm a little uncomfortable with the idea that somebody's yard service could be the contact person. You can get into problems with that. There is an advantage to having professional services, but I'm perfectly happy to back it off to what State law currently requires, which is anybody that's managing more than one property. So, I'm happy to do that. MS. RUGGLES: What sparked this in me was, I was just wondering what it requires to be a professional property manager licensed in the State of Hawai'i? MS. O'HARA: You have to get a real estate license and I think hold that for two years to get your broker's license, basically. Page 18 PC -26 June 5, 2018 MS. RUGGLES: Okay. MS. O'HARA: Most people go through a training course to take the test to become a realtor. It takes some investment of time and money. MS. RUGGLES: So, it would have to be quite an effort for everyone with a vacation rental to have— MS. O'HARA: Well, there are existing property management firms, whether they will be in existence in my district, in our district, down the road here, it's all questionable. But, many of them are large enough that they're managing rentals outside of just the Puna district. I recognize that there are professional property management firms on island. MS. RUGGLES: Yes, I know. I was just wondering if this is one thing that we're going to be requiring of everybody from now on. It's important to understand what we're requiring from everyone. Okay, with that, I'll yield. Thank you. ACTING CHR. DAVID: Thank you, Ms. Ruggles. Mr. Richards, go ahead. MR. RICHARDS: I think I'll just weigh in on that real quick. I think what the whole intent is, the good neighbor policy, that's the intent. So, I appreciate what Ms. Ruggles is talking about, but, with a good neighbor, and if we have the metrics of before allowing, we check with the neighbors, are we being a good neighbor, number one. If we decide we are being a good neighbor, for a small entity managing just an `ohana house or whatever the case may be, we don't need that. I appreciate what Ms. O'Hara is saying, but that being said, we'll price this out of line for people trying to make ends meet if they're just managing a small and for a short term. If you're bigger, then obviously, you need something professional, so we don't run into the bad neighbor. So, I think the intent is there and the language is getting better to address that. I hear what you're saying because I agree, I think about that one person we have in Waikoloa. If she was required to have one, it wouldn't work for her and she'd sell her house and leave because she couldn't afford to stay here. So, I am mindful of that, but I like the direction. I yield. ACTING CHR. DAVID: Thank you, Mr. Richards. Ms. Lee Loy. MS. LEE LOY: Thank you for that questioning, Ms. Ruggles, because there is a licensing fee that goes with this designated contact person. So, you're absolutely right, it actually does add to the cost, especially if they're just the one. But, I do want to reflect a little bit on what Mayor Kim addressed, is that we need to start preserving our neighborhoods again. That is the true impetus of this bill, is we Page 19 PC -26 June 5, 2018 are losing our residential communities to a business. So, I really think we are getting close and I really appreciate everybody's input, but we need to start really taking a look at the impacts on what this market is doing for people to stay home and live at home. So, I'll be more than willing to work with Ms. O'Hara and listen to and bring back some of the feedback and then take that to our Planning Director, Amy Self, and Roy, and maybe come forward with something that's palatable to everybody. Ms. Ruggles also mentioned something about the certificate, providing proof of the General Excise license. What does that look like? I think Mr. Takemoto touched on that a little bit also is that he could already check with the State Taxation Office, if there is a certificate of good standing or something already out there that we could just nicely dovetail into this, that's the expectation. You provide that certificate of good standing from the Taxation Office as evidence that you are paying your GE and your TAT. So, I think there is a lot of good stuff here and I'm willing to work with Ms. O'Hara and the rest of the administration. Thank you. ACTING CHR. DAVID: Thank you, Ms. Lee Loy. Anyone else before we wind things down? Okay. I would like to just say my comments. I really thank Ms. O'Hara and Ms. Lee Loy also because I sense that this is becoming such a great piece of legislation because of the time that this body is spending, as well as the administration, and getting to the point where I believe Mayor Kim wants us to be and we should be. So, thank you very much. I do like the CC&R staying in. I think it makes it clear. The verification, I prefer maybe 300 feet as opposed to 500 feet, Director. I'm just thinking it in terms of a football field, right? Yeah, right. Okay. So, 300 is good for me. I like the scale, the fee schedule scale because I think that's a fair way of approaching this. Other than that, thank you, Ms. Lee Loy and thank you, Ms. O'Hara, for continuing to work on this and I really believe that by the time we send this to the Planning Commission, you guys might not have that much to work with, or work on, hopefully. Mr. Richards? MR. RICHARDS: Can I just make one quick comment? ACTING CHR. DAVID: Sure MR. RICHARDS: I've read the testimony for some other ideas. Some ideas are in there. I thought they were really good ideas. ACTING CHR. DAVID: Right. There were great testimonies that we received from the community. Okay, given that, Mr. Clerk, I believeI'm sorry. Mr. Kanuha. Page 20 PC -26 June 5, 2018 MR. KANUHA: Hopefully, we can get this moving forward. So, I appreciate everybody's comments. You know, the private covenants we took it out because it was confusing people. So, I mean it goes both ways. There was a lot of people we talked to that was confusing, which is why we took it out, but, it doesn't make—it's fine if it's in there. I'm really going to have to talk to Planning as well on how these amendments will impact the bill. So, I look forward to that. I don't know exactly right now how it's going to all play out, but, I'm glad to postpone it and hear it the next time. Even how the levels of how much you pay for the annual renewal, I don't know how that's all going to play out. I mean the whole impetus was the non -conforming. We're saying that this isn't allowed in these areas. So, I will just head in that direction in how we determine how much these fees are going to be. So, I'll say that, but again, I appreciate the conversation and appreciate everybody taking the time to amend it and move forward with that. I just hope that we can move forward with it at some point. So again, mahalo, everybody for your conversations and debate. I'll yield. ACTING CHR. DAVID: Thank you, Mr. Kanuha. Ms. Eoff, if you want to make the motion to postponement. Okay, before you do that, I have one question for Ms. O'Hara. Ms. O'Hara, when we first started this discussion, I just was curious that you mentioned there were about 1,000 vacation rentals destroyed? Where does that data come from? I mean given the fact that there's a hundred and seventy some odd homes that were taken by the lava, I'm just wondering what the data of those numbers were because that's a huge amount? MS. O'HARA: Good question. In the data that Stefan, who is with us here in the Council, and I don't know if you want to come forward, gave us, he identified about 1,000 rentals in the Puna district. A number of weeks ago, I don't know when the request was made by the administration to cease all vacation rentals in that affected area and that area actually extended beyond Puna ACTING CHR. DAVID: Beyond Puna? I see. Okay, that's what I wanted to clarify because— MS. O'HARA: Not all of them have been destroyed, but given the impact that we've seen already, I can't give you a number as to how many have been destroyed. That number of homes, I'm sorry, but I've got to tell you that is not an accurate number. I don't know if that is just permitted structures but Puna is well known to have quite a few unpermitted structures, especially on the lava zone one where it's very difficult to get insurance and the number of residence that have been destroyed is predicted to be above 300 at this point. Page 21 PC -26 June 5, 2018 ACTING CHR. DAVID: I see. Okay, I was curious because it did seem very substantial as far as that number. Okay, I will now entertain a motion to postpone to our next Council meeting. What date would that be? Vote on Motion to Mr. Kanuha moved to postpone Bill 108, as amended to Postpone: Draft 3, to June 18, 2018. Seconded by Mr. Richards and (Approved) carried by the following voice vote: Ayes: Committee Members Chung, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Acting Chair David – 8. Noes: None. Absent: Committee Member Eoff – 1. Excused: None. ACTING CHR. DAVID: I believe that takes care of—thank you, sir. ADJOURN- There being no further business, at 11:23 a.m., Mr. Kanuha moved to adjourn the MENT: meeting. Seconded by Ms. Lee Loy and carried by the following voice vote: Approved: r Ms. Mai Biros Planning Committee MMD/j m Ayes: Committee Members Chung, Eoff, Kanuha, Lee Loy, O'Hara, Poindexter, Richards, Ruggles, and Acting Chair David – 9. Noes: None. Absent: None. Excused: None. ACTING CHR. DAVID: Alright, we are now adjourned. Thank you, everybody. Acting Chair (Date) Page 22