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HomeMy WebLinkAboutCOM 0739.196 2016-2018Hilton Testimony re Bill 108 Submitted via e-mail: counciltestimony@hawaiicounty.gov Committee on Planning Tuesday, July 10, 2018 10:30 a.m. Aarriotf INTERNATIONAL r~° 20C pi t3 .C) Dear Chair Eoff and Members of the Planning Committee:,, C We support legislation that helps curb illegal hotels and manage the impact of short-term rentals on local "communities. However, we cannot support Bill 108 in its current form as it fails to include necessary provisions that would ensure limitations on commercial operators and promote data transparency and accountability. We respectfully request that the Planning Committee consider the proposed amendments enclosed with this letter, which are based in part on State HB 2605 HD 2, SD 2, the San Francisco model, and legislation currently pending in New York City. The Hawaii County Planning Department testified in support of measures similar to HB 2605 during the last State legislative session, including SB 2963, stating that such measures would support the County's eventual enforcement of illegal vacation units. The proposed amendments are necessary in order to ensure that Hawaii County's communities and neighborhoods remain healthy for local residents, including many hotel employees, and to ensure that short-term vacation rentals comply with state and local laws. Background — HB 2605, the San Francisco Model, and the New York City Legislation HB 2605 HD 2, SD 2 (introduced in the last State legislative session) establishes a framework for registration, reporting, data transparency, and enforcement based, in part, on San Francisco's Ordinance 178-16. Among other things, HB 2605 would have made it illegal for hosting platforms to collect booking fees on illegal short-term rentals and/or to "engage in business" with property managers or activity providers in violation of state or county law. San Francisco Ordinance 178-16 (effective September 1, 2016) made it a misdemeanor for hosting platforms to collect booking fees on illegal short-term rentals. The San Francisco model has withstood legal challenges by Airbnb and Homeaway because it holds hosting platforms responsible only for their own conduct and participation in illegal activities. San Francisco and Airbnb ultimately entered into a settlement agreement regarding compliance with Ordinance 178- 16, under which, among other things, Airbnb agreed to provide monthly reporting of all Airbnb listings in San Francisco. Legislation currently pending before the New York City Council (Int. No. 981) would also require monthly reporting. Under the proposed law, hosting platforms that accept fees in connection with providing booking services must provide the address of the short-term rental units for which fees were collected, the name and address of the person offering the unit, and any other information that may be required by the City's enforcement division, as well obtain the Ca ar. No. 1 11 (0 Ref® T®o 1PC• -- Ref. Date- JUL 10 2 -� r consent of the person offering the unit to the release of the required information. Hosting platforms that fail to comply would be subject to a civil penalty of $5,000-$25,000 per unit. Elements of each of these comprehensive proposals are included in the attached proposed amendments, and we encourage their adoption in Hawaii County. Residents of Hawaii County Deserve As Much Respect for Their Communities and Local Laws as the Residents of San Francisco and New York City A Reuters interview with Airbnb's Chief Executive Officer, Brian Chesky,l, earlier this year describes Airbnb's acceptance of responsibility for the impacts its business has on neighborhoods and housing markets. The interview concluded by saying that Airbnb is coming to terms with its responsibility. In its settlement with San Francisco, Airbnb voluntarily agreed to a number of requirements related to registration, data reporting, and transparency, as well as mandatory verification of compliance and delisting of illegal units. Hosting platforms, including Airbnb, should also take responsibility for their impacts in Hawaii. The residents of Hawaii County deserve as much respect for their communities and local laws as the residents of San Francisco and New York City. Thank you for your consideration. Mahalo nui loa, .�`/ �✓/ per , Gerard C. Gibson Area Vice President Hilton Hawaii Chris Tatum Area General Manager Waikiki Beach Marriott Resort Enclosure ' See https://www.reuters.com/article/us-airbnb-expansion-chesky/airbnb-ceo-pledges-to-take-more- responsibility-for-impact-to-housing-idUSKCN 1 G708C Proposed Amendments to Bill 108 Based on HB 2605, the San Francisco Model, and the New York City Legislation The following key elements, based in part on HB 2605 HD 2, SD 2, the San Francisco model, and New York City legislation should be incorporated into short-term rental legislation at the County level to strengthen enforcement: 1. Prohibition on hosting platforms collecting booking fees on illegal rentals and engaging in business with operators or other persons or entities providing property management or activities services in violation of state or county laws. Sample language based on HB 2605 and San Francisco model: § -1 Definitions. As used in this chapter.- "Activity hapter:"Activity provider " means an individual, firm, corporation, association, partnership, or any group of persons, whether incorporated or not, which provides specialized air, land, or sea tour excursions and activities, but does not mean sellers of airline coupons or tickets. "Bed and breakfast establishment" has the same meaning as in section 25-1-5. "Booking service " means any reservation or payment service provided by a person or entity that facilitates a transient vacation rental transaction between a transient vacation rental operator and a prospective renter, and for which the person or entity collects or receives, directly or indirectly, through an agent or intermediary, a fee in connection with the reservation or payment services provided for the transient vacation rental transaction. "County" means the County of Honolulu. "Hosting platform" means a person or entity that participates in the transient vacation rental business by providing, and collecting or receiving a fee for, booking services through which a transient vacation rental operator may offer a short-term vacation rental or bed and breakfast establishment. Hosting platforms usually, though not necessarily, provide booking services through an online platform that allows a transient vacation rental operator to advertise the transient vacation rental through a website provided by the hosting platform, and the hosting platform conducts a transaction by which potential renters arrange use and pay, whether the renter pays rent directly to the transient vacation rental operator or to the hosting platform. "Short-term vacation rental" has the same meaning as in section [25-1-5]. "Transient vacation rental" means "short-term vacation rental" or "bed and breakfast establishment. " "Transient vacation rental operator" means any person operating a short-term vacation rental or bed and breakfast establishment, whether as owner or proprietor, or as lessee, sublessee, mortgagee in possession, licensee, or other, or engaging or continuing in any service business that involves the actual furnishing of a short-term vacation rental or bed and breakfast establishment. § -2 Prohibition on participation in illegal activities by hosting platforms. (a) Booking Services. It shall be unlawful for a person acting as, or on behalf of, a hosting platform to provide, and collect a fee for, booking services in connection with transient vacation rentals located in the county if those transient vacation rentals are not lawfully certified, registered, or permitted as a short-term vacation rental or bed and breakfast establishment at the time the transient vacation rental is rented. (b) Property Manygement and Activity Providers. (i) It shall be unlawful for a person acting as, or on behalf of, a hosting platform to engage in business with a transient vacation rental operator, including any person or entity employed, contracted, or otherwise engaged by the transient vacation rental operator for property management or as an activity provider, who is not in compliance with all state laws and county ordinances, including any laws and ordinances regarding land use, taxes, and professional licenses. (ii) It shall be unlawful for a person acting as, or on behalf of, a hosting platform, to act on behalf of a transient vacation rental operator, to employ, contract, or otherwise engage in business with any person or entity to manage any property of the transient vacation rental operator or to act as an activity provider for transients served by the operator if the person or entity is not in compliance with all state laws and county ordinances, including laws and ordinances regarding land use, taxes, and professional licenses. § -3 Penalties. A violation of this chapter shall result in a civil penalty of not less than $25,000. § -4 Enforcement. The director or other appropriate official designated by the director shall enforce this section. 2. Delisting and advertising requirements for short-term rental operators. Sample language based on HB 2605 model (which reflected input from the State Attorney General's office): When conducting business with a transient vacation rental operator with respect to a property for lease or rent, a hosting platform.- (1) latform:(1) Shall notify the transient vacation rental operator that the subject property is required to be in compliance with applicable state and county land use laws and ordinances prior to retaining the services of the hosting platform; (2) Shall require the transient vacation rental operator to provide the hosting platform with the transient vacation rental operator's transient accommodations tax number, County registration number or non -conforming use certificate number, and local contact information and shall notify the transient vacation rental operator that this information is required in advertisements for short-term vacation rentals and bed and breakfast establishments under section [25-4-_(c) (3)J; (3) Shall require the transient vacation rental operator to provide the hosting platform with verification of compliance with state and county land use laws in the form of a written certification, verification, or permit, as applicable, issued by the planning department; and (4) Shall require the transient vacation rental operator to provide a statement to the hosting platform confirming compliance with all applicable land use laws and ordinances. A transient vacation rental operator shall remove any advertisement published through the hosting platform, including an online advertisement, for a short-term vacation rental or bed and breakfast establishment located in the county for which the transient vacation rental operator fails to comply with paragraph (2), (3), or (4) or for which the transient vacation rental operator has received written notice from a state or county governmental authority that the property is not in compliance with state law or county ordinance, as applicable. The state or county governmental authority shall provide a copy of the written notice to the hosting platform. A violation of this section shall result in a civil penalty of not less than $25, 000. The director or other appropriate official designated by the director shall enforce this section. 3. Regular reporting requirements. Sample language based on pending New York City legislation (Int. No. 981): § -1 Definitions "Bed and breakfast establishment" has the same meaning as in section 25-1-5. "Booking service" has the same meaning as section [ - 11. "Dwelling unit" has the same meaning as in section 25-1-5. "Hosting platform" has the same meaning as Section [ - 1]. "Short-term vacation rental" has the same meaning as in section [25-1-5]. § -2 Reporting requirements for hosting platforms providing booking services for short-term vacation rentals and bed and breakfast establishments. A hosting platform shall: (1) Submit to the planning department or such other department as may be designated by the mayor, on a monthly basis, in a time and manner established by such department, including but not limited to, electronically, a report of transactions during the preceding month relating to the receipt of payments, either directly or indirectly, regarding listings or advertisements for short-term vacation rentals and bed and breakfast establishments located within the county. Where a payment is for more than one listing or advertisement, each such listing or advertisement is considered to be a separate transaction. Such report shall include the following information for each dwelling unit subject to the report: (a) The address of the dwelling unit, including the unit or apartment number; (b) The name and address of the person offering the dwelling unit for rent,- (c) ent;(c) The individualized name or number of each such advertisement or listing connected to such dwelling unit and the uniform resource locator (URL) for each such listing or advertisement, where applicable; (d) A statement of whether (i) such booking services will be provided in connection with a bed and breakfast establishment or (ii) short-term vacation rental, and (ii) if such booking services are being provided in connection with a short-term vacation rental, whether such rental is (A) of the entire dwelling unit, (B) of a portion, but not all, of the dwelling unit, and/or (C) a "hosted" rental of all or a portion of the dwelling unit, meaning that the owner or lawful lessee of the dwelling unit under a lease for a term of more than 30 days will continue to occupy the dwelling unit for the duration of the short- term vacation rental; and (e) Such other information as may be required by rules promulgated by such department; and (2) Obtain lawful consent from the person offering such dwelling unit to provide the information described in paragraph 1 to such department. § -3 Penalties. A hosting platform that violates section [ -2] shall be liable for a civil penalty of no less than $5, 000 and no more than $25, 000 for each such dwelling unit. § -4 Enforcement. The director or other appropriate official designated by the director shall enforce this section. 4. Cap on number of nights allowed for unhosted units. Sample languagebased on San Francisco law limitiniz unhosted rentals): Short-term vacation rental use shall not exceed ninety (90) calendar days total per year for each short-term vacation rental in the county.