HomeMy WebLinkAboutCOM 0739.223 2016-2018, Y'CLERK
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Eric W Gill, Financial Secretary -Treasurer Gemrna G_ Weinstein, President Godfrey Maeshiro, Senior Vice -President
Friday, July 6, 2018
Committee on Planning
County Council - County of Hawaii
25 Aupuni Street, Hilo HI 96720
Re: Testimony on Bill 108 relating to short-term vacation rentals
Aloha Chair Eoff, Vice Chair O'hara and Committee Members,
UNITE HERE Local 5, a local labor organization representing 11,000 hotel, health care
and food service workers throughout Hawaii, would like to offer comments relating to
Bill 108 and offer a few suggested amendments specific to hosting platforms for your
consideration.
First, we would like to thank you and your Committee for continuing the process of
addressing the issue of short-term vacation rentals and their impact on our local people.
Each month an estimated average of 399 new vacation rentals get listed online
somewhere in Hawai'i, and an estimated 40,000 homes statewide will soon be used as
vacation rentals.
As a result of the growing concern over the loss of housing, jobs an'd the preservation of
local neighborhoods, sensible legislation in San Francisco, Santa Monica and in places
like Los Angeles — even here in Hawaii - have all moved towards including clear
requirements for transparency by hosting platforms. Some cities around the world
have even gone as far as to ban the operation of companies like AirBnb at least
momentarily — to address their community needs.
When the regulation of hosting platforms are not addressed in legislation, the ability for
local municipalities to curb illegal activity only becomes more difficult. because the vast
majority of short-term vacation rentals are offered through such platforms like AirBnb,
VRBO, HomeAway, etc. Enforcement will be impossible if the County does not compel
platforms to share their data so that real accountability can take place. For instance,
and regarding the section in Bill 108 on "prima facie evidence" - while it may sound
good. It doesn't account for what we know and have seen across the country. The
advertisement may not show the address so how will it be proven that it's being used as
a STR? ^4A�
Corn. No. 1
Ref. To: G 1
Date JU L,L
1516 South King Street, Honolulu Hawaii 96826-1912 • 808-941-2141 • www.unitehere5.org
When the regulation of hosting platforms are not addressed, the negative impact on
our housing inventory only worsens because the majority of listings on platforms are for
entire homes. For example, a recent report by CBRE found that 81% of the revenue
generated on AirBnb was from hosts renting out entire home units.' While vacation
rentals offer supplemental income for some today, they are increasinglyZ becoming
unregulated, illegal businesses for owners of multiple properties.
When the regulation of hosting platforms,are not addressed, the County's ability to
properly plan for safety and disaster management becomes difficult — note the flooding
on Kauai and of course our own challenges here on the Big Island with the ongoing lava
flow. If platforms are not compelled to share their data, the County is at a disadvantage
in terms of its disaster preparedness. No one really knows who is staying where and
how many are staying at one location at any given point.
In fact, the lack of regulation on hosting platforms and the resulting unintended
consequences of laws that fail to compel hosting platforms to be transparent with their
data was one of the reasons Governor Ige vetoed HB 1850 in 2016 — a bill that AirBnb
attempted to sneak past us all. It would have pre-empted the Counties ability to pass
meaningful legislation at the local level while shielding all illegal operators by permitting
itself (AirBnb) to serve as a tax collector on behalf of its participating hosts.
While some may argue that tackling the issue of short-term vacation rentals is complex,
it doesn't have to be. It really doesn't; if we focus on effective enforcement first — and
that requires the regulation of hosting platforms like AirBnb, VRBO, HomeAway and
other rental services.
If we want to stop mini -hotels in our neighborhoods, then we must include the
regulation of hosting platforms now.
As a local boy, born and raised on the Hamakua Coast and whose family still resides on
the Big Island, I'm particularly proud of the work this Council has already done to
understand this issue. Here on the Big Island, Local 5 represents hundreds of working
people that work in our hotels and at Kasier clinics in Hilo, Kona and Kamuela.
As a local union, we have worked with officials on every county regarding this issue; and
as a union that represents nearly 250,000 service workers throughout North America,
we have worked in every major city (from Toronto to Santa Monica & Los Angeles) and
have helped pass practical legislation that addresses the proliferation of illegal short-
term rentals while still preserving our neighborhoods and housing inventory for locals.
Here in Hawai'i, we have spent the last four years heavily engaged at the State
Legislature and in the City & County of Honolulu, but have also worked closely with
thousands of community stakeholders, residents, and housing leaders statewide that
have helped us acquire a unique and valuable perspective of how to approach this issue.
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1516 South King Street, Honolulu Hawaii 96826-1912 • 808-941-2141 • www.unitehere5.org
We have come to the conclusion that the most essential component to any legislation
is ensuring that hosting platforms that advertise rental services, internet or otherwise,
file reports of the units they list. This has proven critical to any hope of any effective
enforcement regime. In other words, operators and hosting platforms must be
required to operate transparently by providing list of names and addresses of
operators to the County so that the County can verify compliance.
As such, we would kindly suggest that the following new section relating to "Records,"
"Hosting platform reports," and "Unpermitted rental of failure to submit reports
unlawful" be added to Bill 108 as a way of complementing the existing draft to ensure
that the intent and integrity of Bill 108 is preserved:
SECTION 2.
"Section 25-4- . Short-term vacation rentals.
(b) Registration of short-term vacation rentals.
(4) Records. All of the director's records of enforcement actions
taken under this section shall be open to the public for inspection
and copying without limitation or redaction."
"Section 25-4- .5. Hosting platform reports."
"Any hosting platform shall report to the director on a monthly basis, on
the date and in the electronic format specified by the director, the street
address of each listing on the platform of a short-term rental, bed and
breakfast home or transient vacation unit in the County, the names of the
persons responsible for each such listing, and the length of each stay and
the price paid in such a listing effectuated by or through the platform. All
such reports, except information about prices charged and taxes paid,
shall be records open to the public for inspection and copying by
neighbors of the rental who supply the address of the rental as a
condition of the inspection or copying."
"Section 25-4- .6. Unpermitted rental or failure to submit reports
unlawful." -
a) It shall be unlawful for anv person other than a hosting platform to
commit any of the following acts with respect to a short-term rental, bed
and breakfast home or transient vacation unit that is not a permitted use
under this chapter and does not have a nonconforming use certificate
under this chapter:
(1) Offer to rent a short-term rental, bed and breakfast home or
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1516 South King Street, Honolulu Hawaii 96826-1912 - 808-941-2141 - www.unitehere5.org
transient vacation unit;
(2) Accept in exchange fora short-term rental, rental of a bed and
breakfast home or transient vacation unit any money or other
thing of value, including any rent; fees, commissions, revenue-
sharing, rebates, refunds or other exchanges of value; or
3) Advertise rental of a short-term rental, bed and breakfast home
or transient vacation unit by any means including signs, print, or
electronic media.
b) It shall be unlawful for a hosting platform to commit any of the
following acts with respect to a short-term rental, bed and breakfast
home or transient vacation unit that is not a permitted use under this
chapter and does not have a nonconforming use certificate under this
chapter:
(1) Offer any goods or services, including without limitation
cleaning, insurance, catering, hotel or restaurant bookings, or
guide services; or
(2) Fail to file any report required by Section 25-4. "
The following definition would also need to be added below relating to "Hosting
platform":
SECTION 3. Chapter 25, article 1, Section 25-1-5, of Hawai'i County Code 1983
(2016 Edition, as amended), is amended by adding new definitions -to be
appropriately inserted and to read as follows:
""Hosting platform" means a marketplace in whatever form or format
which facilitates the rental of a short-term rental, bed and breakfast
home or transient vacation unit, through advertising, match -making or
any other means, using any medium of facilitation, if the operator of the
hosting platform derives revenues, including booking fees or advertising
revenues, from providing or maintaining the marketplace."
Thank you, and we kindly request that the amendments above be inserted into Bill 108
prior to submittal to the Planning Commissions.
As the process continues, we would also recommend that the Committee, Commission
and full Council look closely at other tools that could help ensure proper enforcement.
First, we would recommend the Council look closely 'at inserting the concept of "private
enforcement" as the best deterrent against the illegal proliferation of short-term
rentals. We have found that those most directly affected by illegal vacation rentals are
those living nearby. The language below would allow neighbors (living within 1000 feet
of an alleged illegal operation) to address the problem directly. The language has also
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1516 South King Street, Honolulu Hawaii 96826-1912 • 808-941-2141 - www.unitehere5.org
already been adopted by the Zoning Committee of the Honolulu City Council as
reflected in Res. 17-052, CD1 that would amend the City's zoning code:
"Section 25-4- .7. Private Enforcement."
"A neighbor may institute a civil action in any court of competent
jurisdiction against any person for violation of the provisions of this
chapter pertaining to short-term rentals, bed and breakfast homes and
transient vacation units and shall be entitled to all remedies available
under the law or in equity appropriate to remedy any such violation,
including but not limited to a fine equal to the gross amount paid by a
customer to rent a short-term rental, bed and breakfast home or
transient vacation unit, which shall be doubled if the violation is shown to
be willful. The department and the zoning board of appeals do not have
special competence in or primary jurisdiction over such violations and the
neighbor is not required to exhaust any administrative procedures before
instituting action. If the neighbor is the prevailing party in any legal action
taken pursuant to this section, the court shall award reasonable
attorneys' fees and costs as part of the costs recoverable. Any fine which
has not been satisfied in full within 90 days and has not been successfully
challenged by a timely writ of mandate shall constitute a lien against the
real property as to which the violation occurred and may be recorded,
provided that no such lien shall be imposed if the owner of the property
did not commit a violation of this chapter in connection with the rental
and the owner establishes that all phases of the rental, including
advertising, offer and exchange, took place without the owner's
knowledge. Due to the special competence of the department in
investigating and remedying violations of this chapter, no action under
this section may be brought until six months after the neighbor has filed a
complaint with the department against the person alleged to be in
violation of the provisions of this chapter pertaining to short-term
rentals. bed and breakfast homes and transient vacation units."
"'Neighbor" means any property owner or tenant all or any part of
whose principal residence is within a 1,000 -foot radius of real property
on which a short-term residential rental occurs."
Secondly, the definition of STR's should be tightened. As drafted, Bill 108 has no limit
on the number of days a unit may be used as an STR. That should be addressed moving
forward. The definition of STR limits it to five bedrooms but nothing in the draft states
that buildings with more than five bedrooms may not be rented on a short-term basis or
that they must be regulated like hotels.
Thirdly, Bill 108 has no requirement of owner occupation. If the owner resides in the
1516 South King Street, Honolulu Hawaii 96826-1912 • 808-941-2141 • www.unitehere5.org
same building, it is not even considered an STIR thus not regulated at all. Especially since
proving how much time the owner actually spends in the building is essentially
impossible, this means as long as the owner claims this as the legal residence, the
building is exempt no matter how many units it offers. These can be in the regulated
zones or, by implication, in any other zones since this ordinance would establish the
limits of municipal regulation of this type of property use. This is a very big loophole.
Finally, we would suggest including penalties such as disgorgement or injunctions in
addition to stiff fines to halt illegal activity and similar to language that already exists in
bills being considered by the Hawaii State Legislature.
Addressing the growth of illegal vacation rentals is crucial to achieving housing
affordability for our island residents. It is crucial in making sure we have a place to call
home.
Thank you.
1 "Hosts with Multiple Units — A Key Driver of Airbnb Growth," CBRE, March 2017. Page 4
states, "Based on data from Airdna, and for the period October 2015 to September 2016, over
416,000 hosts generated an estimated $5.7 billion in revenue through Airbnb in the United States,
which was a 140% increase in "revenue over the preceding 12 -month period. Of this $5.7 billion,
approximately 81 % was captured by hosts offering an entire- home unit, up from approximately
78% in the prior year." (emphasis added)
2 Based on "Hosts with Multiple Units — A Key Driver of Airbnb Grow`th," CBRE, March 2017.
For Oahu, the year over year growth in the total number of units listed on Airbnb was 92.5%. For
those listing multiple units, the growth was 124.6%, which is more than the average growth, and
more than the 77.0% growth of hosts who were not listing "Entire home" units. It also states on
page 6, "All markets realized an increase in the total number of units managed by multi -unit
hosts. Four markets shown in Figure 1 had a year -over -year growth rate of above 100%.
Nashville led the way with a 161% increase in units followed by Oahu (124%), New Orleans
(120%) and Seattle (102%). In New York and San Francisco, units managed by multi -unit hosts
only increased by about 35%, which is slightly higher than overall unit growth for these two
markets, leaving the share of units managed by multi -unit hosts relatively unchanged."
on
1516 South King Street, Honolulu Hawaii 96826-1912 • 808-941-2141 - www.unitehere5.org