HomeMy WebLinkAboutCOM 0739.319 2016-2018 p/pc,
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From: MATT HUBNER
To: Council Testimony
Cc: Chunu,Aaron;Lee Loy,Sue;Ohara,Eileen;Ruaoles,Jennifer;David,Maile; Kanuha,Dru;Eoff,Karen; Richards.
Tim; Poindexter,Valerie
Subject: Testimony for October 16,2018 Committee regarding Bill 108
Date: Monday,October 15,2018 7:48:07 AM
Dear Members of the Hawai'i County Council,
I am submitting my testimony on draft 5 of Bill 108. I am the owner of a whole-house
vacation rental in Volcano that would be subject to Bill 108. I continue to maintain that I am
not opposed to balanced regulation; however, I have concern that the council does not fully
comprehend the economic impacts and losses that are occurring as a result of the recent
eruption in lower Puna, Hurricane Lane and the total loss of tourism income island-wide in
addition to other areas of Puna. While I find some revisions to this draft moderately increase
the balance of this regulation, I do not believe that it should be enacted until and economicLI
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impact analysis can be conducted and that an independent third party be consulted to asses die =o
current status of vacation rentals on the island of Hawai'i.
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Regulation is necessary for a ruling body to address a problem that needs to be resolved forte
the benefit of the public as a whole. It is not objectively clear at this time if vacation rentals =I--
constitute
–constitute a problem on Hawai'i Island.The stated purpose of this Bill is as follows: 7,
The purpose of this ordinance is to manage the impacts of these short-term vacation rentals co —
by: 1) defining where this use will be allowed; 2) establishing provisions and standards to
regulate this use; and 3)providing an avenue for an existing use deemed to be improper by
this ordinance, to apply for a nonconforming use certificate that would allow them to
continue to operate in a non permitted district.
I would like to immediately point out that this purpose statement never elucidates what the
impact of STRs are. It is unclear what detriment STRs present to the County of Hawai'i as a
whole, which should be need that drives the purpose of island-wide regulation of businesses
that provide additional income and jobs, as well as higher property taxes to the County coffers.
I agree that defining the use is appropriate as there are a number of vocal opponents of STRs
that commonly refer to any vacation rental of a whole home "illegal". Such a definition would
clarify such matters if the regulation is clear and understandable. Providing sensible regulation
of STRs is also something I support, but the current draft describes inequitable standards to
regulate this use. I also support the proposal to grandfather in existing STRs that do not
conform to the proposed use with caveats that I will discuss further below.
As I have submitted in previous testimony, I have researched listings on VRBO to evaluate the
breakdown of property types in districts and zones, and the majority of listed STRs are condos
and villas in resort areas that do not or would not impact local housing (I am including a copy
of my findings with this testimony). A large percentage of the whole home house rentals that
would be the primary target of this bill are or were located in the Puna district. As you all are
aware, many of those homes have been destroyed or are severely impacted by the eruption.
The remaining bulk of whole home rental properties that would be affected are on the Kona
side,primarily in North Kona and South Kohala. I maintain that proceeding with adoption of
this regulation while the economic impacts of this disaster are unclear is unfair to the people of
Puna who will significantly carry much of the burden presented by this regulation.
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While I maintain and strongly suggest that this regulation be voted down, my specific
comments and recommendations with Draft 5 of this bill are bulleted below:
• Section 25-4(a)(1)(B): This provision has been amended to address the oversight of
residential properties that are located in General Plan Resort and Resort Node areas that
would've been adversely affected by this Bill. This revision points out the inherent
dangers of this regulation without an economic impact analysis and a comprehensive
study of the vacation rental industry on the Island of Hawai'i. Volcano is host to
millions of visitors annually who seek to stay nearby. Puna does not have the hotel-class
accommodations infrastructure and zoning for such infrastructure to house the
percentage of visitors that wish to stay close to the Park(The island's top visitor draw).
Vacation Rentals have filled that niche for decades, and this bill would adversely affect
the properties that currently allow visitors to remain close to the National Park. Prior to
enacting regulation, I recommend that the Council seek to revise the General Plan to
include a special designation to the Volcano and other special interest areas of Puna that
would allow residential and agricultural properties in the area to be considered similarly
as these residential properties in this revised provision.
• Section 25-4(a)(3): I recommend that this regulation be held until the issue of existing
STRs on state land use agricultural districts be addressed at the state level. As this bill is
currently written, existing rentals on such lands will not be allowed to procure a
nonconforming permit, and will be forced to close business. This is an unfair proposal to
those that will be harmed by this regulation, and offer them no recourse to dispute such
action.
• Section 25-4(b)(1) & (2): I have recommended that if all STRs are a problem, then all
should be required to pay equitable fees or none at all. This revision to require all STRs
to pay a $500 registration fee provides a modicum of equity; however, nonconforming
use permit holders must still pay an arbitrary renewal fee of$250, while those in
permissible zones will not be required to do such. This may constitute an act of
discrimination considering planning counsel noted during the Windward Planning
Commission meeting that existing STRs in some zones, such as Residential or
Agricultural Zoning have been operating legally in the absence of zoning definitions and
restrictions relating to the permissibility of STRs in such areas. Some of these rentals
have been in existence as long as the rentals in what this regulation defines as
permissible zones. Forcing one set of rentals to pay an annual renewal while not
obligating the others is an act of discrimination and could be a potential civil liability of
this regulation. I recommend that the council amend this provision so that all registered
STRs, regardless of zoning,pay a reduced registration(or nonconforming)permit
renewal fee, or the renewal fee be struck entirely for nonconforming permits. I further
recommend that the initial registration fee for all STRs, regardless of zoning, be reduced
back to the previous draft's $250. If the goal of such fees are to ensure enforcement of
STRs, even those in permissible zones will be subject to enforcement and as such
should share the enforcement burden.
• Section 25-4(b)(3): This section is worrisome in that it appears to require that the
building division affirm that all registrants have building, electrical and plumbing
permits in place prior to the 180 day deadline provided in this regulation. Is the building
division prepared to handle this workload, and will extensions be provided to those
applicants who have not been assessed prior to the 180 day deadline? I recommend that
if this regulation move forward, there be provisions put in place for extensions due to
administrative constraints.
• Section 25-4(b)(4)(C): It is unclear in this provision if site plans from the current
County of Hawai'i Tax Assessor's website will suffice as evidence, or if owners, at their
own expense,will be required to provide new documentation. I recommend this
provision be further clarified.
• Section 25-4(b)(4)(D): I recommend that this provision be struck as it could provide an
avenue for ungrounded complaints from those that have been provoked by the heated
discourse of this bill. False complaints could,without adequate investigation, lead to the
revocation of one's registration/permit and the financial and resource burden of
disputing such an action is very cumbersome. If such a revision is to be included, I
recommend that this provision be revised to only include notification to adjacent
property owners to the vacation rental property versus an arbitrary 300 feet, which
would be cumbersome. I further recommend that the Planning Department develop a
standard format letter for registrants or permit applicants to provide for consistency.
• Section 25-4(b)(6): I support that change in ownership will allow registration to
continue; however, it is unclear if this provision will allow for the continuation of a
nonconforming permit following a change in ownership. I recommend that
nonconforming permits be explicitly included in this provision.
• Section 24-4.1(c)(2)(B): This section implies that if a nonconforming certificate holder
fails to pay their renewal (a County fee) on time (see 24-1.1(d)(4)(A) & (C),they will be
subject to revocation of their permit. As this regulation currently reads, it appears that it
will be solely up to the owner to know the expiration date and make the payment on
time. I first recommend that the Planning Department issue a letter no more than one
month prior to the permit expiration date reminding the owner of payment. Secondly, I
propose that the regulation be amended to allow a grace period (with possible late fee) if
the registration payment is not received on or before the expiration deadline. If
processing is delayed by administrative delays, there should be no penalty and the
permit should not be subject to revocation. If a permit is revoked under the afore
mentioned administrative causes, the owner should be reimbursed any fees associated
with disputing the action should they successfully dispute the revocation.
• Section 24-1.1(d): See comments above about renewal deadlines and grace periods.
• Section 24-4-1(e): As noted in my opening statement, I recommend that this regulation
be held until issues regarding existing STRs on state land use agricultural districts can
be resolved at the state-level. Denying permits to existing STR operators would inflict
harm on those property owners and provide them no immediate recourse to dispute the
action.
• Section 24-4-1(0: The appeals process outlined is derived from major zoning
amendments and variances authorized by the Director as outlined in the Hawai'i County
Zoning Code (Sections 25-2-20). It should be made clear in the Bill that an appeal
requires a $250 filing fee. An additional financial burden placed on the property owner.
• Section 25-4.3: I recommend that Bill 108 require funds collected from registrations be
used in addition to enforcement to establish an independent third party to objectively
evaluate the status of vacation rentals and their economic impact on Hawai'i Island,
which can then be used to inform future action by the Council.
I further recommend that Bill 108:
• As this Bill appears to be driven by public outcry in specific communities in Hilo and
the Kona area, I propose that the Bill afford districts flexibility to individually outline
how STRs are regulated at their level, especially those not in appropriately-zoned areas
(i.e Puna has no Resort District that would allow STR owners to simply register their
property).
• Establish a method for allowing new nonconforming use certificates to be issued and do
not implement a moratorium on new STRs requiring nonconforming use certificates. I
understand that the moratorium is part of Bill 108 in order to allow the Council time to
"hit the pause button" and evaluate the situation. If the Council decides that it is
absolutely necessary to implement a moratorium in order to allow time for adequate
evaluation, I suggest that a sunset date for the moratorium be established and be in place
no longer than a calendar year after the Bill's adoption. This would ensure that the
Council takes up the matter of evaluating the issue in a timely manner and be held
accountable for doing so.
Mahalo for the opportunity to provide testimony.
Aloha,
Matt Hubner
Volcano