HomeMy WebLinkAboutCOM 0739.379 2016-2018 COUNTY CLERIC CO 1M -15Ct
COUNTY OF RAWAI'I
RECEIVED
From: Em Mooter Time L:OL(p, By •.
To: Council Testimony Date (I j l/l$
Subject: Bill 108
Date: Thursday,November 01,2018 12:04:01 PM
Center For Democracy
Re: Bill Number 108
Hearing: November 2, 2018
Dear Council Members:
While much work has been down on this Bill,we respectfully request that you consider the following.
This bill is a regulation on nonresidents only. As a result,it treats instate and out of state interests differently. The
county's goal is to regulate short term vacation rentals,which is the economic activity of renting for less than 30
days. However,rather than regulating this activity,whether it be conducted by instate or out of state owners,the
Bill instead is a regulation placed upon who is conducting the activity, not the activity itself. Federal law is clear,
that when a governmental agency places burdens on some but not all,it is highly probable under judicial review to
be deemed discriminatory.
Thus this Bill does not conform to Article IV,Section 2,(Privileges and Immunities Clause),the Equal Protection
Clause of the Fourteenth Amendment(Equal Protection Clause)and Article I,Section 8(Commerce Clause)of the
Constitution of the United States.
The Constitution provides that"Citizens of each State shall be entitled to all Privileges and Immunities of Citizens
of the several States." The United State Supreme Court has found that"one of the privileges which the Clause
guarantees to citizens of State A is that of doing business in State B on terms of substantial equality with the citizens
of that State." Bill 108 clearly places burdens and fees on nonresidents that it is not placing on residents. This Bill
will violate the Constitutional guarantee of doing business on terms equal to residents.
The Equal Protection Clause provides that"no State(or other governmental entity)shall ...deny to any person
within its jurisdiction the equal protection of the laws." Government has a responsibility to create laws that provide
equally for"any person within its jurisdiction" it does not permit separate laws based upon residency.
The Commerce Clause provides for protections against discrimination of interstate commerce. As the Hawaii
Supreme Court found in Barber v State of Hawaii: "As we use the term here, "discrimination"simply means
differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the
latter. If a restriction on commerce is discriminatory, it is virtually per se invalid." (emphasis added.)
The Constitution,Federal law,US Supreme Court and the Hawaii Supreme Court have all consistently provided the
same definition of discrimination. If the County of Hawaii's goal is to regulation short term vacation rental it needs
to do just that-i.e.the activity of short term renting. However,this Bill regulates WHO must be subject to the
regulations. Some owners are,some owners are not.
How does this Bill treat resident and nonresidents differently? •
Residents need not comply with: Registration,nonconforming use permit,notification of neighbors,noise
restrictions. Unlike nonresidents,they may short term rent in any zone,at any time,up to 5 bedrooms. They are not
subject to neighbors'complains denying them ability to continue to rent. They need not pay$500 to register. They
do not submit house plans of bedrooms, parking plans,final approvals for building,electrical and plumbing
permits. They are not subject to annual renewal process and$250. They do not need to put a registration number in
advertising. They are not subject to being prevented from renting due to delinquent payment of GET,TAT,county
property taxes,fees,fines or penalties.
The vast majority of zoned(conforming)short term rentals will take place in resort areas. These areas are generally
Comm. No.IN'31C1
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Ref. Dote
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in private communities where the streets and parking takes place on the communities privately owned property-it is
not on public streets. These communities have their own regulations for parking and noise and"good neighbor
behavior." As set forth in this Bill,those private communities existing Home Owners regulations may or may not
conform to this Bill. This Bill dictates terms of use that may conflict with the By-Laws of these privately owned
communities.
The fee of$500 is excessive for the following reasons:
1. Only nonresidents pay it.
2. Owners who are already in resort areas would now be required to pay a$500 fee to conduct the activity they are
already zoned to do.
3. At$500 it is higher than many other types of businesses. For example,hotels and condo hotels do not pay a
registration fee to the county. Zero compared to$500 is excessive,especially when an owner is renting to a few
guests,not a hotel full.
4. For comparison, many of the condominiums that individuals will be renting their units in also allow for a condo
hotel to operate. So one individual,already in a resort zone,would have to pay$500 to the county of Hawaii to rent
their one unit,however,a condo hotel operator who may be renting 50 units will not pay the county anything,and
will only pay the State of Hawaii$374 for their registration to operate all of their units.
Also for comparison. The Counties of Kauai and Maui do not require registration or fees for properties that are in
resort(conforming use)designated zones. They make it applicable only to non-conforming usage.
Lastly,as everyone in the County of Hawaii is painfully aware of,the volcano and hurricanes have severely
impacted tourism on the Big Island.Many experts believe it may take several years for visitor number to return to
where they were previously. Even before this past five month turn down,there has not been a major hotel to open
(without being sold as a timeshare and also operated as a hotel for unused rooms)in several decades. Many studies,
including those prepared by the Hawaii Tourism Authority,have indicated that the short term vacation rental market
has"matured." It is not likely to grow much beyond where it is presently. Therefore,it is not necessary to
implement this level of regulation.
Please start your regulation with registration of non-conforming use for all those who conduct the activity with a
reasonable fee. Please allow those in resort zones to continue in the activity which was every owners'understanding
when they purchased their property. r .
Thank you for your consideration.
Manjeet Singh