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Home My WebLink About2024-03-31 PL-CCI-2024-000003 Bill 121 Jennifer Wilkinson Testimony From: Jennifer W To: WPCtestimony Subject: Comments Re: Bill 121 Date: Sunday,March 31,2024 5:48:58 PM Attachments: Bill 121-24 Testimony WPC.pdf Mahalo! Jennifer March 31, 2024 HAWAII WINDWARD PLANNING OCMMISSION Dennis Lin, Chair Louis Daniele III, Vice Chair MEETING DATE: April 4, 2024 TIME: 9:OOam PLACE: Hilo RE: COMMENTS REGARDING BILL NO. 121-24 Dear Chair Lin and Committee Members: I am a mother of 4, wife, homeowner, and full-time resident of Hawaii Island. I am also a volunteer mediator at West Hawaii Mediation Center, VP of a local non-profit advocacy group, chair of the WHAR Government Affairs Committee, and Commissioner of a Hawaii County commission. Further, I am a landlord of a long-term rental as well as a permitted STVR owner since 2019. I support reasonable regulation of the legal short and mid-term rental industry and offer comments on Bill No. 121-24 to achieve more mutually beneficial and balanced legislation.As written, the bill is not a true registration, but a punitive permitting process - one which will result in a financially discriminatory impact on many residents with little hope of achieving its stated goals. Recommendation#1: Maintain the 30-day definition of a short-term rental (even if renaming as transient accommodation rental). I agree with the Planning Director, this definition is already established in law and practice within the department. Many people and businesses, including homeowners, renters, traveling workers, businesses who require seasonal employees,property managers, HOAs, AOAO's, and more, including our planning department, have relied on this definition when making significant financial decisions, creating documents and processes, employing staff, arranging travel, or creating contracts. This bill will immediately make illegal anyone who is legally renting an unhosted space for 30-179 days. (These are folks who have owned for years and travel abroad or mainland a few months a year, renting their home out when they go). This bill will immediately make illegal all condo units legally renting for 30-179 days whose CCRs prohibit any "STVR" as defined in county code. 1 There is no clear necessary reason to change the duration of a short-term rental except as an additional source of revenue. Parking, noise, and code enforcement rules exist regardless of rental duration or tenant type. Recommendation#2: Eliminate the definition of and distinction between "owner- hosted" and"operator-hosted"; regulate all rentals that are "hosted"in the same manner. If one of the purposes of this Bill is to attempt to keep long-term rentals in the rental market, then why does it matter that the individual that uses the property as his "Principal home" is an owner or an operator? If it is someone's "Principal home,"that person is a long-term resident- either a resident owner, or a resident tenant. Housing is key, not ownership. To discriminate against long-term renters by not allowing them to be employed as a rental operator, only encourages off-island owners to sell, rather than facilitate at least one long-term rental. Likewise, as homes can be large and in that case the cost and mortgage beyond an average income in Hawaii, the opportunity to be a long-term tenant host operator provides opportunity to create housing in properties that are too expensive for acquisition to most folks. Recommendation #3: Eliminate the requirement of a notarized affidavit of full compliance of all health, safety, and code requirements.A declaration that all information submitted is true and correct to the best of the applicant's knowledge should suffice. To require short and mid-term rental owners to swear—under penalty of perjury (which is A crime)that they are fully compliant with all health, safety and code regulations unnecessarily discriminate against a particular segment of the community. There is no logical reason for this. Long-term rental owners do not need to apply for a permit and their premises are not Validated for full health, safety, and code compliance. Property owners can buy and sell properties without being in full health, safety, and code compliance. Why does this bill hold tourists' standards higher than our own residents? The building and permitting process has been broken for a long time. This fact has been identified in several national studies by credible institutions, including UHERO. Because of this fact, it is also common knowledge that many residents have built or modified their properties, albeit within code and by licensed professionals, however, did not have the time or money to work within the broken permitting process. To know, and be responsible for, the environment that created the infamously difficult permitting process, and then to write regulations that would require all applicants to have all permits, is disingenuous at best.At worst, it puts residents in an untenable position of having to cease operations of what for some is the only way they can make ends meet or face a crime for attesting to a fact they know is untrue. Just as there is no liability for issuing a driver's license, there is no liability for the county in issuing a registration for an STVR. There is no rational reason for this requirement except to deter application. 2 Recommendation#4: Eliminate all rules that conflict or already exist in law. Section 25-4-16.25 is a restatement of existing tax law. Section 25-4-16.17(2)(E) and (F) is a restatement of existing law. Section 25-4-16.17(G) is more restrictive than existing law. Section 25-4-16.17(H) attempts to restrict public parking—in public spaces. Recommendation#5: Eliminate all rules that attempt to dictate where on their own property, an individual must live if there is an operating rental on the premises. If the county is going to allow hosted rentals at all, by definition, the property is the Principal home of at least one individual. It should not matter in which structure that individual chooses to live. That is not for the government to decide.Allow a rental to operate in any structure of the property if the property is also the principal home of one of the occupants. If the attempt of the drafters is to limit the use of newly constructed ADUs/Ohanas or secondary dwelling units as rentals, that can be accomplished with a title/deed notation. It does not need to be part of this Bill. Recommendation #6: Clarify the definition of`Hosting Platform'. As written the definition of hosting platform includes a"business or person"that provides a `marketplace'that offers rentals. This could be a single person with 2 rooms, a licensed property manager that lists their clients'properties, or a large 3rd party platform. This reporting requirement is burdensome and the fines exorbitant for an individual or small property manager who are otherwise compliant. I recommend rephrasing to clarify the intent is to compel reporting only by business entities or persons that facilitate or offer the advertisement of listings, but which are not licensed Hawaii Realtors nor required to otherwise pay direct transient accommodations tax. Unintended Consequences Disproportionately Affect Low-Income Residents and Reduce Housing Security Residents are the forgotten segment of people who need short-term rentals. To intentionally, methodically, try to reduce them will only further raise rental prices. HTA found that 2 1% of travelers are non-visitors. These are people traveling for work, for medical services, to visit family on their own island or neighboring islands. These are the folks who are waiting for their home to be tented or repaired, needing a place to live in between long-term homes and those who are just entering the workforce and don't have the rental history needed to secure long-term housing. Residents needing this type of housing are frequently on the lower end of the socio- economic scale or otherwise on a budget: those young folks transitioning out of the family home, 3 recently divorced, don't have a high enough income or credit score,just getting back on their feet, traveling unreimbursed for work, or they just want to live in an area before purchasing or signing a year lease they are locked into. These are not folks who want, or can afford, to pay resort fees and stay an hour away from schools, work, family, doctors' offices. Without temporary housing options for these residents, in residential areas, their housing costs would skyrocket. On the other side of the same coin are all those who work in the industry. They can work a more flexible schedule, in their own neighborhoods and for a livable wage, unlike resort wages. In fact, some of these folks would benefit from becoming a long-term tenant operator where they can work and live in the same place. Over time, as likely intended by this bill, availability of these options will dwindle, always resulting in an upward pressure on housing costs and the reduction of housing security for all those involved. For these reasons,I respectfully request that this Commission do not recommend passage of this bill as written and forward suggested amendments to address these issues. Thank you for the opportunity to testify. Respectfully submitted, Jennifer Wilkinson 4