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HomeMy WebLinkAbout2024-04-02 PL-CCI-2024-000003 Bill 121 Penny Lee Testimony From: Penny Lee To: W PCtesti mony Subject: Testimony regarding Bill 121 Date: Tuesday,April 2,2024 2:20:55 PM Attachments: Testimony TAR BiII121 WindwardPlannino.odf Aloha Chair Lin and Members of the Windward Planning Commission, Please find attached a pdf with my testimony regarding Bill 121 . Mahalo, Penny Lee Testimony with concerns about TAR Bill 121 Aloha Chair Lin and Members of the Windward Planning Commission, 1.The Hotel Industry as represented by the Kohala Coast Resort Association is trying to portray vacation rentals as unsafe, proliferating in local neighborhoods, don't pay taxes, do bait-and-switch scams. Of course they mean the "other" vacation rentals, not the vacation rentals inside the Resorts.The Hotel/Resort industry has embraced the vacation rental concept very much for their own growth.These condos, villas and Residences tend to be owned by wealthy off-island owners, with the majority of the profits going offshore and to large corporations. On the other hand, many local families rely on the income and jobs from their vacation rentals to make a living on this island and to afford their own home. The report from "alltherooms" submitted as testimony by the Kohala Coast Resort Association has serious flaws which lead to substantially inflated numbers, please see the detailed analysis at the end of my testimony below. 2. The TAR bill allows unlimited vacation rentals in resort and commercial zoning and "PD Project Districts".The new draft General Plan shows large "urban" expansion areas next to existing resorts (see sample map below).There is a public comment on the draft General Plan map: "(from the document page 37)The Waikoloa area contains the single largest designation of Urban Expansion Land Use on the entire island. What rationale was used to reach this determination and how has the existing community been included in reaching this result?" What are the odds of those "urban" areas turning into affordable housing and communities for local residents versus multi-million dollar investment homes for off-island owners, with resort amenities and automatic right to be a vacation rental?Who is reining in the ever-expanding resort industry? Now developers can just build so-called "housing" and expand transient accommodations next to the resort.The expansion of these already very dense areas seems problematic, considering the very precious marine ecosystems down stream,the scarcity of water and the already huge problem of sewage and pollution (see cesspool conversion priority map below, Priority 1 is red). How many tourists can you possibly concentrate around Hapuna beach for example? Puako? Kawaihae?What is the carrying capacity? How many golf courses, pools, hot tubs, AC systems, individual inside and outside kitchens and bathrooms can this fragile ecosystem support? I wish there was a much more comprehensive review of the tourism industry and careful planning for the future.This is not sustainable. Public Comments B9 HawaN Cesspool Prio,Idn on Tool Public Results App Link to Input DaW App \� 4cemmentahou,ths (fromvhedocumen ® KV a location VVAIKO OA Mauna a, . 2) .a,n n ngl� Ub En 9 - p L L and Use on Me entire lsiana- What rationale was -�I used to:each tks PuekaM -_" nstem:�„a:�nad nowlie r i 1 ng n�been � I ded- eachng ® Maun r: /ra H _.,, ,.':l.Si".VA,USCSI mTum Ga in$afeG hGeoT h� ses,lnc METVNASA,USGS,EPA,USDA,US ,, - s ee L.y Psri Purple= Resort zoning Orange= Urban zoning I 3. About 46%of the Big Island is state land use "AG" and currently only about 2.2% "Urban". The TAR bill allows unlimited vacation rentals in resort and commercial zoning and "Project Districts". On the rest of the island, nobody can operate a vacation rental unless they receive a NUC(Nonconforming Use Certificate). Nonconforming vacation rentals also have to renew this NUC every year with many requirements,fees and threat of greater than $10,000 fines wielded at the discretion of the Planning Department. No other NUC needs to be renewed annually. Heather Kimball, during the introduction of Bill 121 at the county council, repeatedly stressed that the NUC is NOT A PERMIT, and the TAR process just a "registration".The sworn affidavit requirement is a trap for many. Now with state bills HB1838 or SB2919 in the legislature that very nonconforming "grandfathered" status becomes worthless.The bills give the counties the power to eliminate nonconforming uses at any time, specifically just for vacation rentals only. Why would anybody sign up for a NUC under the TAR bill under these circumstances? For our families our vacation rentals are usually our biggest investment. How can we count on our vacation rental income when it can be taken away from us at any time? Hawaii County offers no assurance for continued operation of legal vacation rentals in the future. By the way-we are relying on the grandfathering clause for many things, like our non-conforming single-family homes on AG land and the non-conforming subdivisions with small lots on AG land,for example. Grandfathering is central to protecting property rights. It's a slippery slope if the county were now to selectively remove the grandfathering of vacation rentals.The state legislature has said that they would leave the evaluation of legalities to the County,this could potentially be a large legal liability for the County. 4.The TAR bill has elaborate rules about where the owner/host of a hosted vacation rental can stay and not stay on their property. On AG land there are further rules and restrictions. One of the results/goals of all this is to try to ensure that hosted vacation rentals can not offer a legal cooking facility to their guests. Vacation rentals usually include cooking facilities, that's what our guests (often families)expect. Considering the many rural and remote areas on the Big Island, this does not make sense to leave guests stranded to eat crackers and sandwiches? Guests also choose vacation rentals for privacy. Forcing the owner to be "hovering" around on the same building site is intrusive and the opposite of what guests want.These rules are strangling the operation of vacation rentals and making them undesirable (on purpose). 5. Small scale transient accommodations like small business vacation rentals and Bed and Breakfast are much more appropriate for the Big Island's rural character. Several of the Community Development Plans explicitly mention this. They offer economic input for otherwise underserved and lower-income areas. Many communities on the island don't want any Resort development in their areas. If the County is serious about supporting small scale farming on this island for food sustainability, vacation rentals are a great way to make small farms financially viable. Interestingly the draft General Plan doesn't mention TARS, STVR or vacation rentals at all (it mentions vacation rentals/STVR only ONCE). It mentions the word "Resort" 38 times. So this is Hawaii County's plan for the future (2045)? We often hear "We want vacation rentals only in resort zones" and "We want the champagne tourist"they are all slogans that lead to one thing: a Monopoly for Corporate Hotels and Resorts. Somebody needs to work for achieving a balance and reining in the Monopoly of the resort industry. Under the guise of "Destination Management"the Hotel industry now seems to want to control every beach, reef and scenic point on the island. With the TAR bill and various related state bills they are pushing local residents out of their vacation rentals all across the island, while securing and expanding a Monopoly for the Resorts towards owning 100%of the tourist accommodation market. Leaving little to nothing for the local residents. Lies, Damn Lies and Statistics about Vacation Rentals — Big Island Edition Has anybody fact-checked the numbers? In the written testimony for the Windward Planning Commission Hearing on the TAR Bill 121 on 4/2/2024 you will find the testimony by Stephanie Donoho for Kohala Coast Resort Association with attached 4 pages of a report from alltherooms.com. Stephanie Donoho (Registered Lobbyist for Kohala Coast Resort Association) states in her testimony: Finally, I'm attaching a report from �\� \%,,A11thc Room s,com as an addendum to our written testimony, It shows that there were more than 19,000 units on Hawaii Island advertised through Airbnb,VRBO, HomeAway and similar websites during the last year. Those units range from studios, to a single bedroom in someone's home,to entire homes with up to I2 bedrooms. If the average unit had,just 2 bedrooms, that would mean more than 38,000 rooms were advertised on our island last year. In comparison,the hotels along the Kohala Coast of Hawaii Island(Mauna Kea Beach Hotel,Westin Hapuna, Waikoloa Beach Marriott. Hilton Waikoloa, Auberge Mauna Lani, Fairmont Orchid, and Four Seasons Hualalai) have a combined total of 2,915 hotel rooms. If you take a closer look, it appears the data is unfortunately flawed and misleading. 1.The report combines listings from Airbnb, Booking.com, Homeaway,VRBO seemingly without deduplication. Most vacation rentals are listed on several booking sites. Ma r k e t ■selecced Marker Boundary Characteristics E SELECT MARKET* Provider Hawaii County,Hawaii„United States o...x - (4)airhnb,hooking....x + Filters O Property Type Instant Bo... Sleeps Min.,. Max-, Beds Number of Revi.., :elee: -aues (3)True,Fals.. - - - Is Managed Is AOve Rooms Min Stay L... Max... Bath... Rating (2)True.False - False L)True _ _ 0- 0 100 Revenue LTM Average Da... Average Ac... Booked Nig... Hosts Properties $213M $275.05 6,947 775,094 4,546 19,655 Provider Listing Distribution Rooms Sleeps E ai rhrh 0 0—1.31 k i6 67Sy) 146 i 1 DO* hcok,,g ■1—6.53k ill72%f 'home8w y ■2-6.78k;34.47%1 2-3.69k118.75%1 �vr6o 1]� �3—i01 k;sl,%); 3—t07k[5,42% 4—I.01 A i 5.12?51 �.�—5.43k.(27.G3%1 5—3,U 11 75;6) 5—871(4,43%p 6—83[0.42z �'6—5 2k 126 43%; 147-31[0.163'i] 7-251( 32'S5 a—15[OAB%1 8—1 t 1 k 1 5 qri 4—1 I0.01 M1 AIR9-�-99(0 45%) try-4[0.02+,1 ■10--594[3.tl2%1 0..71 +l41 I0.2'%; 12-1(O.ot+51 t2—.52 i1.28cf1 �...ei .n rn nsu ra ramrwnc 2.The report includes property types like aparthotel, boutique hotel, condo, hotel, resort which seems to indicate that units inside resorts are included in the numbers (see blue bar chart"Property Types"). Remember the report was supposed to be about vacation rentals?This chart is very similar to Jerry Gibson's earlier report 1/31/2024 for the Big Island (pic on the right), except the label "condohotel" has now been changed to "condo" in Stephanie Donoho's testimony 3/26/2024 (pic on the left). Property Types Property Types 247 epar[hotel 195 apartna[e. 2271, 2.361, barn 67 ham baunque hotel 106 boutique hotel trungalow 1 hv5 49 ca bra V38 -Pe, cdmpsO c s.particula, [as[le chalet chateau condo C.�84 contlahetel corsage 89 'MaF.e 1313 earth house earth house 5 farm stay T376 farm stay 171 guest suit guest s1— hnmcatey homestmy hotel L2 hotel h.", 4.89k 'louse 4,68k 141 igloo 'glop lodge lotlge minsu 7 other recreational veh,Cle rescreational ve... resort village 442 revert vl lla 517 2gg 8< 94 sh.pprg romamer shlppingwmai,-, enc tent :ipi tipi townhouse 472 tawnhbuse 3Cdnpn h.— F 2k. vacation horn vrt 23k Y yort 0 2 a 3.The red, orange, blue bar chart titled "Hosts, Gross Revenue and Properties by Portfolio size": Again, probably they did not account for the same unit listed on multiple sites. Again the word "host" is not the same as ''owner" on these listing sites. Most likely those are property management companies that advertise multiple listings. Especially if condohotels and resort units are included.The large orange and red bar on the very left is just really strange. Supposedly some host has 8,170 listings exactly and makes a gigantic amount of gross revenue, like$400 Billion Dollars? Not likely, I would be looking into the underlying data on that one. For comparison: Hawaii County budget for FY 2023-24 was$1.19 billion. Hosts,Gross Revenue and Properties by Portf... Grass Revenue "uxs so cc $40CA0,000.000 00 Gross Revenue Pruper[ie5 1.1 7-3' 4-9 10--19 O D r p 20--45 6 s0--91 1as 267 8170-8170 a 2.000 4,000 6.000 8,000 Hosts,Properties 4.The big green pie chart with table below "Property Operator Groups by Revenue by Portfolio Size",this is for the Big Island: 5,253 Hosts or 46%of all Hosts have 1-3 vacation rentals listed (portfolio size) Interesting, lots of small-scale operators, we have heard otherwise. Also adding up the column "Properties" results in 11,420 total number of properties.That again includes condohotel, resort units etc and duplicates.The last line in the table again is questionable, a "0" host has 8170 properties and makes$545 Billion Dollars, nah. But of course if you add that weird line,than you get to the 19,655 properties Stephanie Donoho cites. Gross Revenue by Properties Under Managem... 575CnA ■IOO-267 10-19 20-45 2--3 4--9 w 50-91 e 170--9170 5550B Property Operator Groups by Revenue by Port.,. Portfolio Bin PORTED... Group Hosts SIZE Gross Revenvre Properties 2 3,228 1-1 $61,948,623.41 3,220 3 888 2-3 $97,856,290.27 2,025 4 310 4-9 $153,965,754.18 1,686 5 54 10--19 $145,583,568.01 730 6 43 20-45 $576,382,144.11 1,334 7 12 50--91 $752,687,862.38 777 8 11 100-267 $5,4".339,246,20 1,640 9 0 8170- ... $545,833,050,991.13 8,235 S. Stephanie Donoho then compares the number of 2,915 "hotel rooms", only counting just the hotels on the Kohala coast she represents, with the inflated island wide number of 19,000 "vacation rentals". For comparison:The Hawaii Tourism Authority HTA 2023 Visitor Plant Inventory states "Hotels continued to comprise the bulk of Hawai'i Island's visitor plant inventory(5,735 units) [Figure 6]." It also shows an additional 1,971 timeshares.That is 7,706 units.The HTA report has no data on how many condos and vacation rentals are in resorts. Island of HawaN The overall visitor unit count on Hawai'i Island R ire6:Hawarl Islai-1—mi by U.1,Typ. totaled 11,119 units,an increase of S.4 percent 12,000- 11,123 11.119 compared to the previous year. m a,616 0,5a5 10,000- • Hotels continued to comprise the bulk of 3,000, Hawai'i Island's visitor plant inventory (5,735 units)[Figure 6]. 2 6,000 • In 2023,a lower proportion of visitor units 2 +000 ;. were categorized in the Luxury category E 2.000 compared to previous years(41-0 percent). 2 • Pacific 19 (fka Kona Seaside Hotel) 6 2020 2021 2022 '.. 2023 reopened the remaining units in the tower HAWAI'I ISLANc 1112s 10615 10 Us 11119 portion of the hotel after renovations. ............To.rsi.u1n....__.................. •ApllHote1 119 119 24 16 m BBB 230 215 207 219 Condo Ho1G 483 393 375 291 111 59 59 59 51 111 6,115 5,711 SgN 6,,735 -Vxaem Renal llnd 2,192 2,192 2,3/6 2,788 ■09rer 48 43 46 48 Timeshare 1,977 1,878 I'an 1- i 6. Stephanie Donoho then takes the already inflated number of 19,000 "vacation rentals"from the alltherooms.com report and doubles it "per bedroom"to 38,000 vacation rental "rooms". Considering that Hotel rooms routinely sleep a family of 4 with 2 beds and/or an additional sleeper sofa,this is not a fair comparison. Furthermore,the Resorts she represents don't just offer hotel rooms,there are condos,town houses, timeshares, vacation rentals, villas and residences to choose from. Many of these are also listed on the same booking sites, so they are all counted in her "vacation rental" numbers,for example on VRBO: More travel ��Get the app ® Uoitedstates Trip Boards . y-Get the VP e Ga 9 Going to K M.ila at Mavna Lao Resort,. - Dates R 2 travelers 0 Mauna Kea Resort,Kam uela,Hawaii,U Dates - $Flke v Popular v price � Booms&spaces " Sorz by recomrnendetl Flhers Popular �_ O Rooms&spaces Sort by recommended as properr�es �Fre�m iyetrµHost I Ce On Clle beach Breathtaking won 0 4 Earn Cm,Key,C�h to use whenyo,book you,next get—y on Vrb.,E.pedi.,and Hotel,.,.- Sir in 3BR Penthouse on Hapuna Beach! eeps 7-3 bedrooms-3 6ai ie Condo 13 min walk to Wa.i ul Pudko Beai $1,500 Mauna Lani-Luxury 4 Bedroom Home-Sleeps 10 *5.0 Exceptional(6 reviews) avg per night Sleeps 10 4 bedrooms 3+bathrooms aooi � vark,ng �washer.Dryer Premier Han © Villa-6 min drive to the beach $5 Mauna Kea Resort Villa,Ocean Views With *5.0 Exceptional(153 re°e 51 „6pe,n Pool&Spa In Backyard Sleeps 8.3 bedrooms-3+bathrooms Premier non (� House7min drive to the beach Luxury a Privacy•Sleeps 10•Golf Cart Included $1,150 q m� Sleepsl0 4bed oms.3-bathrooms *5.0 Exceptional(59 reviews) avg per nighty: 1 ff orxi, a vairking ®wazner-Dryer $6 Premier Fit- House 7 min drive to the beach ` *5.0 Exceptional(22 re—) avg prrn Expansive Mauna Kea Resort Home,3 private bdrms and massive kids suite! Pe"', j d condo tar Vim inamap ,knees nes sleeps tz abedrooms s+bathrooms Luxury h.r,,,�-.q-r,T.ete Pool&Golf Course Views! $2,999 *5.0 Exceptional(1 review) avg per night For comparison UHero Housing Factbook on page 23 shows the following vacation rental numbers for the Big Island: 6,847 vacation rentals.The UHero report has no data on how many of these vacation rentals are in resorts. WHEN will someone CHECK the data?So this is the data being used to rile up the public and justify these draconian bills against vacation rentals?