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HomeMy WebLinkAbout2024-04-14 PL-CCI-2024-000003 Bill 121 Jennifer WilkinsonTestimony From: Jennifer W To: LPCtestimony Subject: Bill 121 Testimony Date: Sunday,April 14, 2024 5:49:47 PM Attachments: Bill 121-24 Testimony LPC.odf April 14, 2024 HAWAII LEEWARD PLANNING COMMISSION Barbara DeFranco, Chair MEETING DATE: April 18, 2024 TIME: 9:30am PLACE: Kona RE: COMMENTS REGARDING BILL NO. 121-24 Dear Chair DeFranco and Committee Members: I am a full-time resident of Hawaii Island. I am also a landlord of a long-term rental as well as a permitted STVR owner. I use my short-term rental income ($498.19 per month after expenses) to offset the higher property taxes I pay because I rent a long-term unit on my primary property. I have repeatedly heard statements that suggest the public is `confused' or is `being fed misinformation' or being `taken advantage of by opponents of Bill 121. Setting aside the offensive nature of those statements, I assure you, while there may be some who do not understand the bill in its entirely (and this should be some indication that the bill is TOO complicated)the majority of the testifying public does in fact understand the Bill and that it will be harmful to them. With all due respect, I suggest that the drafters are the ones who underestimate the impact of the Bill as applied to our community. Simply because someone testifies that it will take away their ability to rent a space on their primary residence, doesn't mean they do not understand. More likely it means they have a scenario that does not qualify under the Bill's over complicated and burdensome criteria and that the drafters, who've never taken live questions or allowed for scenario discussion, really haven't contemplated the true impact of the bill. Statement: "If you are a resident of this county, you can start transient accommodation, on your property at any time . . .". Truth (if Bill 121 passes unamended): If you are a resident who is a long-term tenant,you CANNOT start a transient rental accommodation at any time, even if your landlord allows it. §25-4-16.2(c)(1). If you are a resident owner who resides in the guesthouse or detached bedroom on your property you CANNOT start a transient accommodation rental in your main home. §25- 4-16.1(a)(3). 1 If you are a resident owner who resides in your primary residence and wants to rent out your second dwelling, tiny home, yurt, or cabin, you CANNOT start a transient accommodation rental. §25-4-16.1(a)(2). If you are a resident owner who resides in your primary residence you CANNOT start a transient accommodation rental in your ohana after January 1, 2024. §25-4-16.1(b)(1). If you are a county resident owner who does not reside on your rental property,you CANNOT start a transient rental accommodation with on-site operator after January 1, 2024 if the property is in a residential zone. §25-4-16.2(c)(1). Even if the property is in an approved zone, the resident operator CANNOT live in a guesthouse or detached bedroom. §25-4-16.2(b)(3).And the rental CANNOT be in the ohana or second dwelling. §25-4-16.2(b)2) Statement: " . . . as long as you're doing it legally . . .if you hear someone say they cannot have a TAR on their property—they are being fed misinformation". Truth (if Bill 121 passes unamended): Hundreds of unhosted rentals currently operating legally under existing law will immediately be made illegal. §25-4-16.3(b)(2). (This is also contrary to state law HRS§46-4(a)) Any condo currently operating legally in an association that does not allow"short term vacation rentals"based on the existing legal definition will immediately be made illegal. §25-1-5. Any owner currently renting a hosted unit in a property which does not have all permits for all modifications is technically illegal and CANNOT qualify. §25-4-16.7(a)(6). Any owner currently renting space on their agricultural property that isn't their primary residence is technically illegal and CANNOT qualify. §25-4-16.1(a)(2). *(While the rules on agricultural land are state rules,the county DOES have the ability to continue to look the other way as it has done for DECADES, particularly now with the highest inflation and cost of living we have seen in decades and farms struggling to survive). They could simply exempt agricultural lands from this bill. The Community knows their individual situations better than the County,which has not performed a study. I suggest because hosted rentals are not required to register, the county simply can't appreciate the breadth of the impact on hosted rental owners. The two referenced data sources were outdated and lacked depth and qualitative research. No study has contemplated the economic impact of hosted rentals versus unhosted. 2 Statement: "Impact on overall housing prices [in city and county of Honolulu] 5% increase...they [TARS] have an inflationary pressure on rental prices and overall housing costs. That is what we are trying to address here." Truth (if Bill 121 passes unamended): The counties of Kauai, Maui and Honolulu have all had short term rental regulations for decades. These regulations have not created housing nor decreased housing-related costs in those counties. And they've been trying to tweak those laws for years. Bill 108 did nothing to create housing here, nor did it reduce housing-related costs. In fact, the drafters mentioned it was nearly "impossible to enforce". How now, is literally doubling the number of residents required to obtain a permit to operate going to be any more enforceable? How is it going to be any more effective than Bill 108, or the laws on Kauai, Maui or Oahu with respect to housing creation or costs. Truth is, it won't. Statement: "HRS Chapter 49 gives the county the ability to determine what activities can take place on different land uses . . .activities that have been determined to be appropriate in those areas.. . .commercial activities are strongly regulated. . ." Truth: Counties DO have the authority to zone and to determine uses allowed in each zone. However,they do not NOT have the authority to arbitrarily change the definition of a use just so that they may phase it out. Short term rental use is residential use according to the District Court of Hawaii (see Haw. Legal Short-Term Rental All. a City of Honolulu, 22-cv-247-DKW-RT(D. Haw. Dec. 12, 2022)which noted that residential use doesn't change because of the duration of the use. Simply because someone lives somewhere on a week-to-week basis doesn't mean the `use' is now commercial use.As the court determined, "Whether a use is residential depends much more on what is being done at a residence than for how long." Hawaii county considers long term rentals,residential use, not commercial. Rentals of 30 days or more are currently treated the same as long term rentals—as residential use,not commercial. They do not require a permit, they are not subject to stringent rules, renewal, or discretion fines. Why is there some arbitrary timeframe that changes that `use' from residential to commercial? There isn't. The county cannot now argue rentals are commercial use just so they can phase them out. That is contrary to legal precedent and state law. 3 I support reasonable and simple regulation of the legal short and mid-term rental industry. To achieve more mutually beneficial and balanced legislation that doesn't harm existing operators, I suggest the following amendments. Recommendation#1: Maintain the 30-day timeframe in the definition of a short-term rental. Recommendation#2: Eliminate the definitions of and distinctions 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 it should not matter whether individual residing on the property is an owner. If it is someone's "Principal home,"that person is a long-term resident—whether they are an owner or a 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 on the market. 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. There is no logical reason for anything more than a declaration of accuracy. The county do not apply the same standards to long-term rentals for our own residents. Why should they be more concerned about tourists. Further trying to prove what someone knows or doesn't know is just an exercise in futility. The only purpose this requirement serves is to scare and discourage owners from applying. Recommendation#4: Eliminate all rules that conflict or already exist in law or that are nearly impossible to enforce. 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) is unenforceable and attempts to restrict the public from parking in public spaces. Why would you attempt to tell folks they can only have so many guests? How would you tell if it was the owner/operator's guests, or the renter's guests? Recommendation#5: Eliminate anything other than what amounts to a true registration. Name, address of unit(s), and contact information. Why do you need to know where all the bedrooms in a home are/a to-scale site plan? Why, knowing that so many folks have unpermitted modifications, would you require them to swear they are compliant? Why not just a declaration they believe is safe? 4 Recommendation#6: 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. Recommendation#7: Grandfather in all rentals currently operating regardless of ownership, operator residency, zoning, or any other criteria and allow that property to continue said operation with basic renewal requirements (as allowed in 108). If a resident has been operating a rental before this bill goes into effect, they should be allowed to continue,regardless of a myriad of criteria. It is hard enough to make ends meet here. Whether you're an employee operator, vendor housekeeper, farmer, kupuna owner in a detached room - it should not matter. Let us survive however we can and let us continue to do what we are doing. If county wishes to create standards, assure they are in alignment with the same rules all residents need to adhere to, and make the process easy to understand, transparent and fair. For these reasons, I respectfully request that this Commission gives an unfavorable recommendation of this bill as written and forward suggested amendments to address these issues and or send back for an economic impact study. Thank you for the opportunity to testify. Respectfully submitted, Jennifer Wilkinson 5