HomeMy WebLinkAbout2024-04-15 Bill 121 Penny Lee From: Penny Lee
To: LPCtestimony
Subject: Testimony regarding Bill 121 for Leeward Planning Commission
Date: Monday,April 15,2024 2:07:29 PM
Attachments: Testimony TAR BiII121 Leeward Planning.pdf
Aloha Chair DeFranco and Members of the Leeward Planning Commission,
Please find attached a pdf with my testimony regarding Bill 121 , in opposition.
Mahalo,
Penny Lee
Testimony with concerns about TAR Bill 121
Aloha Chair DeFranco and Members of the Leeward 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.
There are large areas of the Big Island that have no jobs or resorts.The island is big enough that we can not commute to
jobs, we have to create our own. When somebody is older,they need options they can handle without driving a car or
standing 8 hrs on their feet. Vacation rentals allow Kupuna to age in their own home and supplement their social security
or a stay-at-home mom to have an income at home or work for vacation rentals in her neighborhood.
2. About 46%of the Big Island is state land use"Agricultural", 52% unavailable "Conservation" and currently only about
2.2%"Urban". The TAR bill allows unlimited new vacation rentals in resort and commercial zoning (all urban) 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.
3.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).
4. The TAR bill allows unlimited new 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.
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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.
Note: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.
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 W%%r«•.AlltheRoom s.coin 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 Brach 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 S selected Marker Boundary
Characteristics
SELECT MARKET* Provider
Hawaii County,Hawaii,United States o_x - (4)airhnh,hooking,...x +
Filters (D
Property Type Instant BO... Sleeps Min... Max-, Beds Number of Revi-
i el_ -,.I:,=,. {3)True,Fak.. - - -
Is Managed Is Artie Rooms Min Stay L... Max,., Bath_ Rating
i2)True.False - False 49:]True „ _ x _ 0-
0 T00
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
M T:rhnh r 0--1.31 ki6.67%1 ■U-196[1.90W1
600krg �1-6.63k(33.72%I 1-153 EO.78%1
0 horn-y 2--6.78k(34.47%} l02-3.59k 118.75%1
`-vrbo 3-3.45k f17.59%} `{f 3-1.07k 15.4296}
r� 4--1.01 k(5.1IN) E 4-5.43k(27.63%J
A 5-3dd(1.75k) 5-8710.43%]
s^6-83(0.42%) 6-52k{26.43%I
0 7-31(0.16%1 f 7-2590_'2%)
�0 0 %} �9-89(x.4575)5%)
10-4 f0.02%fi 10-594(3.02%]
0
11-110.01%J ■17-41 10.21%I
112-1(pA1%1 01
2-2sa ll.as%1
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
195 apartha[el
247
aperthotel 2.361, �cn 2271,
ham bounque horel iiW
boutique hotel tvngalow1
hos 43 cabin �Pg
campeman campsite
rasa particular casae
chalet chateau
condo 6.081 coneehotel 3 `
etetragc 119 [mage , 13
earth house earth house 5
fa rm stay 66 farm stay S71
guest supe Ul goes[suae �
hamescay homescay
hotel L2 Hotel 3348
house 4.89k souse 4,681,
ig1� rglop
lodge 7
minsu otRcr 1
tither recreational vehicle
recreational v¢._ 517 resort village 442
resort vlllage sh.pping comainer 288
94
shippingconlai,., tent
tent � Sp.
tipi townhouse 472
tow1h01te �aCaao.home 1 2ku"
vacation ha me 231, Y
yurt 0 2 6k
0 r
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
'towner" 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...
Gross Revenue "osis
Mac $400.000,000,000 00 Gros Revenue
Prupercicx
�-1
2-3
4-9
10--19
N
0
H
p 20-45
6
50-91
100 267
7 8170•6170
0 2,000 4,000 6,000 8,900
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...
S75CL1 0 100-267
10-19
20-45
M 2-3
4..9
50-•91
8170--8170
S5509
Property Operator Groups by Revenue by Port...
Porrrolio
Bin MUM-
Group Hosts SIZE Gross Revenue Properties
2 3,228 1-1 $61,948,623.41 3,229
3 888 2-3 $97,856,290.27 2,025
4 310 4-9 5153,965,754,18 1,686
5 54 10-19 $145,683,568.01 730
6 43 20-45 5576382,144,11 1,334
7 12 50-91 $752,687,862.38 777
8 11 100-267 $5,499,339,246,24 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 Hawaii
The overall visitor unit count on Hawai'i Island RI..6:11ill—ari lsl-d-11-1-by U.117yp.
totaled 11,119 units,an increase of 5.4 percent1z,0oo 23 11,119
compared to the previous year. 10,615 0,546
10,°00
• Hotels continued to comprise the bulk of 3,600
Hawai'i Island's visitor plant inventory
(5,735 units)[Figure 6]. 6'000
• In 2023,a lower proportion of visitor units
were categorized in the Luxury category
x
compared to previous years(41.0 percent). 2,000
• Pacific 19 (fka Kona Seaside Hotel) ° R2.021M.22
reopened the remaining units in the tower HAW7A'l ISLAND II 123 10,615 low 11118
portion of the hotel after renovations.
OTAL
■AplM.le1 119 119 24 16
-B&B 230 216 207 219
■Condo HM 483 393 375 291
■Honels 59 59 59 51
■Hole) 6,115 6,711 som 5,711
.Varaem Peril unit 2,192 2,192 2,346 2,788
■Otlser 40 48 48 48
•Timeshare 1,671 1,878 1,871 1,971
6. Stephanie Donoho then takes the already inflated number of 19,000 "vacation rentals"from the allthercoms.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:
Moretravel ,s Get the app 0 United States Trip Boards ■ ��lr� `a' '° al'p
Ga"ng[a Tryy JerS
Goingm O KaMilo at Mauna Lam Resort,... - Dates
Mauna Kea Resort,Kamuela,Hawaii,U_. Dates R 2 travelers
�Flkers v � Price v fiooms&sP t'+ v Sart al'mcommendetl '+
Flhers Papular O Goms&spaces Sort by recommended
ea properoles
Premier Host _ Q `undo Onthebeach
Breathtaking 3BR Penthouse on Hapuna Earn OneKeyCash to use when you book your next getaway an Vrbo,Expedia,and Hot0s—m sign in
Beach!
sleeps 7-3 bedrooms-3 bathrooms
4✓ naeq' Condo l3mlnwalktowaikuhPuako Beaches
$1,500 1 Mauna Lani-Luxury 4 Bedroom Home-Sleeps 10
*5.0 Fxceptional(6 reviews) avg nes nigh[ Sleeps to 4 bedrooms.3+bathrooms
Pool '�. Parlung ®washer.Dryer
Premier Hos[ 0 Villa-5 min drive to the beach $5
Mauna Kea Resort Villa,Ocean Views With *5.0F Fti...I(I 53 rev ews)
Pool&Spa In Backyard
Sleeps 8.3 bedrooms-3+bathrooms i / House 7m1
n drivetothe beach
`<--- Luxury+Privacy•Sleeps 70•Golf Cart Included
$1,150 Sleeps 10.4 bedmoms 3-bathrooms
5.0 Exceptional(59 reviews) avg per night ,�y 7 i ,f Pool � varuig I?M washer=Dr)er
` '.i
Premier Host House 7 min drive to the beach 11,s.o Exceptional(22 reviews)
Expansive Mauna Kea Resort Home,3 private
d
bdand massive kids suite! Pram;er Host �` ? ry View inamap ko eeacnes
Sleeps
s]2 az-a bm
edroos s.bathrooms Luxu
r» Luxu a Pool&Golf Course Views!
$2,999
*5.0 Facepo.ral(1 review) right
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?