Welcome back to this week's blog everyone. Hopefully you had some time to take a look for yourself at the the proposed 5th Draft in regards to the new short term rentals released by the Hawaii County Planning Department. If not, I strongly encourage you to take a look for yourself. My hope for this review process is to highlight some key points that I found to be either significant for property owners, or significant changes from the current Short Term Vacation Rental (STVR) code regulations as currently exist.
To begin, the first question with the new Transient Accommodation Rental (TAR) proposition for unhosted rentals is that we must figure out what is an “unhosted rental” is by their definition. To paraphrase, an unhosted rental is one in which there is no host or operator physically on the property or staying with the guests.
For example, if you own a 2 bed/ 2 bath condo, and were to meet the guests at the door, exchange keys with them, give them a layout of the building, and any major must know information over the rules and regulations of that building. That would be a prime example of an unhosted STVR.
A Huge talking point here comes from Section 25-4-16-17 from the proposition. This section goes over ‘Transient Accommodation Rental Operation Standards’. These standards include, but are not limited to:
owner /operator of unhosted TAR must respond to contact within 1 hour of first attempt to reach them
owner/operator of unhosted TAR must be able to physically be available at the property in situations where this may be necessary or required
Gathering sizes limited to double the number of registered guests.
Overnight accommodations limited by the amount of off street parking per the TAR permit.
Quiet hours of 8PM-7AM.
In the case that the director of TAR deems the owner/operator to be at fault in any of these terms, this will result in fines that themselves increase in amount per incident: $2,500, $5,000, and $10,000 respectively. I have expressed my personal request for more governance of unhosted short term rentals, and these regulations are not necessarily out of line. Some of these fines do seem a touch excessive. I do understand that a major part of property rights and ownership includes the peaceful enjoyment of said property. But on the other hand, I am a supporter of small business, and could see how one rowdy group of guests could cause an issue coming from the mainland and not taking the quiet hours seriously, thus causing a massive fine for the rental owner/operator. I think there would need to be more specifications for appeals and risk mitigation for the property owner. For further info on Disciplinary Actions set out by Draft 5 of the Transient Accommodation Rental Proposition see section 25-4-16.20 through 25-4-16.25.
Where can you have an unhosted TAR?
Great question that is also outlined in the proposition, unhosted TAR’s would be permitted in: Resort (V), General Commercial (CG), Neighborhood Commercial (CN), Downtown Hilo Commercial (CDH), Residential-Multiple (RM), and residential districts situated in general plan resort and resort node areas. Nonconforming use certificates will be available for properties outside of these areas, but that already possess a nonconforming use certificate.
Fees for Unhosted TAR:
Initial Registration: $1,000
Annual Registration Renewal: $250
Nonconforming use certificate: $500
Annual Nonconforming use certificate renewal: $500
What does the process for registering look like?
The OWNER must submit a registration application to the planning department. This application must include: property tax map key number and address, name and contact info for the owner and/or operator (+this individuals real estate licensure if applicable), site drawing with structures with the requited proper amount of off street parking, submittal of floor plans showing the location of rooms for rent and all emergency exits.
If you own or operate a STVR currently a very important part to read over is section 25-4-16.6. This section discusses when to register for the new permit. It also explicitly says that “existing owner-hosted and operator-hosted TAR in operation on or before [a TBD date]... shall be allowed to continue to operate until such time as their application is approved or denied by the planning department… While existing unhosted TAR that were previously registered as an STVR shall not be required to register (referring to initial registration), they will be required to renew their registration annually…”
Final thoughts and takeaways
Prepare yourself, and if you made it this far consider yourself lucky… or crazy… or bored. No matter where you find yourself in that spectrum you get to read my thoughts on this half of the 5th Draft. The biggest question that I come away with from this section is: “Is this proposed change to the short term rental side of property/property development the best possible way to help with the current housing crisis?” While these proposed changes would help to decrease the market value of homes, will that necessarily help the economy here on our island? There are a lot more businesses that either stem in with the short term rental market. Think of the cleaning services that make their business out of cleaning and turning around STVR’s. The landscaping companies that make their ends meet because of these short term rentals. Are the homes that would be freed up/put back on the market as a result of the passing of this bill necessarily the types of homes that are needed in the market right now? The market needs affordable first time and mid-level housing, and I have an educated hunch that a lot of the homes that would come up because of this newly proposed change would be above the price range of the need. Now I may be wrong, but I think it is vital that we as a community look at the problem, more affordable housing, and compare it to possible solutions. Would it be better to permit more building projects with single-family homes? I can’t and shouldn’t answer this myself, but the message is the same as last time. Let's get out and talk about this issue. If you think it does not involve you, you are wrong. In some way shape or form this issue involves all of us.
Written by Nate Konecky R-S