Council sees economic upside of vacation rentals but wants to make sure they don’t overrun neighborhoods

  • LAURA RUMINSKI/West Hawaii Today file photo

    A cyclist rides past a vacation rental on Alii Drive in Kailua-Kona.

County Council members are calling for a balance that would allow revenue-generating vacation rentals in some areas while keeping them from consuming neighborhoods in others.

The council Finance Committee heard a 90-minute presentation from computer analyst Stefan Buchta, who’s concerned about his Leleiwi neighborhood being overrun by the short-term rental business.

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Buchta said Big Island residents are being squeezed out of neighborhoods by out-of-state investors who pay cash for properties and turn them into vacation rentals. Making a presentation at the request of Hilo Councilwoman Sue Lee Loy, Buchta said the easy profits made by short-term vacation rentals reduce the inventory of housing available for families on the island who can’t find long-term rentals and can’t pay cash to buy a home.

Buchta said the original concept of “home-sharing,” where people rented out a room in their home, has dwindled to 11 percent of vacation rental revenue. Now, the market is dominated by whole-house rentals, many owned by commercial hosts who own more than one house or condo unit.

He emphasized home-sharing and small-time vacation rentals can enhance the economy without hurting neighborhood character, the way a bee can collect pollen from a flower without harming it.

“There are bees and there are ants, and if there are too many ants, they’ll begin to kill the flower,” Buchta said. “The commercial operators are abusing the system. … These people are running multi-million-dollar businesses in residential neighborhoods.”

Buchta estimates taxing Big Island vacation rentals could bring $20 million to $30 million annually in taxes to the state.

Council members, who are set to hear a bill in the coming months that would limit vacation rentals to commercial and hotel/resort districts, said allowing short-term rentals could create tax revenue, but they also are hearing from constituents worried about the character of their neighborhoods.

“It became very apparent to me there is a need to address this issue,” Lee Loy said. “It’s an issue that affects not only my community but communities all across the island. “

Kohala Councilman Tim Richards agreed.

“There’s not a one-size-fits-all,” Richards said. “We have to strike that balance.”

Kona Councilman Dru Kanuha said he can see an economic upside, but he gets calls every day from constituents with complaints about the rentals.

Many residents don’t welcome the vacationers.

In testimony, Jolene Mears said the Keauhou Uka community in Kailua-Kona is no longer a quiet residential neighborhood thanks to vacation rentals. She said the party-like atmosphere of large houses in particular lessens the quality of life for the residents.

“We are regularly … woken up by screaming, laughing, cursing, drunken brawls and have absolutely no ability to get the group to quiet down,” Mears said.

She said calling the police doesn’t always get quick results because the police are overwhelmed by the number of transient rentals cropping up in the area.

“In addition to the noise that seems constant, we have seen guests urinating over their railing, strutting around naked and have found litter in our backyard,” Mears said.

One testifier said the belief is unfounded that allowing vacation rentals in residential areas will result in them being overrun with tourists.

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“Tourists aren’t rats,” said Cheryl O’Brien, “and the properties they stay in are almost across-the-board better cared for than others.”

Email Nancy Cook Lauer at ncook-lauer@westhawaiitoday.com.