Councilwoman questioned on vacation rental

  • Eoff
  • The Kona Islander Inn is a popular vacation rental in Kona. (Laura Ruminski/West Hawaii Today)

North Kona Councilwoman Karen Eoff, the primary sponsor of a bill limiting vacation rentals on the island, has come under fire for her ownership of a vacation rental condo in Kailua-Kona.

Eoff is the only council member who owns a short-term vacation rental, according to financial disclosure reports filed by Jan. 31 with the county clerk.

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She’s also the council member who co-sponsored a bill to regulate short-term rentals that the Hawaii County Council will consider.

Eoff lists her ownership of the condo in the real estate section of the financial disclosure, but doesn’t list income received from the rental with her other sources of income as required by law for any income received of $1,000 or more.

The 372-square-foot condo at the Islander Inn on Kuakini Highway is valued for tax purposes at $89,800, according to the county Real Property Tax Office website.

Eoff’s condo ownership came to the attention of Rob Guzman, who owns the vacation rental Bananarama Cottage in Kalapana Seaview. Guzman accuses Eoff of writing the bill in a way to exempt her own condo from the regulations.

“She has a conflict of interest in this legislation,” Guzman said Friday. “Barring people in other areas, especially areas with high numbers of poorer people and people of color, they will be prohibited from doing what she is doing herself.”

An email conversation Thursday between Eoff and Guzman, copied to newspaper reporters, showed Eoff first denied she had a vacation rental. Guzman was pressing Eoff to explain why she shouldn’t recuse herself from the legislation because of her own property holdings.

“I do not have — and have never had — a rental of any kind,” Eoff said in an email. “Please stop sending misinformation.”

When confronted with the record of her transient accommodations tax license, she backed off that assertion, saying she misunderstood.

“I should have qualified my response. … I do own a small condo unit at the Islander Inn which is in a Resort Zone on Alii Drive and managed by a rental agency,” Eoff responded.

Eoff said the Resort Zone is the appropriate place for the rentals. Her Bill 108 would require existing transient vacation rentals outside of the Vacation District, the General Commercial District or Resort Nodes to apply for a nonconforming use certificate in order to be grandfathered in.

Those in the allowed districts, such as Eoff, would be required to register with the county, but they don’t have to apply to the Planning Department for a nonconforming use permit.

“So you would only directly benefit because your legislation exempts people like yourself and you will even lie to constituents to hide this fact until called on your deception,” Guzman responded to Eoff. “Deeply disturbing.”

The bill, set for a Feb. 20 hearing, is creating a stir among property owners who rent out their homes through Airbnb and the like, and residents of established neighborhoods who see them overtaken by vacationers.

The bill applies to rentals of 30 days or less. It doesn’t apply to short-term rentals of a dwelling unit that is the owner’s primary residence. It also does not include “hosted rentals,” meaning transient use of a single room or sleeping area of a residential dwelling unit or guest house where the owner or operator lives on the property.

“At this point, I don’t believe there is a conflict of interest, and I am excited to hear from the public about how they see Bill 108 addressing commercial use of residential housing,” Eoff said. “I intend to disclose to the County Council the fact that my husband and I own a condo.”

Ethics boards traditionally have taken a lenient interpretation of conflicts of interest issues for state and county legislative bodies, saying as long as the elected official doesn’t derive a unique benefit or gain a greater advantage than the rest of the class of people affected by legislation, it’s not a conflict.

But Eoff’s failure to report her earnings on her annual disclosure could raise a red flag.

The instructions on the form state, “You must report the source and amount of all income of $1,000 or more received during the preceding calendar year. You must report the source of the income, the amount of income received and your occupation. For example, if you are employed by a business, then report the name of the business, the amount of income received during the preceding year, and your occupation with the business. When disclosing the source, provide the complete name (not acronyms) and the address of the business or source from which the income was derived.”

Eoff said she didn’t need to report the income because it didn’t meet the $1,000 threshold. She has been paying transient accommodations tax on the earnings since 2006, according to state Department of Taxation records.

“Our condo is listed on the financial disclosure form, however it operates at a loss and doesn’t produce income in excess of $1,000,” Eoff told the newspaper Friday. “The Financial Disclosure Form asks for annual income in excess of $1,000 and therefore no income was reported.”

That’s not how the county ethics code defines what income should be on the form, or how state Ethics Commission Executive Director Dan Gluck interprets what should go on financial disclosure forms. Both the county code and the state Ethics Commission, upon whose forms the county forms are based, say the form is asking for gross income, not net.

“‘Income’ means gross income defined by section 61 of the Internal Revenue Code of 1954,” according to the county code. The IRS code includes rents.

Rents would be considered gross income and the amount reported on the state form would be the amount that’s reported for general excise taxes, Gluck said.

“If the rent was $3,000, they would report income as $3,000,” Gluck said.

Eoff, chairwoman of the council Planning Committee, said she was given an initial draft of the legislation by the Mayor Harry Kim administration to help refine and introduce it.

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Eoff said she and the bill’s co-sponsor, Kona Councilman Dru Kanuha, spent more than six months meeting with the community, vacation rental agents, Airbnb representatives, the Hawaii Island Board of Realtors and legislators from other counties.

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

  1. Hilo Jack February 11, 2018 8:14 am

    Since when does anything ethical matter?


    1. lazerhaze February 13, 2018 5:32 am

      Ethics, morals and values went out the window when Trump got elected.


  2. Rusty Da Clown February 11, 2018 8:28 am

    Since when is one email chain with an upset constituent “coming under fire”? So Karen Eoff owns a condo in a resort district. Big deal. This is like when the guy who owns the smoke shops was coming after Dru Kanuha about his tobacco legislation. Of course he would.


    1. Hilo Jack February 11, 2018 10:26 am

      It’s a big deal when the owner of the condo is the actual one introducing legislation that benefits her directly. In other words it’s putting the fox in charge of the hen house.


      1. Rusty Da Clown February 11, 2018 12:55 pm

        It’s not benefitting her more or less than anyone else who owns a vacation rental in the properly zoned place. The guy complaining is running a vacation rental in a place where the zoning doesn’t match.


        1. Hilo Jack February 11, 2018 3:30 pm

          Perhaps maybe you have comprehension issues:

          “Eoff’s condo ownership came to the attention of Rob Guzman, who owns the
          vacation rental Bananarama Cottage in Kalapana Seaview. Guzman accuses
          Eoff of writing the bill in a way to exempt her own condo from the
          regulations.”

          “Those in the allowed districts, such as Eoff, would be
          required to register with the county, but they don’t have to apply to
          the Planning Department for a nonconforming use permit.”

          ““So you would only directly benefit because your
          legislation exempts people like yourself and you will even lie to
          constituents to hide this fact until called on your deception,” Guzman
          responded to Eoff. “Deeply disturbing.””

          Its plain to see you support Eoff. Just like a Trump supporter, you fail to see the conflict, as well as the ethics involved.

          I understand.

          Don’t agree, but I understand the blind following.

          Its the “new” norm.


          1. Rusty Da Clown February 13, 2018 8:54 am

            Is Kalapana Seaview a resort area that I’m not aware of?


          2. Hilo Jack February 13, 2018 9:36 am

            Apparently so


        2. David Currier February 11, 2018 3:46 pm

          Your statement is not correct. The “guy complaining” is operating a legal rental. She’s proposing to make his illegal but keep her own legal.


      2. Scooby February 11, 2018 1:19 pm

        The fox is Harry Kim and the county is the hen house.


  3. David Currier February 11, 2018 8:31 am

    Aside from this proposed piece of legislation being against “the little guy”‘s being able to provide desired vacation opportunities for tourists coming to Hawaii while it is supporting multi-millionaire corporations, it sets up another law which will doubtfully be enforced. Currently our sherrifs refuse to serve eviction papers on squatters. The police refuse to deal forcefully with barking dogs. Unpermitted junkyard owners are not sanctioned. Why should vacation rental owners be singled out for enforcement when they are in fact contributing to our economy and our State and County tax coffers?


    1. Citizen X February 11, 2018 12:12 pm

      David, how about looking at the true “little guys” – the thousands of economically repressed, low-earning people and their families, and the many seniors on small fixed incomes who are currently unable to find affordable housing? A “little guy” who owns enough homes to consider being an airbnb host is not among the majority, but rather part of the local elite.

      No doubt you would also rail against those who must resort to Section 8 in order to survive here. Quit disadvantaging the poor in order to line your own pockets.


      1. David Currier February 11, 2018 3:35 pm

        Citizen X – I believe that with investigation the naysayers to vacation rentals will soon discover that few vacation rentals would ever be used as longterm rentals. Hawai’i makes it impossible to evict bad tennants. Many people have rentals that also serve as guest quarters for their visiting family and friends. Face it, the State and County, collectively through our governments, has done little to provide affordable housing to low income individuals. I do not believe it is fair to expect individuals to lower their own potential incomes in order meet the housing needs that the government has not addressed. One of the large hotel chains even argued that we vacation landlords should provide low rents for their underpaid employees. How about they raise their salaries? In my lifetime, I have rented to single mothers with children, Section 8 families, etc. I sense that most vacation rentals would never be appropriate for the needy folks that you reference.


        1. Citizen X February 11, 2018 7:08 pm

          You are blind to the airbnb effects then.

          I just left a house in Kehena that had opposite it another house that was turned into an airbnb in late November. Since then it has been occupied by a rapid succession of off-island tourists. Their constant traffic in and out, their loud voices, and the sheer number of them has completely changed the feel of the neighborhood, and it totally destroyed the peace I’d known there for the previous year.

          I only had to move out because the landlords decided not to honor their written word guaranteeing me the right to extend my lease for multiple years, all so that they could sell it off at a handsome profit. A previous landlord with many properties on this island broke the emergency order prohibiting changes to leases during the lava emergency a few years ago,. She did it by lying to the court about moving into the place herself, and thus caused me the emergency move of having to move onto a property with opioid addicts and an alcoholic for six months.

          Does it take a REVOLUTION for the multi-propertied class here to see the social damage they are causing to the people of more modest means???

          Where’s the consciousness and conscience? Where’s the compassion? There’s none to be found, just selfish people taking advantage in order to profit themselves only.

          Reconsider your positions if you want to be honorable. Or does that matter at all where making more money is concerned?


        2. Steve Dearing February 12, 2018 8:12 am

          I agree one hundred percent, your evaluation is absolutely correct.


          1. F Kelly Finn February 17, 2018 12:25 pm

            Not to mention, there are no jobs or hotels in Puna. In many cases, a vacation rental is a source of income for people who need the income in an area that provides very little opportunities to earn a living.


          2. Steve Dearing February 17, 2018 3:02 pm

            Government over regulates out of greed and they are about to kill the goose that layes the golden eggs for our community. None the less, over regulation and over taxation kills businesses, families and yes jobs.


  4. metalman808 February 11, 2018 8:54 am

    Will the real slim shady please stand up, please stand up.


    1. Steve Dearing February 11, 2018 8:26 pm

      What we got is the pot calling the kettle black after lying. Not only is this hypocritical it is dishonest and hurts struggling Hawaii families that the corrupt demo rat agenda is destroying.


  5. BustaBeeBee February 11, 2018 10:23 am

    The Kona Islander currently has no rooms available for 11 nights. The price of a room is $192. Simple math would show that for the month of February, Eoff’s condo would have made $2,112. Her first instinct was to DENY that she had a vacation rental, so what else does she lie about? Dirty rotten. She should not be representing constituents if she can’t even tell the truth. She is also lying that she met with constituents and took their feedback on this matter. She’s been giving the run-around since the TVR community got wind of this bill. She was very tight lipped and wouldn’t discuss anything. Nothing but lies.


  6. Leroy February 11, 2018 12:19 pm

    Crusty old haole hag…


    1. lazerhaze February 13, 2018 5:33 am

      Sexist, racist pig.

      Now describe yourself. I dare you. WHO THE F*CK do you think you are?

      Tired, Shriveled, bigoted coward….. sounds like a good description for you.


      1. Leroy February 13, 2018 12:34 pm

        I’m not lazerhaze..keyboard asskicker with autism.

        I guess I shoulda added hypocrite to crusty ole haole hag


        1. lazerhaze February 14, 2018 1:15 pm

          LMAO. You wish you were me. You don’t even make a credible version of yourself. Keyboard warrior? Catch me outside and you’ll see a warrior and in the process you’ll meet your maker. I dare you to put a face to your words, coward. You wouldn’t last 5 min. alone with me. I’d eat you alive.


  7. Adriana Steinacker Dey February 11, 2018 1:50 pm

    The biggest mistake in this proposed legislation is that it would exempt all the transient accomodations which are being offered by online services like Airbnb in private owner occupied homes. I have been told that none of these (and there are thousands) pay any excise or transient accommodation taxes, thus depriving the state of considerable tax revenue and giving unfair competition to hotels. The County currently has no way to track these rentals. Case in point: the house next door to us used to have long term tenants in a basement ohana apartment (probably illegal itself) but now has turned into an Airbnb operation with very high occupancy. This is a large house with many bedrooms and thus could turn into an unpermitted inn. This in a quiet residential neighborhood. Bummed out in Honolii.


    1. David Currier February 11, 2018 3:43 pm

      AirBnB and most vacation rental landlords have worked diligently to develop a program with both the governor and legislature to ensure that taxes are efficiently collected. Both have refused to automate the collection of the TAT and GET. And while I believe most of us are paying our taxes, AirBnB estimates that tens of millions of dollars are on the table. So, what is not collected? But operation of legal vacation rentals and collection of taxes, while related, are separate issues.


      1. Adriana Steinacker Dey February 13, 2018 12:36 pm

        I am well aware of the efforts that are being made on Oahu to regulate the vacation rentals and collect the unpaid taxes which you admit exist. The problem is that Airbnb will only pay out a lump sum without identifying the property owners who are participating on their platform. Therefore the County would still have no way to control where these rentals are happeningd. There have been many complaints from neighbors about the proliferation of such vacation rentals and I feel that cities and counties have a right to determine what is allowed in their various zoning areas.

        It does annoy me that so many people can get away without paying their taxes on short term vacation rentals. We own a coupld of condos in Hilo and Honolulu and our property managers pay all the taxes that are due for us. We only rent long term.


  8. siphon February 11, 2018 4:03 pm

    Airbnb scum need to be driven out of residential neighborhoods on the island; vacation rentals belong in Inns and hotels, not in residential housing that is badly needed for people that actually live here year-round. Millionaire investors own a lot of the vacation rentals and make huge amounts of money on them, from the mainland. If you aren’t interested in renting to locals, then sell off your excess housing and get a real job.


    1. Citizen X February 11, 2018 7:13 pm

      Three cheers for all of that!


  9. Fanny Budd February 11, 2018 8:09 pm

    It’s valued at $89,800 for tax purposes, five identical units are listed for sale from$135,000 to $159,000 ???????


    1. Frances O'Leary February 11, 2018 8:26 pm

      Good point. Taxation being manipulated also?


    2. Steve Dearing February 12, 2018 8:16 am

      The corrupt demo rats at work.


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