Vacation rental rules updated

After taking community input during two public hearings last month, the county Planning Department last Wednesday published what may become its final draft of rules regulating short-term vacation rentals.

“I think this first go-round on a very complex situation, we really tried to find a balance point between vacation rentals and residential uses,” Planning Director Michael Yee said Friday.

The department has scheduled a final public hearing for 6 p.m. April 2 at Aupuni Center in Hilo to air the changes before approving the draft, located at www.hiplanningdept.com/short-term-vacation-rentals.

Those suggesting further changes to the language should send or deliver them by Friday (March 29) so they can be considered in time to have a final draft complete before the meeting, Yee said.

Suggestions can be emailed to planning@hawaiicounty.gov or delivered or mailed to Aupuni Center, 101 Pauahi St., Suite 3, Hilo, HI 96720.

The most notable change is the removal of language that would have required the planning director to help restore the number of vacation rentals if a significant number of them are lost during a declared emergency. This was language added to the bill by former Puna Councilwoman Eileen O’Hara, who worried that vacation rental owners operating with a nonconforming use certificate wouldn’t be able to rebuild if their building was lost to lava or some other disaster.

While Yee had resisted adding the language to the bill, telling council members it would best be handled in the rules, he has since reconsidered that stance and said last Friday the rules can’t provide for every eventuality. Instead, he said, that issue can be addressed as needed under emergency proclamations.

Other changes, in addition to a number of housekeeping measures and reorganization of sections of the rules, include an attempt to address specific cases where a vacation rental owner in a nonconforming zone has temporarily ceased operations during an emergency and then reverted back to a vacation rental operation.

Some regulations were tightened to give the planning director less discretion by spelling out rules relating to the handling of complaints and processing of applications.

Airbnb, one of several vacation host platforms operating on the island, was active in submitting testimony as the bill creating the vacation rental ordinance wended its way through several years of council meetings, the Leeward and Windward planning commissions and eight drafts before becoming finalized.

“We are still reviewing the latest draft of the regulations for Bill 108 but appreciate the county’s efforts to update the rules.” Matt Middlebrook, Airbnb Hawaii public policy lead, said in a statement.

Some rules that were the focus of opposition during public hearings weren’t changed because they are required by existing state or county laws. For example, publishing the address of a vacation rental in a nonconforming zone and requiring notifications to neighbors and in the newspaper were left unchanged, as was the prohibition of vacation rentals in state-designated agricultural lands.

Yee said it’s a “slippery slope” to allow unchecked vacation rentals on agricultural land, judging from community opposition to many developments on the island.

“If there are folks that want agricultural land to be vacation rentals, I feel the way communities are voicing their concerns, it could be an interesting fight,” he said.

The county, as a next step, could establish “vacation destination zones,” asking the state Land Use Commission to rezone certain agricultural areas to urban, to allow vacation rentals in areas that don’t have hotels or resorts but are attractive to visitors, Yee said.

The county expects to collect $800,000 from vacation rental registration fees and fines during the fiscal year that starts July 1. The money is expected to be used to hire temporary workers and purchase software. The County Council is set to vote Thursday on Bill 41, appropriating the money.

In addition to fees and fines, the county coffers will benefit from the local surcharge on the general excise tax, which is one-quarter cent on the dollar until Jan. 1 and then goes up to one-half cent. Hawaii County doesn’t get a share of the transient accommodations taxes collected from the Big Island, although Honolulu does.

Vacation rentals are defined as dwelling units where the owner or operator does not reside on the building site, that has no more than five bedrooms for rent and is rented for a period of 30 consecutive days or less.

The bill prohibits short-term vacation rentals in residential and agricultural zones, while allowing them in hotel and resort zones as well as commercial districts. Existing rentals in disallowed areas would be grandfathered in after obtaining a nonconforming use certificate.

All vacation rental owners in existence as of April 1 will be required to register their property by Sept. 28 and pay a $500 fee, showing that transient accommodations taxes, general excise taxes and property taxes are paid in full. Short-term vacation rentals may be established only within a dwelling that has been issued final approvals by the Building Division for building, electrical and plumbing permits.

The nonconforming use certificate for those preexisting in disallowed areas must be renewed annually, at a cost of $250.

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