The Big Island’s vacation rental industry could be in for a shakeup this year under a series of new bills to be discussed over the next several months.
The Hawaii County Council’s Policy Committee on Planning, Land Use and Development on Tuesday will unveil Bill 121, a measure that will establish new regulations on transient accommodation rentals, or TARs, throughout the county.
The bill follows a 2018 measure, Bill 108, which established regulations and conditions upon unhosted short-term rental units, prohibiting them in certain areas in an effort to preserve the privacy and quiet atmospheres of residential neighborhoods.
But Hamakua Councilwoman Heather Kimball, co-introducer of Bill 121, said more modifications are needed to address hosted TAR units.
Bill 121 would overhaul the county code and establish different conditions for owner-hosted, operator-hosted and unhosted TARs, and requires all TARs rented for less than 180 days at a time to be registered with the county.
“We’re trying to do three things here,” Kimball said. “First, we need to get all of these rentals up to the same standards. … Second, there’s been a big push to maintain the character of the island. And third, we need to address pressures on the housing market.”
Kimball said the influx of TARs in residential areas is one of the top three issues raised by her district’s constituents, explaining residents have a strong desire to “keep country country,” and many are frustrated by a lack of enforcement options for ensuring good behavior by renters.
Under the bill, owner-hosted TARs can be established and registered at any time and in any zoning district so long as the unit meets all safety and code requirements and if the owner lives on the property as their primary residents. Operator-hosted units, meanwhile, would be permitted in resort and commercial zones only, although existing units outside of those zones would be grandfathered in.
Unhosted TARs also would be permitted in resort and commercial zones, but no exceptions or grandfathering would be permitted. The bill also would not allow ‘ohana units to be established as TARs, save for grandfathered units on hosted TAR properties. The measure includes a list of TAR operation standards, including “good neighbor standards” that limit gathering sizes, only allow breakfast meals to be offered to guests at hosted TARs, establish quiet hours, require off-street parking, and more.
Registering a TAR with the county would cost between $500 for owner-hosted TARs, $750 for operator-hosted units, and $1,000 for unhosted units. However, all TARs would be subject to the same fines for violations: $2,500 for a first violation, $5,000 for a second, and $10,000 for the third and subsequent violations.
Kimball said the bill is not intended to be overly punitive and has been devised to make the registration process straightforward and the standards clearly measurable. But TAR owners and operators are likely to push back against the measure at this Tuesday’s meeting.
“I struggle to understand, barring a pending apocalypse, why they would do this,” said Joshua Montgomery, president of the Ohana Aina Association, an organization advocating for the island’s transient rental operators. “It’s already so hard for anyone to afford to live here. Why make it harder?”
Montgomery said the bill as written would force many rental owners out of business. Because unhosted TARs outside of resort or commercial zones can’t be grandfathered in, any whole-house rental that is rented out for terms between 30 and 180 days would not be allowed.
A 2023 study by the University of Hawaii Economic Research Organization estimated 7.8% of all of the county’s whole-house rental units are being used as TARs. While Kimball cited this statistic as an indication of the impact the vacation rental industry has had on housing costs, Montgomery said that number represents thousands of property owners whose livelihoods will be threatened by the bill.
“There’s a lot of retirees, people on fixed incomes, who are worried about this,” Montgomery said, adding that TAR owners also employ local staff whose jobs also will be in danger under the bill.
Montgomery added that he feels the measure was not drafted with any real consultation with TAR owners or any economic impact studies, saying it was “like doing a major surgery without doing an X-ray first.”
Kimball said there will be time to address community members’ concerns during the bill’s progress through the County Council.
Should there be a favorable vote during Tuesday’s committee meeting, which begins at 1 p.m., the bill will go before both the Windward and Leeward Planning Commissions before returning to the committee a second time and then, ultimately, to the full council for two separate readings.
This process, which Kimball said will optimistically take about six months, will provide at least six opportunities for public comment that can address concerns about the measure.
Those meetings stand to be contentious, though. Montgomery said he has drafted a petition against the bill that has more than 1,600 signatures.
Email Michael Brestovansky at [email protected].