Do We Really Need This?

I love Harry Kim. I mean, who doesn’t? At the recent wastewater meeting, he offered a sensible approach to the biggest issue our county faces (in my opinion).

Concerns About the Transient Accommodation Rental Bill

However, his support of the proposed Transient Accommodation Rental bill (Hawaii Tribune Herald 2/25/2024) needs a deeper dive. Unfortunately, there’s not enough room here to explain all the ways this bill is misguided.

Implications of the Proposed Bill

In short, the county is proposing rules that regulate every rental of any kind under 180 days. Registration, regulations, and county reporting will apply. Registration is not cheap, and violations of the confusing rules are crazy expensive. Renting any portion of your principal residence increases your tax rate and decreases your homestead exemption. If renting short term, you can now also add Transient Accommodation Taxes to the mix.

Examples of Unintended Consequences

Here are a few examples of situations with potential unintended consequences:

• Want to rent your OHANA or guest house?
• Going on sabbatical for 3 months and want to rent your house?
• Like to travel and think you’ll have someone rent the spare rooms while you are away?
• Want to rent your grown kids’ room?

Increased Costs Passed Onto Tenants

In any case, it will cost at least $725 registration along with the aforementioned increase in the tax rate, decrease in the homestead exemption, elimination of the 3% homeowner’s tax cap, and the required TAT payment – all charges passed on to the tenant.

Questioning the Effectiveness

Like Bill 108 (licensed vacation rental rules), one of the stated purposes of this bill is to increase long-term rental availability. So far, there is no proof that STVR rules have accomplished this purpose. In my mind, the most direct consequence of Bill 121 is the further erosion of our real property rights.

Public Response and Further Action

During the recent County Council hearing, only 2 testified in support of this bill but over 50 were in opposition, and yet it was still forwarded to the Windward Planning Commission. We need to spend time on wastewater (directly affects housing affordability), homelessness, and other critical issues, but I’m not sure we need this.

Feel free to be further confused by looking at www.HawaiiCountyTar.com. Let me know if you think we really need this.