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Like many people on the Big Island, I have been an active participant in the campaign against Bill 108, the punitive and restrictive bill that was put forth by the mayor in order to shut down vacation rentals on the island.

While taking part in what I had hoped was a fair and democratic process, I testified in person or submitted testimony to nearly every County Council and Planning Commission meeting concerning this issue. Since Bill 108 passed the County Council with a blatant disregard for any and all testimony submitted by owners of short-term vacation rentals (STVR), I took it upon myself to do more research into the matter.

The Planning Commission and County Council of the Big Island of Hawaii have been nothing more than pawns in the war being waged by the lobbying arm of the hotel industry against the vacation rental market of the United States in order to protect their market share and profits.

In 2017, the American Hotel and Lodging Association, a lobbying arm of Marriott, Hilton and Hyatt hotels, had several documents leaked to the New York Times concerning to take down Airbnb and STVRs. The main prongs of the plan to constrain Airbnb included:

• lobbying politicians and state attorneys general to reduce the number of Airbnb hosts;
• funding studies to show that Airbnb is filled with people who are running hotels out of residential buildings;
• highlighting how hosts do NOT collect and pay taxes; and
• showing that hosts are not subject to the same safety and security regulations that hotel operators must follow.

The American Hotel and Lodging Association has an annual budget of $5.6 million dollars for regulatory work to pay off politicians and lobby for their cause.

The association also met with legislators and attorneys general in dozens of other states to “discuss” how Airbnb hosts often do not comply with rules imposed on hotels; like anti-discrimination legislation, local tax collection laws, and safety and fire inspection standards. In some markets, the group said, Airbnb is dodging payment of local lodging taxes.

It should be pointed out that sharing a room in your home does not make you a hotel. Longterm rentals are required, by law, to pay general excise taxes. The mayor, County Council, and Planning Commission are not going after longterm rentals for lost revenues or vilifying them in the press.

In other places, the hotel industry encouraged officials not to collect taxes from Airbnb hosts so as not to legitimize short-term rentals. This was the reason Gov. David Ige used as to why he did not agree to Airbnb collecting taxes on behalf of hosts in Hawaii.

Per the same New York Times article, the association planned to “roll out a testimonial campaign of people hurt by home-sharing.” The campaign would be a cornerstone of the … strategy. The hotel lobby also joined forces with neighborhood groups and unions.

They sought help with politicians in Washington — namely, Sen. Brian Schatz of Hawaii (along with Elizabeth Warren and Dianne Feinstein). Sen. Schatz, after hearing directly from the hotel lobby, sent a letter to the Federal Trade Commission “raising concerns about the short-term rental industry.” Shortly thereafter, Gov. Ige and Honolulu Mayor Kirk Caldwell proposed additional regulations to STVRs on Oahu.

The other islands soon followed. Our illustrious mayor, Harry Kim, gave a bill to Council members Karen Eoff and Dru Kanuha that the majority of the public did not support. Former Council person Eileen O’Hara says that “(Mayor) Kim instructed his staff to draft Bill 108.

They roped in the two Kona representatives to sponsor since most of the negative impacts have been to the Kona side.

“The Council, the mayor and Planning Commission have failed citizens and been used as dupes.”

Make no mistake, Bill 108 was drafted by the Planning Department.

The council ignored any and all suggestions from STVR owners to work toward a bill that satisfied everyone. They disregarded illegalities within the bill that were continually pointed out to them like this one: Laws must be consistent with the Hawaii State Constitution and the Taxpayer Bill of Rights, which are guaranteed to all people.

Transient accommodation operators should not be deprived of these fundamental rights. Since the counties do not administer the tax collection function that the Department of Taxation does, it is not appropriate that they be deemed entitled to private information of taxpayers.

The Rights Of Taxpayers

Bill 108 is requiring that STVR owners prove tax compliance by showing their tax returns to county workers; a violation of the Taxpayer Bill of Rights. It provides: “Taxpayers have a right to be assured that their dealings with the Department of Taxation will be kept confidential. Taxpayers have a right to be assured that their tax returns and tax information will not be disclosed.”

The State of Hawaii Constitution provides “the legislature shall take affirmative steps to implement the right of the people to privacy” and “The right of the people to be secure in their persons, houses, papers and effects against unreasonable searches, seizures and invasions of privacy shall not be violated.”

Operators of STVR should not be excluded and disenfranchised from these protections afforded all other taxpayers. This information should only be obtainable through proper subpoena power.

Phasing out conforming units and possibly, non-conforming units, would equate to a “government taking” and therefore property owners would be entitled to just compensation. It should also be pointed out that to adopt a law that eliminates the conforming use of single-family homes in any zoning classification would be a breach of public trust in government who has made this activity legal since the 1960s.

The following data from a study by the Hawaii Tourism Authority provides context for how relevant the vacation rental market is:

• one-third of visitors surveyed indicated they chose to stay at home and vacation rentals because it enables them to stay outside of traditional hotel zones and because they enjoy the greater individuality;
• the two most common reasons for using home or vacation rentals are the relatively lower cost and more flexible/larger accommodations, which suggests those travelers would be less likely to travel to Hawaii if this option were not available;
• 61% of visitors surveyed paid less per night for home and vacation rentals than the state’s hotel average daily rate;
• 15% of respondents indicated they would not have made the trip (to Hawaii) had it not been for the alternative accommodations option; and
• This proportion is deemed to represent induced demand resulting from the existence of the home/vacation rental market.

It has been abundantly clear that there has been no democracy in action concerning Bill 108. It is irrelevant that the Hawaii Tourism Authority’s own studies are showing that short-term rentals are good for Hawaii.

The Council, the mayor and Planning Commission have failed citizens and been used as dupes. Harry Kim has treated the Big Island like an oligarchy. The Council followed both his and the Planning Director’s guidelines exactly. Public testimony was only for show. The hotel lobby, and their $5.6 million budget, wrote — and passed — Bill 108.