Hawaii Real Estate Blog

by http://www.kokuacoalition.com/legislativeconceptsdoc.htm 

Overview

In 1989, the City and County of Honolulu outlawed the creation of new bed and breakfast homes (B&B) and Transient Vacation Units (TVU). Owners of B&Bs were given the opportunity to offer proof of operation prior to December 28, 1989 in order to obtain a nonconforming use certification. Owners of TVUs had to prove that the use was in existence prior to October 22, 1986 and had continued as a TVU through December 28, 1989 to obtain a nonconforming use certificate. Today there are 940 nonconforming use certificates issued to TVUS and 60 nonconforming use certificates issued to B&Bs. This is in stark contrast to the February 23, 2005 Hawaii Tourism Authority study that found 1,923 B&Bs and TVUS on Oahu.

As indicated by the current number of operating vacation rentals on Oahu, the solution to the issues brought up in relation to this type of visitor accommodations cannot be solved by prohibiting the use. Reasonable and enforceable regulation needs to be established to allow the licensing of transient vacation units and bed and breakfast homes while providing clear guidelines that ensure that these rental uses do not adversely impact the character of the neighborhoods in which they reside. The Kokua Coalition was formed to advocate for the industry and its mission is to work with the City and County of Honolulu to reach a solution that will provide the City the ability to enforce the law and allow this essential visitor accommodation use to exist in Oahu.

Proposed Legislation

The proposed legislation sets out to fulfill the need for reasonable regulation by specifically detailing the duties and obligations of the B&B and TVU owner to ensure that there is no room for misinterpreting what the requirements are by the owner, the public, and the county. There are three key components which are: 1)Permitting Procedure; 2) Conditions of Operation; and 3) Enforcement.

Permitting Procedure

Establishes the ability for TVUs and B&Bs to obtain a permit to operate within clearly stated guidelines that ensure a safe environment for visitors to the State and the local community. Licensing fees and renewal fees collected by the City will go towards the cost of administering and enforcing the proposed ordinance.

•  Completed and signed Transient Vacation Unit/Bed and Breakfast Home Permit application

•  An inspection of the dwelling and premises is required to ensure the safety of the tenant and the owner will be charged a minimum inspection fee of $200. The following requirements will be evaluated upon inspection of each unit, and shall constitute minimum requirements. The unit must be brought into conformance with these requirements and any other applicable codes and ordinances prior to the issuance of a permit.

1. Smoke detectors shall be installed within each sleeping room and at a point centrally located in the corridor or area giving access to each separate sleeping room.

2. The unit shall be equipped with a minimum of one fire extinguisher with seventy-five (75) feet of travel distance to all portions of the structure; at least one such extinguisher is required per floor. Fire extinguisher(s) shall be mounted in visible locations with the tops of the fire extinguishers mounted between three and five feet above the floor, and shall be accessible to occupants at all times.

3. All swimming pools must be properly enclosed as described in Section 16-16.2.

4. Any locking mechanism on exterior doors must be operable from inside the unit without the use of a key or special knowledge of effort. If the dwelling unit is greater than three thousand (3,000) square feet in area, two exit doors shall be required, each of which shall conform to this requirement.

5. Units shall be maintained in a clean and sanitary condition and free from hazards.

6. There shall be no exposed wiring or overloaded electrical circuits.

7. There shall be no leaking potable water fixtures, or clogged or leaking wastewater lines.

8. Faucets and fixtures shall be maintained in working condition.

9. Showers, sinks and bathing facilities shall be clean and shall drain properly.

10. There shall be no evidence of pest infestations.

11. There shall be no accumulation or storage of trash and/or debris on the site or within the unit; trash shall be removed from the premises on solid waste collection days or within 48 hours upon any tenant departure.

12. All steps, stairways, decks, and railings shall be stable and structurally sound and regularly maintained.

13. All appliances, including but not limited to kitchen appliances and water heaters, shall be operational.

14. Exits shall remain clear of storage, debris, or impedance at all times.

15. Parking shall be provided on-site to meet the occupancy of the unit at a ratio of not less than one parking space per two vacation unit designated bedrooms.

16. Outdoor signs or displays are prohibited.

•  The permit is issued for a period of 2 years and the owner will be assessed a minimum $500 per vacation unit designated bedroom.

•  Licensing renewal should be subject to a review of compliance and complaints, as established in the ordinance.

•  Compliance with State tax law, general excise tax and transient accommodations tax will be required as part of the application process.

Conditions of Operation

Establishes conditions of operations for owner and property managers by which they must abide by. These include:

•  A local contact person be available at all times to address any complaints made by neighbors. Their contact information will have to be accessible by law enforcement and the public. Failure to respond to complaints in a timely manner will not go unpunished.

•  Non-compliance and excessive disturbances or nuisances will be punishable by civil fines.

•  License requirements would establish standards for property safety, parking, trash management, noise abatement and other provisions, similar to existing building codes and standards, where applicable.

These objectives are achieved by the following:

1. The owner, managing agency or agent shall limit occupancy of the tourist home to the specific number of occupants designated in the permit; with the number of overnight occupants not to exceed two (2) persons per bedroom meeting building code requirements. In no case may the occupancy of a transient vacation unit exceed sixteen (16) people.

2. The owner, managing agency or agent shall limit the number of vehicles for overnight occupants to the number designated in the permit and shall not exceed the number of designated required parking spaces.

3. The local contact person upon notification that occupants and/or guests of their transient vacation unit have created unreasonable noise or disturbances, engaged in disorderly conduct or violated provisions of Ordinance or State law pertaining to noise, or disorderly conduct, or other nuisances, shall promptly abate such problems and prevent a recurrence of such conduct by those occupants or guests. This entails:

A. A local contact person or persons shall be available by telephone on a twenty-four (24) hour basis, seven days a week to respond in a timely manner to calls regarding the condition and/or operation of the unit.

B. Responding in a timely and appropriate manner shall mean that a response by the local contact person to an initial report shall be made within one (1) hour of the time the call was made, and corrective action shall be commenced to address any violation of this section within two and half (2 ½) hours of the initial report.

C. Failure to respond to calls in a timely manner may result in revocation of the Transient Vacation Unit Permit authorizing the use, as determined by the department.

D. The owner, managing agency or agent of the Transient Vacation Unit Permit shall post a copy of the permit and a copy of the conditions set forth in this section, including safety and exit provisions, in a conspicuous place within the transient vacation unit. This document should also contain the following information: (1) name and telephone number of the local contact person; (2) contact information for the department and the Honolulu Police Department; (3) the maximum number of occupants permitted to stay in the dwelling; (5) the maximum number of vehicles allowed to be parked on the property; (6) the number and location of on-site parking spaces; (7) the solid waste collection day(s); (8) notification that an occupant as a person responsible for an event, may be cited and fined for creating a disturbance or for violating other provisions of this ordinance; and (9) notification that failure to conform to the parking and occupancy requirements of the structure is a violation of this ordinance.

E. The owner, managing agency or agent shall be responsible for compliance with all applicable ordinances regarding fire, building and safety, health and safety, and other relevant laws.

F. The department shall have the authority to impose additional standards and conditions as necessary to achieve the objectives of this ordinance.

G. The transient vacation unit may not be used for commercial receptions, parties, or other public gatherings, or for the serving of meals to non-resident guests for compensation.

Enforcement

A necessary component of reasonable regulation is the ability for the county to enforce the law. The monetary sanctions are substantial amounts and the intent is to discourage violation of the law. If the county provides reasonable regulation via the ability to obtain a permit, the owners in good faith must reciprocate by following the law. Sanctions include:

•  Operation without a TVU permit or a B&B permit will result in a fine of $1,000 for the first violation and a fine of $2,000 for the second violation.

•  In addition, the city is empowered to assess civil fines for the failure to comply with the provisions of this chapter.

If the Department of Planning and Permitting determines that any owner, managing agency or agent is not complying with a notice of violation, the Department may have the party responsible for the violation served, by mail or delivery, with an order pursuant to this section.

The order may require the party responsible for the violation to do any or all of the following:

1. Correct the violation within the time specified in the order;

2. Pay a civil fine not to exceed $1,000.00 before the date specified in the order;

3. Pay a civil fine not to exceed $1,000.00 per day for each day in which the violation persists, specified in the order.

We also ask consideration of a moratorium on enforcement until 90 days after the City and County of Honolulu establishes policies and procedures for the issuance of TVU and B&B permits. This will allow ample time for the industry to comply with the law.

Conclusion

Reasonable regulations encourages owners, property managers, the community, and government to coexist in a mutually beneficial manner.

Pacific Business News (Honolulu)

Hawaii-American Water Co., which provides water and sewer service to Hawaii Kai, is proposing rate increases of up to nearly 17 percent for business and residential customers.

In advertisements Friday, the company said it is asking the Hawaii Public Utilities Commission to approve the increases to generate an additional $1.3 million a year or about 15.9 percent more in revenue to help pay for system improvements. The last rate increase was in 2006.

The biggest increases would be for homes, apartments, condominiums and non-food service businesses.

The rates proposed by the company are:

• Single-family residential units currently pay $54.55 and would increase 16.7 percent to $63.65;
• Multi-family residential units would increase 16.7 percent from $45.75 to $53.40;
• Commercial food service units would increase 8.7 percent from $13.10 to $14.24 per thousand gallons of water;
• Non-food service operations would increase from $7.90 to $9.20 per thousand gallons of water, up 16.5 percent; and
• Publicly owned dwellings would increase 11 percent from $2.93 to $3.26 per thousand gallons of water.

The company will hold a public hearing on the rate request on Jan. 7 at the Hahaione Elementary School cafeteria at 6 p.m.

Hawaii-American Water Co. is a subsidiary of New Jersey-based American Water.

On the Web: www.hawaterco.com

During November, sales of 245 single-family homes and 379 condominiums were reported through the Board's MLS, a decrease of 16.4 percent for single-family homes and 10.0 percent for condominiums, compared to the same month last year. This brings total single-family home sales on Oahu to 3,387 for the first eleven months of 2007, a decrease of 8.3 percent over the same time period one year ago. Total condominium sales through October were 5,146, a 13.1 percent decrease from last year. The year-to-date median prices paid for Oahu properties in the first eleven months this year were $645,000 and $325,000, respectively, increases of 2.4 percent and 4.8 percent over the 2006 prices of $630,000 and $310,000. The total dollar sales volume generated in the housing market for the first eleven months of the year was $4.650 billion, a decrease of 7.5 percent or $376 million, compared to the $5.026 billion produced one year ago.

 There is a no change in Single Family Homes Median Sales Price from last year, while a 1.6% increase in Condominium Median Sales Price in November 2007 compared to the same month last year.

There is a 16.4% decrease in Single Family Homes Sales Volume from last year; and, a 10.0% decrease in Condominium Sales Volume in November 2007 compared to the same month last year.

"The number of units sold have been declining, and inventory went up a bit which leads us to believe that seller pricing is going to be key in getting a house sold in today's market" said Berton Hamamoto, President of the Honolulu Board of REALTORS®. "Buyers have more choices now and mortgage rates are still low, so it's actually a good time for buyers to purchase a home."

"Financing continues to be more favorable as fixed-rate mortgages slide to near 5.5 percent. Predictions are that there will be another quarter-percent drop in the federal funds rate by the Federal Reserve at their December 11 meeting and, if this occurs, could further reduce mortgage costs," added Harvey Shapiro, Research Economist at the Board of REALTORS®."

*Source: The Honolulu Board of REALTORS®

If weather permits, Hawaii Superferry's vessel Alakai will travel from Honolulu to Maui's Kahului Harbor Tuesday to realign with a docking pier and barge.

The facilities were damaged during a recent storm, but have since been repaired by the Hawaii Department of Transportation.

Maui staff and crew also will train in preparation for Thursday's relaunch of Oahu-Maui service.

Superferry is offering promotional fares of $29 one way for passengers and $55 for vehicles.

Some Maui environmental and harbor users groups have said they will protest the Alakai's return.

The U.S. Coast Guard will have a 100-yard security zone in place to prevent any ferry protesters from disrupting service.

The median price of a single-family home on Oahu remained steady last month as sales fell more than 16 percent, according to figures released Monday by the Honolulu Board of Realtors.

The median price of a house in November was $610,000, the same price as in November 2006, but about 7 percent down from October's price of $655,000. It was also the lowest median price since January, when the median price was $600,000.

The 245 homes that sold last month reflected a 16.4 percent drop from the 293 homes that sold during the same month last year. Year-to-date, sales are running more than 8 percent behind 2006.

"The number of units sold have been declining, and inventory went up a bit which leads us to believe that seller pricing is going to be key in getting a house sold in today's market," said Berton Hamamoto, the board's president. "Buyers have more choices now and mortgage rates are still low, so it's actually a good time for buyers to purchase a home."

The number of condominiums sold fell 10 percent when compared year over year, with 379 units sold during November compared to 421 units sold during the same month last year. Sales during the first 11 months of the year are 13 percent lower than the same period in 2006.

The median price of a condo, however, was slightly up at $315,000, compared to $310,000 during November 2006.

"Financing continues to be more favorable as fixed-rate mortgages slide to near 5.5 percent," said Harvey Shapiro, the board's research economist. "Predictions are that there will be another quarter-percent drop in the federal funds rate by the Federal Reserve at their Dec. 11 meeting and, if this occurs, could further reduce mortgage costs."