This FAQ document is intended to respond to some of the most frequently asked questions in regard to a proposed bill that would amend the transient accommodations law in Hawaii County. Please note that this bill continues to be developed and there will be adjustments made to these FAQs as the proposed language is amended.

Why is this TAR bill being proposed?

The purpose of this bill is twofold. First, the bill is meant to ensure that all TAR operations in Hawaii County are legal, safe,and followingstandards of operation so that they are not disruptive to the neighborhoods where they are located.

The second reason for the bill is the due to the impact that TARs have on the housing market. TARs reduce the inventory of housing available for residents and increase area housing costs and rents. Hawaii County has a significant problem with the availability of housing and this bill is intended to reduce speculation by outside investors on our island.

Additionally, we would like to make it easier for people to develop additional housing units in some areas for long term housing but if these are just converted to TARs we will not make any improvements to the housing situation.

Does this bill shut down all TARs outside of the resort zones?

No. We recognized that this would not be appropriate for Hawaii County for two reasons. First, we recognized that for homeowners renting out a portion of their property was an important source of income, and we have many areas of the island that don’t have resort zones and don’t want them.

We have tried to take a more balance approach. The bill proposes allowing residents to continue operating or to start a TAR on their property at any time as long as it is their primary residence, and they register. The bill also grandfathers in all existing hosted rentals that are managed by an onsite operator that is not the homeowner.

Do I need a licensed broker to manage my vacation rentals if I own multiple rentals?

If you manage multiple properties owned by different owners, then according to state law you need a realtor’s license. However, if you own more than one property or manage more than one property owned by a single person you do not need a realtor’s license.

If I have an Ohana or guesthouse, can I live in the main dwelling and rent out the Ohana or guesthouse?

Yes, under the proposed legislation, you can live in the main dwelling and rent out an ohana or a guesthouse with a nonconforming use certificate and if you have registered you TAR.

If I have an Ohana or guesthouse, can I live in the Ohana or guesthouse (or detached bedroom) and rent out the main house?

The proposed bill does not currently address the requirement that the property owner live in any particular dwelling on the property. This is something that we plan to clarify in future drafts. Guesthouses and detached bedrooms are not permitted to have kitchen facilities, so we are considering language that the homeowner not live in either of these if renting out the main home. Living in Ohana or additional farm dwelling would be permitted.

Do I have to CPR if I have a condo in a commercial or resort zoning to have multiple TARs if only one owner of all units?

No, but it is required in RM zoning.

Can I add additional bedrooms to my approved unhosted or hosted TAR?

One suggested amendment to the bill we are taking under consideration is an allowance for a “Change in Information” which would allow for a change in the number of rented bedrooms as long as those bedrooms are properly permitted.

Is there a limit on bedrooms allowed?

There is not a limit on the number of bedrooms under the current proposal.

How many hosted rentals currently exist?

Because hosted rentals are currently unregulated, we do not have an accurate number of the hosted TARs that exist. Below is the current number of TARs registered by district. Some of these may be hosted as some people chose to register hosted TARs although they were not required to register.

• Puna  = 324

• S. Hilo = 126

• N. Hilo = 12

• Hamakua = 7

• N. Kohala = 11

• S. Kohala = 1713

• N. Kona = 2110

• S. Kona = 71 

• Kau = 67

How many complaints did the county receive this year about TARs?

The planning department received the following formal complaints:

• Hilo had 27 TAR complaints for 2022

• Kona had 38 TAR complaints for 2022

The public works department also receives complaints but these are not tracked. Unless the complaint has to do with permitting of structures these are referred to the planning department. The department will begin to track these complaints. Additionally, council district offices often receive complaints. If rental is unhosted it is referred to the planning department. Since hosted rentals are currently unregulated those complaints are not referred or tracked.

For hosted rentals, can you charge the fee per bedroom so that a hosted rental with more bedrooms pays more than one with less bedrooms?

This is a possibility. Additionally, another amendment that we are considering is the possibility of adjusting both the fees and fines to be proportional to the income generated TAR.

How will property taxes be affected for hosted rentals?

The proposed legislation does not impact property taxes from the standpoint that the Real Property Tax Code (Chapter 19) already addresses it. Under current property tax law, properties that are operated as TARs are not eligible for the homeowner’s tax rate and the homeowner’s exemption is applied proportionally. For example, the new homeowner’s exemption starting in 2023 is $150,000. If you use half of your property as a TAR you will get a $75,000 exemption instead of the full amount. While this language is in the proposed bill, it was only repeated there so that people would be fully aware of the tax implications of operating a TAR. Please see the FAQ from Real Property Tax Here.

How does this change affect properties in agricultural zones?

The proposed bill allows for TARs on properties that are the primary residence of the owner, regardless of zoning, if they register. It also grandfathers in any hosted rentals that are not the primary residence of the owner that were in operation as of November 2022. While the proposed bill does prohibit the use of “additional farm dwellings” as TARs it should be noted that this is already prohibited by the law. When a permit to develop an additional farm dwelling is granted an agreement is recorded that the additional farm dwelling will only be used for activities related to the farm.

One amendment we are evaluating is an exception for the housing of temporary or migrant farm workers.

Can a NUC hosted TAR be transferred?

 Yes, a NUC for a hosted rental can be transferred with a change in ownership form and as long as this is completed within 90 days of the sale and the proposed non-conforming use is the same. For example, a hosted rental that is the primary residence of the current owner can be transferred to someone else who plans to use it as their primary residence, however it is not transferable to someone who does not plan to use it as a primary residence.

What happens to already STVRs and NUCs that were registered and granted under the previous law?

There will be no change for current STVR and NUC holders except that they will be required to renew their registration annually and comply with the new standards of operation and penalty structure.

Are there any other options besides registering as a TAR?

Yes. If the property is your primary residence and you are renting out less than 5 bedrooms you might consider getting a Bed and Breakfast permit. of getting a Bed and Breakfast permit. This permit requires a $500 one-time application fee and a hearing by the planning commission. Once you have received this permit there is no requirement for an annual renewal and the permit can be transferred to a new owner if they also plan to use the property as their primary residence. Homeowners should also thoroughly investigate tax, insurance, and mortgage loan implications before considering this option.

When will this bill become law and how can I comment on the proposal?

This bill is a long way off from becoming law. In fact, it has not even been formally introduced yet. We knew that there would be a lot of feedback on the proposed bill and that is why it was put out to the public for comment before it has even started the formal process.

Once public input has been gathered the bill will be introduced in a public hearing at a Council Committee. This first hearing will refer the proposed bill to the planning commissions. Both the Windward and Leeward planning commissions will hold public hearings on the bill. They will then send the bill back to the Council Committee with their recommendations. This committee meeting will be another public hearing. The bill may stay in committee for additional hearings or advance to the Council where it will get a minimum of two more public hearings. All told there will be a minimum of six public hearings once the formal process begins.