Island of Hawaii Real Estate and Community News

Feb. 20, 2024

Tax Season is Upon Us

Ahh, tax season is now approaching for the year of 2023.  This can conjure up a mixed slate of emotions and feelings for all involved.  I view the approaching season as being similar to walking through a haunted house. Options include walking through with our eyes closed, or just embrace the highs and lows of the experience as a whole. We can collect our receipts (or not if you forgot to) and take them to the local tax professional, we can evade them (this is not an advisable option at all), or we buckle in and try to play the game.  If you so choose to saddle up this edition of the Island Land Companies Blog is for you. 

I am going to go out on a limb and assume that taxes are nobody's favorite thing, but I am sure we all enjoy the roads that we drove on this morning and we did enjoy public pools, parks, and other government funded amenities.  The list goes on and on. Taxes are such a polarizing topic, are we taxed too much? Are our tax dollars landing in the right places? Is everyone taxed fairly?

I am not here to answer any of these questions today, but if you want an answer consult your tax professional and maybe write a letter to your local legislature?  I am just here to offer my two cents on the situation.  To paraphrase a quote from the book Rich Dad Poor Dad, written by Robert Kiyosaki. ‘Taxes are a game,’ this may seem like I am minimizing the concept but hear me out.  Taxes are a game with real consequences and real benefits.  The game has a rule book that is written out across 6,871 pages (IRS tax code).  That is a lot of reading, take it from someone who had a reading level of a 6th grader at the time I graduated high school (according to my standardized test score). 

Don’t worry I have since made considerable efforts to increase my reading level since.

But, this game is one that some are willing to play and some are not.  I am not saying that you should make it a point to read through the entire tax code, but I also am saying not to avoid it.  I understand that I myself am new to the tax “game”, but that should not stop me from trying to “play better”.  My recommendations are to consult a CPA, on top of that, consult more than one CPA.  Initially this will cost money, but in the longer play this may result in payback that is much greater than the cost initially.  

Posted in Real Estate News
Jan. 24, 2024

New Year, New You?

Ahh, the age old saying, “this year will be different.”  I am not a pessimistic person whatsoever, but odds are you will not be entirely different this year.  Now before you get up in arms, let me explain.  Changing who you are as a person is very hard to do, and I am not entirely sure that it is even a good idea.  To go from person A to person B literally overnight is very hard as who we inherently are has been built and ingrained into our brains and bodies since we were born.  I am a believer that constant improvement is a benchmark that can be achieved by a slow but sure molting of layers and progressions.  

While my time on this earth may be shorter than most, I would still like to think that I have been able to consciously observe and articulate a good amount of my experiences up to this point: the  good, the bad, and the ugly.  Then try to connect the effect to the cause.  I think that you may be in agreement that across all aspects of life there is a common theme of stages we go through. Sometimes these stages come in the form of going through struggles and hardships on our path forward.  Taking two steps forward and one step back, or maybe even two steps forward followed by two steps backward momentarily.  Examples of this that I am able to find in my own life are through football, fitness/health, and property.  It is my hope that through those examples you are able to associate my examples with at least one area of your life and use that as a sample that you can use to spread into other areas of your life wherever you see fit. 

Odds are that these stages will not necessarily be linear, and to be completely transparent, I must say that I myself am not perfect. I am far from it actually, but I think that’s what makes this whole human experience as mesmerizing as it is.  In college I had a football coach that shared a bit of advice that has still stuck with me in my approach to football practice and now into the rest of my life, he told us this:

  • When you were just starting out in football, your effectiveness (abilities as a player) was at a very base level.  If you were to put a percentage on this ability your base level would be 10% of your potential as an athlete/football player. This level being that you are able to run, jump, and tie your cleats.  Now as you progress through the game, maturing physically and mentally. The game becomes more complex and as a matter of fact the speed at which it is played increases significantly.  With so many facets to try and master or improve upon: tackling, techniques, understanding coverage, defensive concepts, blitzes, defensive fronts….. The list goes on and on.  If you were to try and master all of the elements together you would suffer from some serious paralysis by analysis, thus not improving at the rate that you could or should. Instead the coach suggested that we place a process based goal out for our day and practice.  My coach's advice was instead to take one element of the game into every practice that you can try and get 1% better at. 

 Then over a year, through that intentionality, you will be 365% better right?  I know this is total football math but let's leave the calculators out of it and take the lesson for what it is.  I find it very interesting that this  advice applies to almost all other aspects of your life.  In property for example, there are a multitude of possibilities and routes you could use in order to achieve your goal.  Having a scope of vision on the goal alone may end up hurting you in the long run however. You see, if my goal were to have a $2 million dollar house on the hill it would be a very daunting task to try and take that whole goal on head first. Where do I even start right?  It may work for some, and as a matter of fact this may work for you, the reader.  You may be capable and able to accomplish this goal from a 1.0 level of magnification. I myself would most likely not find myself capable of crushing a goal from this point of view.

Now let’s say you were to go and up your magnification to a 2.0 level on your goal.  At this point we get to the processes that exist in order to build your way to your goal fractionally.  In the property example, a process may be as simple as consulting a real estate professional to learn the “ins and outs” of how you can use real estate as a wealth building asset, and not so much as just a simple means to an end or a “home.” 

A major focus of mine this current year is to become less impressed and more involved with what goes on in my day to day life.  I do not mean that in a way that insinuates that anything I do is impressive, but rather I mean that in 2024 I want to spectate less at situations and circumstances within my daily life when they appear.  I aim to turn ‘woe is me’ and ‘I can’t believe that happened’ into ‘hey that is pretty cool, remember when..’ 

Also, another great phrase for reframing processes is: “keep it simple stupid”.  As a last example of this, my goal is to look into what are the positive aspects of my health (both mental and physical). Find the things that make me feel and operate better and literally write these out.  Then once I have a list of positives, I aim to gravitate toward those things on the list of positives.  Steering clear of the things on the opposite side of the coin, the negatives that deter my health and well being.  This is not complex on the base level, but if I were to just have the goal of bettering my mental and physical health I am not sure I would have any bit of a clue how to tackle that task.  

 

 Written by Nate Konecky R-S

Posted in Community News
Dec. 12, 2023

Top 3 “Ism’s” from Open House Visitors

 

After internal debate over what to ramble about in this week’s blog, ultimately I stumbled upon the idea to share the best three quotes that I have gotten in my experience with the Open House on Ali’i Drive.  For starters, II do truly think that getting a chance to meet and talk to so many different people with such a vast array of experiences and views is truly a blessing and unique experience.  It is my belief that there is something that can be taken from every one that we meet in our life and our days here in this life.  I think this holds true whether the person we meet has a view, opinion, or attitude that positively or negatively affects us.  Don’t you think that you could learn just as much from a negative nelly as you could from being around someone who radiates positivity and sees the world through a similar lens as yourself? In this week's blog,  I just wanted to take a quick minute to share my top 3 favorite quotes that have come up somehow in casual conversation during showings at the Royal Ali’i Open House.   

 

  • “Company is like fish, no matter how good it is, the longer you keep it, ultimately it will  always start to stink.”

 

When the lady who was in the model home said this, I quite literally had to stop, ask her to say it again, and was baffled at what lay within what she had just said. To me, this was a funny and goofy way to say something that was very true. Apparently this is a common saying, but I must say that I myself had never heard this.  If you have heard this then lucky you, but I can say that this may be one of the truest statements that I have heard in a while, especially considering the significance of the time of year with the Holiday season being upon us.  While I do love my family so so much, I will be the first to admit that there are times where my family and I have reached our social time limit together and I swear that at that point they are doing everything and anything in their power just to drive me crazy.

 

I know this is not actually true, and that they are not purposely trying to drive me crazy but still, it could be..

 

  • “We have always bought bigger and more than we should have, and it has always worked out for us.”

 

In context, these folks were talking about their home in comparison to their life currently and their goals.  I like to think of myself generally as a positive person who, most days, has a positive disposition, so this was music to my ears.  As in the next quote and this one, there is a theme of humble optimism and courage.  I personally think courageous humility is one of the most inspiring and beautiful traits to observe from a person. I am pleased to say that in getting to know the folks who said this, that this is exactly how they live and go through most of their life.  Now I do not think it is wise to “fly by the seat of your pants” blindly making rash major decisions such as buying a home.  These folks undoubtedly had a plan, and the courage it takes to “jump” in faith on something that Is really not a sure fire bet is admirable nonetheless. 

 

  • “The harder I worked, the luckier I got.”

 

Another gem! This one also made me stop and mill over what had just gone into my ears.  I know for a fact that this gentleman who said this had no clue about the weight of what he really was saying, and how this slew of words came over me.  Again, humble courage in its purest form.  This came from an ex-CEO of a large pizza chain as well as a long tenured career in finance.  While it seems the old time sentiment of “dream big and work hard” has slowly dissipated away,  it was a breath of fresh air to hear this.  Even in my life up to this point, given my life may  not be as long as this gentlemans,  I can personally say that I feel this statement is very true. To me it seems that the more I pour myself into the work I do and the people I work with/for, the more things just tend to “work out” in the end.  It is a strange phenomenon, but oddly enough, it’ll all work out in the end. 

Posted in Community News
Dec. 5, 2023

“Busy Season” - My View Point from Ground-Zero

Thanksgiving has come and gone, and if you’ve turned on an FM radio in the past week or so then you know that Christmas is barreling down the tracks.  As the holiday season rolls on, it is popular knowledge that this is the time when local businesses and services “get their nut.”  I do wonder if that is the case this year however.  It seems to me that there have been surges of higher traffic, but in general the total population and visitation to the island has been slow.  It seems to me that there are less cars on the road, people on the walk-ways, and more space on the beach these last couple weeks than I remember being there just a week ago.  

Now maybe I am wrong, and I would love your opinion as to what you think about the current state of travelers. However, it seems to me that the years post pandemic there was a burst in travel as everyone was just looking to get out of the house, but now either folks aren’t traveling as much or they just aren’t coming to the Islands.  It seems that this is a common belief even across multiple services and industries that I myself am involved in.  At the restaurant I work at I have also noticed surges in vacancy of tables.  In the restaurant I used to be able to semi-predict when we would be busy and not, but now there is seemingly no rhyme or reason to the days or even the hours when we will have an influx of guests.  

 

The next question that begs to be asked is, “If this is true and the tourist season is slow, is that a good or a bad thing for our island?”  I don’t know that I can answer this myself, but I think both sides of the argument prevail.  There is good and there is bad that would come from a down year. 

Posted in Community News
Nov. 28, 2023

Building Wealth Through Property

 

This week I wanted to check back in with where the market is at right now.  I decided to do a little residential market update through the National Association of Realtors Database of properties. My thoughts were reassured and the database agreed with me in signifying that we are still very much in a seller’s market.  The first statistics that popped off of the page was *that properties transacted in the month of October were sold at an average of 97.7% of the listing price.  This statistic would agree with and back up what we are seeing now as we are continuing to see the price of homes rise month to month as they are listed in the same neighborhood.  Another statistic that I found to be rather powerful was that the average time for the property to be listed is roughly 59 DAYS!  59 days… that is two months, when broken down further that Is under 9 weeks that these homes are on the market.  

 

These properties are metaphorically flying off the  shelves.  Crazy!  But, does this mean that you should sell your property? Truth be told there is no one who can answer that question other than you yourself.  While yes you are going to be selling in this hot market, which to be honest has a large amount of cash buyers, you are also going to potentially be buying into the same market.  A great idea if you are thinking about downsizing or diversifying your property.  

If you recall back to one of the first blogs that I put out, the second blog to be exact, I reviewed the Hawaii Housing and Economic Report from the year 2022. In that report it was found that property on Hawaii Island, subject to area and neighborhood, appreciated by about 15% over a 5 year period.  Ultimately making your property in Hawaii a great way to grow wealth over a period of time, while also being presented by a vehicle that can provide cash flow to an individual or organization.  

 

An example of this appreciation: I recently spoke with a gentleman who bought a home in Ali’i Heights in 2017 for about $400,000.  Needless to say that home would be listed for about a million dollars now.. Maybe more!   

Another interesting statistic was that the total money volume of the market in Kona is $179,037,390.  The number isn’t what is interesting, but rather the fact that this number is 87% higher than the month of September.  The number of homes is actually relatively consistent (only an 18% increase from September to October).  To me this says that “higher dollar homes are on the market.  This trend has actually been consistent through all of 2023.

 

Big takeaways? One thing that popped into my mind was the timeframe in which properties are leaving the market.  In turn making every day and hour matter.  Get yourself some representation.  If properties are only lasting on the market for 59 days then by the time the property hits the larger self-service real estate platforms like zillow and redfin then you potentially have lost some days to get in and look at the home.  If you lose 14 days because you are not working with an agent who has real time access to the property then there is a good possibility that there may already be an offer submitted on the property!

Posted in Real Estate News
Nov. 21, 2023

Royal Ali'i Open House + Thanksgiving

Welcome back everybody to the weekly Island Land Blog.  I wanted to take this week to do a couple things: 1) to inform anyone who didn't know that the model home at the Royal Ali’i Subdivision is now open! (No physical address yet, but head about 1 mile south of the Ali’i Gardens Marketplace, so get yourself some poke then come on by the house and see us! 2) wish everyone out there a Happy Thanksgiving!!

To kick things off I wanted to review the first week I have been in the open house at the model home.  I have been so blessed to meet all the great and interesting folks who have given me their time to stop by and learn about the project.  I am glad to report that there have been a lot of compliments given on the project.  The most common compliment being the spacious rooms.  The home does boast very large rooms, each of the three bedrooms in the model home are more than capable of having king sized beds in the room, without you having to do an awkward shimmy/crab walk between the bed and the wall just so that you are able to get in and out of the bed.  There have also been a lot of compliments over the size of the lots.  The lots are between about 6,000-9,000 square feet.  This is perfect for the owner to have a manageable sized garden or in some cases a nice 12 x 20 foot pool.  

There has really only been one complaint received over the project and that has been, “why did I not know about this project earlier.”  Clearly they didn't read the Island Land Company blog…., but one of my personal favorite qualities about the project is that it has been kept under wraps.  Not for the reason of keeping it to ourselves or making the project exclusive, but more so I like the idea of this community being made up of folks who did their due diligence to find one of the best new build gems on the island this year!  Which really is true, based on recent sales in the area, on the mauka side of Ali’i Drive, this price/ square foot on a new build is an AMAZING value to the buyers within the project. Another positive aspect of the project is the ability to be a “founding member” within the subdivision.  To me the idea of having a hand in being  1/19th  of what will be a legacy subdivision on Ali’i Drive for many years to come is very cool.  As a buyer, you get a chance to pick a plan, design property aspects, and build what will be on that lot for many years to come.  Whether you continue to live there or not, your choices and any possible improvements that you choose to make to the grounds will be there on that lot for generations to come.  How COOL right?!

With all that being said, I would also be remiss if I didn't wish you all a very happy Thanksgiving.  Be sure to take some time to be grateful for all that we have, and all that we have been given the ability and chance to do. Enjoy the time with your family, even the family members you only see only on the holidays.  

Since I was a little kid my family has read a poem before cutting into the turkey and beginning our feast.  The poem was published in the Omaha World Herald in the 70’s, and I wanted to share it with all of you because as I have gotten older I am able to appreciate this poem more and more.

 

“Things To Be Thankful For”

Be thankful for the clothes that fit a little too snug, because it means you have enough to eat.

Be thankful for the mess that you clean up after a party, because it means you have been surrounded by friends.

Be thankful for the taxes you pay, because it means you’re employed.

Be thankful that your lawn needs mowing and your windows need fixing, because it means you have a home.

Be thankful for the heating (A/C here in Hawaii) bill because it means you are warm (cool in Hawaii).

Be thankful for the laundry, because it means that you have clothes to wear.

Be thankful for the space you find at the far end of the parking lot, because it means you can walk.

Be thankful for the woman who sings off-key behind you in church, because it means you can hear.  

Be thankful people complain about the government, because it means we have freedom of speech.

Be thankful for the alarm that goes off in the early-morning hours, because it means you’re alive.”

 

-Courtesy of The Omaha World Herald


 Written by Nate Konecky R-S

Posted in Community News
Nov. 14, 2023

Property Management, The Good, The Bad, and The Ugly

I was talking the other day with a friend of mine about real estate, shocker.  More specifically over the property management side of real estate. I think it plays such a huge role here in Hawaii.  In lieu of the recent Transient Accommodations Proposal I really have started to wonder what goes into an individual's decision to bring on a property manager.  What are the pros and cons of having a property manager? What a better time than blog tuesday to go deeper into this? Let's dive in!

In the discussion, my friend told me what would be considered to be sort of a nightmare for a property owner.  She told me a story about a property manager that was used for a property that had high traffic Short Term Vacation Rentals (STVR), paid a salary, and really put little to no work in managing the property at hand.  The property manager was oblivious to certain needs that the property had, such as check in’s, check out’s, and cleaning schedules. All of which are VERY important for a property manager to have a knowledge of. Now this case scenario is a bit of an extreme on the poorly managed side.  However, I also know of some other property managers who have gone above and beyond for their clients, even going to lengths to fix or clean the property until past midnight for a quick STVR turn around.

What is the difference between these two scenarios? I think the biggest difference is intentionality and care put simply.  As with many other job candidates, not all property managers are created equally.  It has been my experience that a lot of the downsides of having a property manager go hand in hand with having a property manager who does not take their job as seriously as the property owner would. It really is as simple as that.  A great rule of thumb as a property manager is to treat the property as if it were their very own.  This alleviates a lot of the possible contention that could grow between parties involved with a poorly managed property.  

What are some signs of a poorly managed property? They usually work from the bottom up.  For example, if you are an owner who has put a property manager in place on your property, yet you still are dealing with a lot of the cleaning, maintenance, and guest issues, then this is usually a tell tale sign that your property manager is under performing.  These are below the line issues for homeowners with property managers.  These issues quite literally are the property manager’s job description.  As a homeowner, pay attention to who you hear from about the property most, while this seems very elementary, you would be surprised by how many folks don’t recognize this.  

On the other side of the coin, what does a good property manager look like? In the simplest form, the less you hear about your home the better, as crazy as that sounds it actually is very true. You should receive a lot of high reviews from guests, but ultimately you almost forget about your asset entirely.  It is also my opinion that there are many more good property managers than bad ones, especially of the folks I know here on Big Island. A great property manager can be a blessing, and when you have one, as I said before, you may forget about your property and its rentals, but the checks keep on clearing and going straight into the bank account. Everyone is happy.  

When considering property management from either side as either an owner or manager, I think the golden rule of “treat THE PROPERTY as you would treat yours” should prevail.  If you’re an owner looking for a manager and you get the feeling that this person does not ultimately care about my home but rather your business, proceed with caution.  If you meet with a property manager who notices the little things that they would like to change/help with such as the vases for the flowers having murky and cloudy water in them. Small details are what tell you whether or not this person values your property as a whole and is not just in the game to get your business.  

 Written by Nate Konecky R-S

Posted in Real Estate News
Nov. 8, 2023

Transient Accommodation Rental (Draft 5) Review- Unhosted Rentals

 

Welcome back to this week's blog everyone.  Hopefully you had some time to take a look for yourself at the the proposed 5th Draft in regards to the new short term rentals released by the Hawaii County Planning Department.  If not, I strongly encourage you to take a look for yourself.  My hope for this review process is to highlight some key points that I found to be either significant for property owners, or significant changes from the current Short Term Vacation Rental (STVR) code regulations as currently exist.  

To begin, the first question with the new Transient Accommodation Rental (TAR) proposition for unhosted rentals is that we must figure out what is an “unhosted rental” is by their definition.  To paraphrase, an unhosted rental is one in which there is no host or operator physically on the property or staying with the guests.  

For example, if you own a 2 bed/ 2 bath condo, and were to meet the guests at the door, exchange keys with them, give them a layout of the building, and any major must know information over the rules and regulations of that building.  That would be a prime example of an unhosted STVR.  

A Huge talking point here comes from Section 25-4-16-17 from the proposition. This section goes over ‘Transient Accommodation Rental Operation Standards’.  These standards include, but are not limited to: 

  • owner /operator of unhosted TAR must respond to contact within 1 hour of first attempt to reach them

  • owner/operator of unhosted TAR must be able to physically be available at the property in situations where this may be necessary or required

  • Gathering sizes limited to double the number of registered guests.  

  • Overnight accommodations limited by the amount of off street parking per the TAR permit.

  • Quiet hours of 8PM-7AM.

In the case that the director of TAR deems the owner/operator to be at fault in any of these terms, this will result in fines that themselves increase in amount per incident: $2,500, $5,000, and $10,000 respectively.  I have expressed my personal request for more governance of unhosted short term rentals, and these regulations are not necessarily out of line.  Some of these fines do seem a touch excessive.  I do understand that a major part of property rights and ownership includes the peaceful enjoyment of said property.  But on the other hand, I am a supporter of small business, and could see how one rowdy group of guests could cause an issue coming from the mainland and not taking the quiet hours seriously, thus causing a massive fine for the rental owner/operator.  I think there would need to be more specifications for appeals and risk mitigation for the property owner.  For further info on Disciplinary Actions set out by Draft 5 of the Transient Accommodation Rental Proposition see section 25-4-16.20 through 25-4-16.25.

Where can you have an unhosted TAR?

Great question that is also outlined in the proposition, unhosted TAR’s would be permitted in: Resort (V), General Commercial (CG), Neighborhood Commercial (CN), Downtown Hilo Commercial (CDH), Residential-Multiple (RM), and residential districts situated in general plan resort and resort node areas.  Nonconforming use certificates will be available for properties outside of these areas, but that already possess a nonconforming use certificate.  

 

Fees for Unhosted TAR:

Initial Registration: $1,000

Annual Registration Renewal: $250

Nonconforming use certificate: $500

Annual Nonconforming use certificate renewal: $500 

 

What does the process for registering look like? 

The OWNER must submit a registration application to the planning department.  This application must include: property tax map key number and address, name and contact info for the owner and/or operator (+this individuals real estate licensure if applicable), site drawing with structures with the requited proper amount of off street parking, submittal of floor plans showing the location of rooms for rent and all emergency exits. 

If you own or operate a STVR currently a very important part to read over is section 25-4-16.6.  This section discusses when to register for the new permit.  It also explicitly says that “existing owner-hosted and operator-hosted TAR in operation on or before [a TBD date]... shall be allowed to continue to operate until such time as their application is approved or denied by the planning department… While existing unhosted TAR that were previously registered as an STVR shall not be required to register (referring to initial registration), they will be required to renew their registration annually…”

 

Final thoughts and takeaways

Prepare yourself, and if you made it this far consider yourself lucky… or crazy… or bored.  No matter where you find yourself in that spectrum you get to read my thoughts on this half of the 5th Draft.  The biggest question that I come away with from this section is: “Is this proposed change to the short term rental side of property/property development the best possible way to help with the current housing crisis?”  While these proposed changes would help to decrease the market value of homes, will that necessarily help the economy here on our island?  There are a lot more businesses that either stem in with the short term rental market.  Think  of the cleaning services that make their business out of cleaning and turning around STVR’s.  The landscaping companies that make their ends meet because of these short term rentals. Are the homes that would be freed up/put back on the market as a result of the passing of this bill necessarily the types of homes that are needed in the market right now?  The market needs affordable first time and mid-level housing, and I have an educated hunch that a lot of the homes that would come up because of this newly proposed change would be above the price range of the need.  Now I may be wrong, but I think it is vital that we as a community look at the problem, more affordable housing, and compare it to possible solutions.  Would it be better to permit more building projects with single-family homes?  I can’t and shouldn’t answer this myself, but the message is the same as last time.  Let's get out and talk about this issue. If you think it does not involve you, you are wrong.  In some way shape or form this issue involves all of us.  


Written by Nate Konecky R-S

Posted in Real Estate News
Oct. 31, 2023

Transient Accommodation Rentals (Draft 5) Review

If you can recall back to August, we went over the 4th draft of the new proposed zoning legislation that was put out by the in regards to the current short term vacation rental policy.  As a preface, I encourage you strongly to go and read the proposed drafts yourself.  However, if you do not want to take the time to do that, the coming two weeks are going to be my personal review of the 5th draft.  This review will be my breakdown of how I see this proposed draft, as well as some of my thoughts and opinions on this.  

As it was in draft 4, the county is still planning to completely scratch the previously existing “Short Term Vacation Rental’ (STVR) policy that exists in the zoning code. They plan on implementing the new “Transient Accomodation Rentals” (TAR) in place.  As I stated in the last review of their 4th draft of this proposition, I do not love that idea, but given the benefit of the doubt that the newer draft would provide more, I was willing to read forward into Draft 5.  

In this week's blog I plan to break down Draft 5’s proposed plan for the hosted TAR’s.  The 5th draft is comprised of two categories of classifications for short term rentals.  They have hosted and un-hosted vacation rentals.  The difference is as you can conclude from the name, whether or not a host is present in the property.  The hosted TAR’s are then subdivided into two categories themselves, operator-hosted and owner-hosted.  Difference here being who the individual who is present on the property as compared to whose name is on the deed (who has principal ownership on the property). There is some commonality between the two, whereas in order for the rental to be considered to be a “hosted” TAR the property must be their primary residence.  

 

Break Down: 

The Owner-Hosted rentals actually provide a lot of variability.  A couple of the initial pros that stood out to me: they may exist in any zoning district, they can be any single-family dwelling, and there are nonconforming use certificates that are available, when proof of operation in the past is presented by the owner,  for ohana units or guest houses that have been hosted vacation rentals. The nonconforming use certificates are transferable from seller to buyer of the property, if the buyer intends to use the property as a short term rental. 

Fees:

Initial Registration $500

Annual Renewal: $100

Nonconforming Use Certificate: $250

Nonconforming Use Certificate Annual Renewal: $250

 

I did not think that this section was too bad! Really it is very comparable to what currently is in place with the rules and regulations of the STVR’s.  However, an ongoing annoyance that I have found repeatedly are the fees. Essentially if you apply for a Nonconforming Use Certificate you are going to be paying $250 annually, which I find a little egregious when put on top of the renewal fee.  There is truly no reason in my opinion for the owner to be double charged because of what could be seen in my opinion as an existing condition that comes along with their property and their rights to use the property as they please.

Now onto the Operator-Hosted Transient Accommodation Rentals.  Let me again restate that for a property to fall under this designation the operator must live in a single-family residence themselves.  This designation would apply well to condotels or something of that nature.  To quote the draft; “when they transient accommodation rental is subordinate and clearly or customarily incidental to the use as the residence and permanent address of the operator…”.

Break Down:

The operator-hosted TAR would only be permitted in Resort (V), General Commercial (CG), Neighborhood Commercial (CN), Resort Commercial (CV), Downtown Hilo Commercial (CDH), and Residential-Multiple (RM) districts.  

On the positive side: the nonconforming use certificate is also available for “grandfathering in” of already existing units that under the new proposed regulations would not qualify as TAR eligible.    

 

Fees: 

Initial Registration $750

Annual Renewal: $150

Nonconforming Use Certificate: $375

Nonconforming Use Certificate Annual Renewal: $375

Here is where I personally question where to begin to draw the line for personal property rights.  I can see how a property owner could feel slighted by the restrictions as well as the increase in fees annually with the operator-hosted rental.  With that being said I totally understand the increase in price when the operator-hosted TAR would be a condo or some sort of property with multiple units.  As the gross number goes up, so too should the fees.  From an investment property stance however this could potentially hurt a lot of people who are currently in the business of owning or operating these operator-hosted TAR.  

 

I am not going to get too deep into the 5th draft, and next week I will go over the un-hosted side of the proposition.  Again, I do encourage you to do your own home work, read Draft 5 of the Transient Accomodation Rental proposal.  Trust me, I get it.  There are a lot of ways to look at it.  On one side of the coin there are investors and property managers who rely on this market to make a living.  Then on the other side there are people out there unsure if they will ever be able to buy a home because of the state of the market.  Is the TAR reform the correct fix? I have my opinions and I advise you to create yours and talk about it.  Get out in the community with your neighbors and friends to see what they think.  This is something that could potentially have a huge impact on our entire island from the top to the bottom.  With tourism being such a large part of the overall economy that also means that where these folks are staying will have a massive impact on the businesses around the island as well.  If the amount of Airbnb’s and VRBO’s in town diminishes are visitors going to be more likely to stay entirely on the resorts? Will that harm places like downtown Kona and the shops like the ones along the Kona Inn Shopping Village? 

 

Posted in Community News
Oct. 24, 2023

Busy Times Here In Kona

 

There has been a lot of action in Kona as of late it seems to me.  As the cruise ships process on their route from north to south it has really spiked the activity for a lot of local eateries and tourist destinations.  I work a few evenings a week at Huggo’s, and have noticed the uptick in patrons coming to visit us.  It makes for the 5 hour shift to just fly right on by.  In addition to the influx of cruise ships, there are also a lot of cultural and cross cultural events going on in Kona. 

If you were not aware, the women’s Ironman World Championships was hosted on our beautiful island two weeks ago.  I also must say that I personally feel that this year was one of the best all around in regards to my enjoyment of the event. I remember last year. Having both the men and women's championships in town seemed almost unbearable at times with the traffic, crowds, and lines for everything and everywhere.  There seemed to be a massive overpopulation in town, and potentially I think it  hurt a lot of the local businesses more than it helped.  

After talking to some business owners locally they also felt that this year was much more manageable for them as well.  For example one cafe owner had to close his store front last year because his space quite literally was not large enough to cater to the masses that came in for the Ironman.  He then restricted his menu down to about 3 items and set up a tent in his outdoor seating area.  Not necessarily that this hurt his business by gross numbers comparison, but rather there is quite an extreme opportunity cost.  For example, if all he could serve in his roadside set up was hamburgers that he net profited $2 on. Then imagine what he could have done with the same number of customers who would order the ever so popular panini that he can net profit about $5 on.  Also, with just half the athletes competing this year, I thought that Kona was able to show her beautiful self off more in the massive influx of visitors from all over the world.  

There are also a couple of other events coming up.  The biggest of these being the Kona Coffee Culture Festival that kicks off at the beginning of November.  That is a week that I would encourage you to go and experience, even if it is just for a cup of coffee and a look around.  I was negligent to the intensity of the world of coffee until I experienced this festival last year.  There are folks who like coffee for the gastrointestinal benefits and caffeine contents (this is me), and then there are people who LOVE coffee and everything about it (this is the people who fly in for this festival).  They seemingly eat, sleep, and breathe coffee (which sounds like a bit of a health hazard if you ask me, but who am I to judge.)  So head on out to see what the Kona Coffee Festival is all about.  You may be surprised by the rich history that Coffee has on this rock in the middle of the Pacific that so many of us call home.  

With these international gatherings, another important side note to remember is that people come from all over the world for these events.  It is not always the case that they have the same social practices or regularities that we are accustomed to.  A great example was from Ironman.  In many European countries it is custom that bicycles share the same road space with cars, they do not have bike lanes at times.  So you may have noticed a more significant amount of bikes on the road.  Yes, this can cause a lot of frustration, I feel it too, don't worry.  That person who was riding in the middle of the road was not being a “jerk” however.  They were just doing what was accustomed to them.  Practice your aloha, and take a few deep breaths.  And hey, try to enjoy some of these events and the beauty that lies within them.  For me, it is the determination I could see on those ladies' faces as they fought to the finish line.  For the Kona Coffee Festival I think of the coffee farmer who is out there busting his back trying to make ends meet with this year's crop.  This festival, while more flashy than he may be, is most likely an event that provides him with great reassurance and pride for what he puts all of his effort into. 

 

How does this tie into real estate? You may have never thought I would get there, but finally here we are.  This is a prime example of opening your home up to others.  Hospitality is at the root of the aloha spirit, and the headquarters for that hospitality is your home.  I don’t mean you should just invite all of these visitors into your literal home, but be open to them visiting us here on the island.  Be kind, patient, and share a smile with them.  A smile means the same thing no matter what language you speak. 

Posted in Community News