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In his sixth State of the City speech today, Mayor Kirk Caldwell will unveil his plan to allow for more legal bed-and-breakfast establishments and transient vacation units across Oahu, but only if the operators are also the owners of those homes, abide by stricter guidelines, pay higher property taxes and pay stricter penalties when they run afoul of the law.
Caldwell, who previewed his speech to the Honolulu Star-Advertiser on Monday, said “unhosted” transient vacation units would be banned from areas zoned for single-family residential but allowed in apartment and business mixed-use zones and only for owner-occupants. Property owners with homeowner’s exemptions could rent their homes as TVUs for a maximum of three months out of the year.
Operators of TVUs would have to pay annual property taxes at the same rate as hotels and resorts, $12.90 per $1,000 of assessed value, instead of the $3.50 per $1,000 paid for by most residential property owners, if they operate as TVUs for more than 30 days, Caldwell said.
“There’s a whopping financial impact, I believe, for doing a TVU in a nonresidential area,” he said.
Property owners meeting those requirements also would need to obtain city-issued registration numbers, which must be displayed in advertising for the TVUs, Caldwell said. Those caught advertising illegally would be fined a minimum of $25,000 a day and progressively up to $100,000 a day, he said. Failure to pay would result in liens against those properties and other penalties, he said.
Hosted bed-and-breakfast establishments would be allowed in single-family residential as well as apartment and business mixed-use zones. Those with B&B establishments, like their counterparts with TVU operations, would need to have homeowner’s exemptions and obtain registration numbers.
Unlike TVU operators, however, those running B&Bs would be allowed to operate through the entire year. B&B operators would pay property taxes at $6.90 per $1,000 of value, roughly half of the hotel-resort rate but nearly double the homeowner’s rate, he said.
B&B operators who fail to show their registration numbers in ads would be penalized under the same guidelines as TVU operators, except there would be no limit on the maximum daily fine.
“You’ll probably want to comply,” Caldwell said.
There would be no limit on allowable B&Bs islandwide, so long at they can all meet the requirements, Caldwell said. TVUs would be limited to 1 percent of all available housing units in each of the nine development or sustainable communities plan regions on the island as defined in the city General Plan, he said.
“What we’ve heard from the community is that the real problem is these unhosted homes where all kinds of things happen, and people are buying them in all parts of our community and making a lot of money off of them,” Caldwell said.
The allowable number of B&B units per property and parking requirements would stay the same as currently allowed — no more than two units per house, and at least one parking space for every unit — Caldwell said. TVUs also would need to provide one stall per vacation unit.
Caldwell also will unveil a plan to try to jump-start construction of affordable rentals in smaller, apartment-zoned lots.
Demand for cheaper rentals is one of the things driving the proliferation of large-scale homes, so-called monster houses, that are skirting zoning and building laws on lots zoned for single-family residences, he said.
His administration instead wants to entice those developers and contractors to build multifamily structures in apartment-zoned areas, and specifically on smaller lots — 20,000 square feet or less — by offering them a host of incentives in two separate bills, Caldwell said.
“This is to incentivize more affordable rentals in areas where they should go and not in residential areas, which is where we’ll prohibit them from going in the future,” the mayor said. (Caldwell recently signed a bill placing a moratorium on larger houses, those with a maximum living area of 70 percent or greater of lot size, or a floor area ratio (FAR) of 0.7, until more permanent laws can be passed regulating large-scale houses.)
The maximum density for those smaller apartment-
zoned lots would go to four times the total square footage of a lot under the scheme, Caldwell said. That would mean a maximum allowable floor area ratio, or density, of 4.0, up from the current 0.9 FAR, he said. “You can get more building on the same footprint,” the mayor said.
The city also would waive parking restrictions for such properties, letting the market decide how much a developer or contractor should provide, he said.
Additionally, the setback areas for such structures also would be reduced to allow for wider structures, more mass, than now allowed.
On the building code side, a requirement for elevators will be waived for buildings in those smaller lots up to four or five stories, he said. Currently, the law calls for elevators in apartment complexes taller than three stories. Builders would also need to provide only one standard entryway rather than the two now required. Instead, the second entry could just be a fire escape, he said. Units would be required to have fire sprinkler systems both in enclosed common areas and individual apartments, he said.
“We want to encourage smaller projects that haven’t been built recently,” Caldwell said. “We’re looking at trying to activate those smaller type of projects with access to local financing and keeping our labor force at work doing these smaller type of projects when there’s a slowdown in the … higher-cost projects.”
The mayor said his administration also hopes to close on the purchase of three new Housing First facilities aimed at helping the homeless and low-income families.
A building at 806 Iwilei Road will house the operations of the River of Life Mission, now in Chinatown, as well an undetermined number of Housing First units, Caldwell said. The city is also close to purchasing a building at 1936 Citron St. in McCully, which would include about 31 units for women and children, and at 436 Ena Road, which would have 33 studios that will serve as low-income affordable rentals.
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