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The Honolulu Advertiser
Posted on: Thursday, February 22, 2007

Tax files would help transient rental issue

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GET INVOLVED

The Senate Ways and Means Committee is set for decisionmaking on SB 750 at 9:30 a.m. tomorrow in the Capitol’s conference room 211. Information: 586-6800.

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A measure that seeks the release of some information from state tax documents would indeed help county authorities better enforce zoning restrictions of vacation rentals in residential districts.

However, the Islands still lack real policies for managing one of the most frustrating land-use issues. Even if it passes, as it should, this legislation will not fill that vacuum — that duty still rests with the counties.

The proposal surfaces because of the difficulty in curbing illegal vacation rentals and bed-and-breakfast (B&B) units that have proliferated since the city ceased issuing permits for them in 1989.

As it is, SB 750 needs key amendments. There's no reason for wording that singles out a sector of the visitor industry. Instead, the measure should enable general zoning law enforcement, cracking down on any illicit business activity in a non-business area.

And whatever bill finally emerges from the Senate Ways and Means Committee, it must authorize only a limited release of information. Surely the location of a taxpaying business — something not disclosed on Web sites marketing the units — should be a matter of record open to enforcement agencies.

This may help neutralize vacation-rental owners' complaints that their private records from paying the state's transient accommodations tax should not used as tools against them.

But neither should the privacy of financial records be invoked as cover for an illegal business activity, one that they launched with full knowledge of the law.

On one score, the business owners are correct: Paying taxes demonstrates a desire to operate legally, but the local authorities don't offer any route for legalizing the business.

That must change. Counties need to create boundaries within which some establishments could be issued permits and be regulated. Even compactly arranged subdivisions could harbor a set number of transient units.

There's a tipping point at which the blend of residential and transient populations is unbalanced, a point that must be determined through negotiation. But that discussion can't even begin if vacation-rental owners believe anything goes, which is how it must seem to residents in parts of O'ahu.

SB 750 may help to bring abuses under control. And then the conversation needs to begin on how to devise a plan that preserves the peace in bedroom communities.