Public divided over vacation rentals

LIHU‘E — A bill that would explicitly legalize hundreds of existing transient vacation rentals on agricultural lands is gaining ground.

Bill 2364 received a county Planning Commission stamp of approval in April before moving to the Kaua‘i County Council where it sailed through a first reading in May and a public hearing Wednesday.

The controversial bill has faced major community opposition each time it has been up for discussion. But aside from several opponents voicing concerns, Wednesday’s hearing was marked by a significant number of supporters, many of whom were lawyers and real estate managers representing TVR owners.

“The clients I’ve been representing, that’s all we’ve been asking, just a fair opportunity to show that we have been a TVR for the past so many years, even before the original bill was passed, and that is a fair situation for the whole neighborhood,” Lihu‘e attorney Jonathan Chun said.

On March 7, 2008, the late Mayor Bryan Baptiste signed Bill 864, the ordinance mentioned by Chun, which allowed TVR owners to apply for non-conforming use permits, as long as they were operating prior to that date, and had been paying taxes and keeping receipts.

That law, however, specifically excluded vacation rentals operating on agriculture-zoned lands. The new bill, proposed by Councilman Tim Bynum, would give ag-land vacation rentals operating prior to March 7, 2008, an opportunity to apply for a non-conforming use permit.

Legal issues

When former Councilwoman JoAnn Yukimura introduced the original bill in March 2007, Chun argued that state law may prohibit counties from denying a landowner the right to use his property in a manner that was previously allowed by the government.

He also said landowners could argue that the taking of their property without compensation is unconstitutional under the 5th Amendment. The taking would mean physical property appropriation or depriving someone of all economically beneficial use of a property.

When Chun unsuccessfully argued in 2007 on behalf of TVR owners in ag-zoned land, he mentioned several court cases in which the outcome set precedents in favor of landowners.

When the previous bill was in the crafting stage, the Kaua‘i Alternative Vacation Accommodation Association website warned TVR owners that if there’s any evidence of a business advertising, it could result in a search warrant to look for possible illegal activities.

“Are you sure we are still residing in the U.S. or maybe in Nazi Germany?” the KAVA website questioned. “The County Council can and will easily find any of our vacation rental properties on the web — they probably know who we are.”

Bynum has said that the county cannot legally deny use because of zoning violation, nor deny owners an opportunity to become legit if they demonstrate they have complied with the law.

Councilman Jay Furfaro has said that council members take an oath to protect the county’s wellness. “Part of that is not getting ourselves tied up in a bunch of lawsuits,” he said.

The bill, both lawmakers said, is an attempt to fix the law rather than circumvent it.

Former Councilman Mel Rapozo said during the bill’s first reading that an October 2008 opinion from Attorney General Mark Bennett says that counties cannot authorize TVRs on ag land. Bennett has ruled that a TVR or a bed-and-breakfast is not an accessory use, Rapozo said.

“If it doesn’t apply to the farming activities — and believe me, tourists do not support the farming activities — it’s not allowed,” he said at a recent meeting, referring to TVRs as an accessory use.

Farm, residence or TVR?

The Planning Commission recently approved a 12-room “farm dwelling” on ag land in Kilauea’s Seacliff Plantation gated community. Under state law, the unit has to be in conjunction with farming activities. In this case, it will be a one-acre turf farm, and half an acre of fruit trees.

Representatives for landowners Steven and Diane Dechka said the couple would not be residing there full-time, but had extended family who would use the house often.

In the same gated community, there is a vacation rental listed on the Hawai‘i Gaga website at $6,000 a week or $1,000 per night. The 3-bedroom/2.5-bathroom property, called Nene Hale, is managed by Princeville Vacations/Coldwell Banker.

Support

Lihu‘e attorney Lorna Nishimitsu said the council would be giving landowners no greater rights than Kapa‘a Middle School had when it applied for its permit to operate on ag land.

“Many of our churches have to go through the special use permit process because there aren’t enough zoned lands that are large enough that allow those unusual and reasonable uses,” she said.

“These people who are engaged in ag-TVR uses will also have to engage in agricultural activities because the lands are classified agricultural,” said Nishimitsu, who also requested that whenever the topography makes it impossible for agriculture, owners may qualify if they’re farming on a common element of a Condominium Property Regime subdivision.

Councilwoman Lani Kawahara said she was having a hard time understanding the comparison of schools and churches to TVRs.

“The fact that rental income is collected from rental of the homes, it’s no different than income that is collected from the sale of agriculture products,” Nishimitsu said. “This society is driven by economics, the difference is the amount of money.”

Falko Partners director Shawn Smith, who is a Chamber of Commerce board member, said it doesn’t make a difference who is in the house next to you.

“It’s unfair to say that people visiting are the ones who are making all the noise. I live next door to a family that’s making noise all the time, and they live here full-time,” Smith said. “I hate to throw that emotional side in any kind of deliberation.”

Smith said the TVR business is an important “survival tool” for families who live on the Mainland part-time, and also live here and rent their properties.

“Let the people that have been contributing to the island on so many different areas of the economic side of it continue,” Sean Smith said. “They do it the right way, they fill out all the paperwork, they do it legally, they should be allowed to continue.”

Lihu‘e attorney Dan Hempey said his client, KAVA, asked him to show its support for the bill.

“We believe it’s fair and it’s the right public policy, and it would also make county law consistent with state law,” Hempey said. “We think it’s good policy, because it promotes farming.”

Hempey said TVR owners would need employees to work the farm. A ratio between vacation rental income versus farming income would have to be set, so the Planning Commission could make an informed decision, disqualifying TVRs disguised as farms.

“I think we’ve got to trust our bureaucrats to look at it and make a decision whether this is a scam application or a real application,” Hempey said.

Chad Deal said he supports the bill because it allows for regulation and treats everyone fairly.

He said TVRs on farms give an opportunity to experience the island in a different way. He gave his daughter’s experience last Christmas in Italy as an example. She stayed in a farm there, along with 60 other tourists, and was put in charge of baking operations.

Guy Croydon, who is also a member of the Kaua‘i Fire Commission, said he agrees that the due process the Planning Commission used to approve TVRs was rather subjective.

“There was no clear guidance,” he said, explaining that many local families were disapproved because their structure was not in local compliance.

“I don’t believe any other businesses get shut down because they have a structure violation, without being cited … and allowed to fix the violation,” he said.

Only a limited number of TVRs in business would qualify, and the new bill would not open it up for new TVRs to apply, Croydon said.

“We have enough land here on this island to do diversified agriculture, and probably support most of the state. But the big problem is that large tracts of land are being held by corporations from the Mainland and who knows where else,” Croydon said.

If the county wants to promote agriculture, it should support bills to leverage those landowners to allow their land to be farmed by those willing to do it, he said.

“I think we need to look forward. I think this bill does look forward at how to deal with what we have,” said Mary Paterson, who owns Custom Care Company, specialized in providing VIP services for visitors staying in vacation rentals.

The England-born entrepreneur, who’s been on the island for 23 years, said the bill should be approved.

“The strangest thing is that a lot of these places got a license to do business, from the state, have been paying their taxes to the state and the county all these years, and all of a sudden it’s ‘oh, you’ve been doing this illegally,’” she said. “I don’t quite understand it.”

Many TVRs sit on smaller CPR lands, and cannot farm because of land limitations, Paterson said.

“They should be given the opportunity to apply for a special use permit,” she said, adding that the council should even take into consideration rezoning some of the smaller CPR lands that don’t have enough room for farming.

Opposition

Many community members also testified against the bill. The opposition was the same, if not stronger than the support.

Resident George Volker said he lives with his family in a CPR property zoned as ag land. He built a 2-bedroom home and planned to supplement his income with farming.

Two of his neighbor, who share the CPR, have been conducting illegal TVR businesses for years, he said. One of these neighbors doesn’t even have a certificate of occupancy issued for the main home and a guest unit, according to Volker.

He said he has seen many parties there, bands playing, and film crews. When he approached his neighbors he was called a “bad neighbor” and asked if he was drunk.

A complaint filed with the Planning Department has apparently not resulted in any action, since both vacation rentals continue to operate, Volker said.

“Transient vacation rentals do not belong on ag land,” he said.

Resident Anne Punohu, in tears, said if she had a piece of land to farm she would be able to support her family much better, but instead she has to work at department stores and in the tourism industry.

“The land on the beachside is very fertile if you know how to farm, and if you know what to farm,” Punohu said.

Farmer Lani Sykos said when he used to live in Hana, Maui he single-handedly cleared five acres of land with a chainsaw to create a successful farm.

As a taxpayer, Sykos said he understands TVR owners need to pay hotel or commercial zoning property taxes to engage in commercial tourist activities, instead of paying taxes for ag lands.

Kapa‘a resident Ken Taylor said he does not farm, but is against the bill. “We should move forward,” he said.

Barbara Robeson, speaking on behalf of Protect our Neighborhood ‘Ohana, asked the county to do an audit before considering the bill to solve some problems before compounding the existing ones.

North Shore resident Caren Diamond also suggested an audit to see what has already happened with the proliferation of TVRs.

“How can you give them more to do until you do that?” she asked council members.

“To anyone who’s saying ‘we’ve been legal all along,’ where is the use permit?” she said. “There’s a procedure available, I don’t see why this council acts as if their hands are tied.”

Bill 2364 will be revisited July 7, when it goes before the council’s Planning Committee.

Go to www.kauai.gov, www.hawaiigaga.com, www.wethepeopleofkauai.com and www.customcarecompany.com for more information.

• Léo Azambuja, staff writer, can be reached at 245-3681 (ext. 252) or lazambuja@kauaipubco.com.