HILO, Hawai‘i — A debate about whether short-term vacation rentals should be allowed on farmland will go before the state’s highest court this week.
The Hawai‘i Supreme Court will hear oral arguments on Thursday, May 16, in a five-year-old case challenging a 2019 Hawai‘i County ordinance limiting the establishment of short-term vacation rentals (STVR) on land zoned as agricultural. That bill required that any STVR operating outside of certain permitted zoning districts obtain a non-conforming use permit from the county within 180 days.
However, the bill also prohibited any house on ag land from qualifying as an STVR unless the house was on that land before 1976.
A group of 20 West Hawai‘i landowners — collectively referred to as “the Rosehill Petitioners” after the lead complainant Linda Rosehill — challenged the bill after they applied for non-conforming use permits for STVRs on ag land and were flatly denied by the county Planning Department.
The petitions brought the case to the county Board of Appeals, which requested a declaratory order from the state Land Use Commission in 2020. The petitioners filed their own petition with the LUC — called “the Rosehill Petition” — shortly thereafter.
The Rosehill Petition argued that the state statute invoked by the county to deny STVR registrations on ag land after 1976 does not actually regulate the length of lease agreements, and therefore does not limit landowners’ abilities to rent their properties for periods of 30 days or less.
In 2021, the LUC denied that petition, prompting the Rosehill Petitioners to appeal the matter to the Third Circuit Court, calling the LUC decision “arbitrary and capricious.” A Third Circuit judge reversed the LUC decision, leading the commission to file its own appeal to the state Intermediate Court of Appeals in 2022. The case was then transferred to the Supreme Court in 2023.
During the 2020 LUC case, and the 2022 appeal, several residents urged the state to side against the Rosehill Petitioners, arguing that their large, luxury vacation rentals negatively impacted the character of the neighborhood.
“The argument advanced by the attorneys representing the Petitioners … is that STVRs are permitted in ag-zoned lands as ‘farm dwellings,’” read a 2020 letter signed by 15 Kohala Ranch residents.
“However, we believe this claim to be ludicrous since most or all of these STVRs are, in fact, luxurious homes that are being advertised and operated as resort-style commercial enterprises. They are not farm dwellings … as there is no agricultural activity occurring.”
While the Supreme Court is not likely to come to a decision on the matter anytime soon, the case comes in the midst of major changes in how STVRs are regulated. On May 3, Gov. Josh Green signed into law a state bill that would give the counties authority to control the time, place, manner and duration of land uses, particularly transient accommodations.
At the same time, several county bills that overhaul STVR regulations are currently under discussion by the county’s planning commissions. Those bills would establish certain standards of conduct for STVRs and limits on what sorts of buildings can be used as STVRs, among other things.
While the state and county bills have been heralded by STVR operators as a death knell for their businesses, their advocates — including Green — have said they will help combat the critical lack of affordable housing in the state.
“When 8,000 people had to be housed after the (2023 Lahaina) fire — and it was actually more than that, because many people went to their loved ones’ homes — we could barely find any short-term rentals that would take our local families at first,” Green said on May 3.
Roy Vitousek, attorney for the Rosehill Petitioners, did not respond to requests for comment.
The Supreme Court oral arguments will be heard at 2 p.m. on Thursday, May 16, and can be viewed at youtube.com/hawaiicourts.
