Bill bans new vacation rentals

After several years of wrangling, the county has a bill in place again to stop the proliferation of new vacation rentals blamed for destroying neighborhoods from Kekaha to Ha‘ena.

The divisive community debate has pitted real estate agents against residents, property rights advocates against government officials, County Council members against each other.

Public testimony over the proposed ordinance and its multitude of amended versions has included fiery remarks, impassioned pleas, a plethora of legal opinions and concerns over possible Sunshine Law violations.

County Council, yesterday, at the Historic County Building reconsidered and approved the legislation, known as Bill 2204, for its third time in three weeks. The final vote on the compromise bill was 5-1, with some lawmakers voicing reservations, councilman Tim Bynum dissenting and councilman Ron Kouchi’s absence excused.

While acknowledging the new ordinance’s power to stop the creation of new single-family transient vacation rentals outside visitor designated areas, critics say the bill does nothing to heal the wounds some neighborhoods have suffered since the problem was identified eight years ago in the county’s General Plan.

Would-be supporters question whether the amended bill effectively provides an opportunity for vacation rental owners on ag land to be “grandfathered” under the new law by proving they legally existed prior to the legislation’s approval.

Some council members, including Shaylene Iseri-Carvalho and Mel Rapozo, say state law prohibits vacation rentals on ag land primarily because it is a commercial use.

But attorneys representing landowners said the law has a provision that says prior lawful uses must be recognized and a county-imposed blanket exclusion begs a lawsuit.

The final version of the bill provides a nexus to the state land use law by stating: Pursuant to Hawai‘i Revised Statutes Chapter 205, no nonconforming use certificate shall be issued for any single-family transient vacation rental located on land designated agricultural by state law.

The approved bill provides two exceptions: The unit was built prior to June 4, 1976, or the applicant has a special permit under state law.

County Planning Director Ian Costa said yesterday that to his knowledge there has never been an application on Kaua‘i for a vacation rental permit on ag land.

Distinct questions emerged in the process of hammering out this bill.

What is a legal use on ag land? Which vacation rentals have been lawfully pre-existing? Can the county phase units out?

Council members went round the table multiple times in the hours-long meetings, rarely arriving at a unanimous consensus other than saying the courts will make the ultimate determination.

Some residents, such as Chad Diehl, championed the rights of farmers to operate a vacation rental on their land.

“If we had not been able to do an ag experience for visitors through the use of our guest house as a vacation rental it would have been much more difficult to make it as a farmer,” said Diehl, who operated an organic farm on the North Shore for 20 years before becoming a Realtor. “It allowed me to raise a family and take care of the ‘aina.”

Others, such as Yogi LaCock and Leah Sauson, said they have watched vacation rentals in residential and conservation land areas push local families out of communities by increasing property taxes and creating areas more prone to crime.

“Are you listening to us? Are you wasting our time? Are you wasting our tears?” Sauson, 24, of Ha‘ena, told council in emotional testimony last week. “I come here because I have a heart. When you’re a child of this land you learn to take care of it.”

Council first passed the legislation with a unanimous vote after an all-day session three weeks ago. It was considered a compromise bill that stopped new single-family transient vacation rentals in non-designated tourist areas, but did not make a statement about operations on ag land.

The reconsideration last week was to strengthen the bill by explicitly banning all vacation rentals on agriculturally-zoned land. An amended version passed 4-3. Councilmembers Kouchi, Bynum and Jay Furfaro dissented because they said adding that provision needlessly exposed the county to lawsuits.

The vote was rushed because Rapozo had to catch a flight and in doing so the council failed to afford the public an opportunity to testify on the amended version until afterward.

Lauren Sharkey — an attorney for the Honolulu law firm Case, Lombardi and Pettit — told council after the decision that she suspected a Sunshine Law violation and planned to investigate.

The reconsideration at the special meeting yesterday was primarily to address the alleged violation, councilwoman JoAnn Yukimura said, but also afforded an opportunity to amend the bill again.

The revelation of her plans to propose significant changes to the legislation prompted some councilmembers to launch accusations.

“I can not trust councilmember Yukimura,” Iseri-Carvalho said. “I will not tolerate this anymore.”

Iseri-Carvalho said she went along with Yukimura’s request to reconsider the bill on her assurances last week that it was only to get in compliance with the state’s open meetings law.

Yukimura said she accepted responsibility for the “back and forth” arguments and dragged out meetings. But part of it is due to the difficulty of the matter, she added.

“It affects lives on both sides of the issue,” she said. “It’s having to correct something that has been festering for a long time.”

Yukimura, elected in 2002, said she requested a bill from staff to regulate vacation rentals in 2003. When she failed to receive such legislation, she drafted it herself in 2004. Intense work continued until the final vote yesterday.

With the approval of this bill, the burden now lies on the county Planning Department to carry out the law. Council members have called into question the department’s track record regarding this.

The department’s responsibility includes inspection and enforcement. A provision requires identifying and registering those vacation rentals which have been in lawful use prior to the ordinance and to allow them to continue subject to obtaining a nonconforming use certificate.

Costa said he intends to handle this matter “consistently” and would review each applicant’s supporting documentation.

Attorney Jonathan Chun, representing real estate agents, said all the county Realtors board has asked is to be given a fair chance to prove they are legal.

But earlier in the meeting, Costa said he agrees with the state land use commission’s interpretation of state law which would forbid all vacation rentals on ag land.

It remained unclear at press time if his enforcement would be a blanket approach or case by case.

Bynum suggested yesterday that the council revert back to the first version of the bill it passed three weeks ago, but this effort failed to find support.

“We’re about to make a mistake that’s going to expose us to liability needlessly,” he said, explaining his “no” vote for the amended bill.

Furfaro said the final version shifted back closer to its original form. He pointed to a provision he was proud of that allows for some attrition.

The law mandates through the permitting process that the vacation rentals are reviewed annually. If taxes are unpaid or other violations found, the unit’s nonconforming use permit will be revoked, councilmembers said.

“The bill isn’t perfect, but I hope its main purpose will be clear,” Yukimura said, adding that she hopes the Planning Department will “rise to the occasion.”

Council chair Bill “Kaipo” Asing supported the bill with reservation.

“What is happening to our island?” he said at one point in a presentation he gave showing how North Shore communities have been overrun by vacation rentals owned by non-Kaua‘i residents.

• Nathan Eagle, staff writer, can be reached at 245-3681 (ext. 224) or neagle@kauaipubco.com.