HONOLULU — Poorly regulated use of homes on farmland around the state has been somewhat reined in by a Hawaii Supreme Court decision Tuesday.
Hawaii’s high court ruled that short-term vacation rentals do not constitute legal “farm dwellings” on land in the state agricultural district.
The court ruled against 17 owners of ag land on Hawaii island who objected to a 2019 Hawaii County ordinance that aimed to regulate short-term vacation rental use of dwellings built after the creation of the state’s land-use law in 1976.
The county denied certificates for such use to the landowners after concluding that state law did not allow short-term vacation rentals on land designated by the state for agricultural use.
Linda K. Rosehill and other landowners including Todd M. Moses, Doyle Land Partnership and Maggholm Properties LLC petitioned the state Land Use Commission in 2020 to overrule the county’s interpretation regarding farm dwellings in state land-use districts governed by the LUC.
Under original language of the 1976 law, a legal farm dwelling is a single-family dwelling “located on and used in connection with a farm” or “where agricultural activity provides income to the family occupying the dwelling.”
The 9-member commission in 2021 ruled against the landowners, referred to as the Rosehill Petitioners, and the landowners appealed to state Circuit Court where a judge in 2022 ruled that the LUC was wrong.
An appeal by the LUC was elevated to the Hawaii Supreme Court, where a central point of argument focused on the ambiguity of state land-use law pertaining to farm dwellings.
The state Legislature in 2021 amended this law so that a farm dwelling must be an “accessory to” a farm instead of “used in connection with” a farm, but the old definition applied to the Rosehill Petitioners.
Attorneys representing the LUC argued that the Rosehill Petitioners provided no information regarding how dwellings for short-term vacation use were connected with farms. They also said the LUC should be accorded deference to interpret its own ambiguous statute.
“Residential use of a farm dwelling without any connection to an agricultural use has never been allowed in the Agricultural District,” the commission said in its appeal. “The law has always required that a farm dwelling be used in connection with a farm or accessory to an agricultural use.”
According to property and building permit records, one of the Rosehill Petitioners, Maggholm Properties based in Sweden, bought a 1-acre agricultural lot in Captain Cook for $175,000 in 2013, and two years later built a 3,300-square-foot house on the lot for an estimated cost of about $600,000.
The Rosehill Petitioners contended in part that farm dwellings can be used as short-term vacation rentals because state law doesn’t mention how long farm dwellings need to be rented.
Hawaii Supreme Court justices supported giving deference to the LUC, and said in their order that the narrow view of the statute put forth by the Rosehill Petitioners would allow the purpose of the law to be subverted.
“We hold that farm dwellings in the agricultural district may not be used as short-term vacation rentals because such relief would undermine the purpose of the agricultural district,” the justices said in their order. “We therefore vacate the Circuit Court’s judgment and affirm the LUC’s declaratory order.”
Gov. Josh Green and Hawaii Attorney General Anne Lopez praised Tuesday’s ruling.
“Using agricultural lands for genuine agricultural purposes and ensuring that housing is allocated for our residents are two of the most crucial issues facing our state today,” Green said in a statement. “I commend thatcq Hawai‘i Supreme Court for making the right decision for the people of Hawai‘i.”
Lopez, in a statement said, “This decision reaffirms the importance of agency expertise under Hawaii law.”
Doug Chin, a former Hawaii Attorney General now in private practice, argued the case for the LUC before the high court. In a statement, he called the LUC’s decision well-reasoned, and also said the high court ruling is a win for preserving Hawaii agricultural land.
“Short-term vacation rentals are transient accommodations effectively for vacation or tourist use and do not belong in the agricultural district,” Chin said.
