Vacation Rental Regulations Final Version Passed
Hawaii County’s Bill 108 which is intended to regulate vacation rentals of 30 days or less will finally become law in April of 2019 with the final rules decided by the Hawaii County Planning commission after more public testimony. Find a PDF download link for a copy of the final draft (#8).
Here is a note from Councilman Tim Richard’s aid to my Broker Gary Davis earlier this week:
This is the final version of Bill 108, that Council passed last week, but it isn’t the “final law.” Bill 108 can be viewed as a “foundation” for the Planning Department to now use toward creating more specific rules which may include replacements/additions to the bill. Once Planning has taken these steps, the County will hold public hearings and further discussion on the proposed rules. All of this is expected to be completed by April 1, 2019, when Bill 108 is schedule to go into effect.
I hope this helps clarify for you?
The highlights of the Bill, from my perspective, include the County’s actual acknowledgement that vacation rentals are occurring where they were never intended. This is due to the lack of enforcement by Hawaii County over a number of years where vacation rental use slowly migrated from the obvious places like resorts and ocean front condominiums zoned (V) or other classes that allowed vacation rental into what were secondary communities intended to be owner occupied or rented on a long term basis which is 30 days or more.
During and after the “great recession” which started in 2006 and probably ended in 2012, more properties were vacation rented in these non traditional locations as owners sought higher per day rents over lower long term rents in order to hold on to their properties. In addition, the use of VRBO and Airbnb to rent properties has grown to be the norm not the exception since 2006 helping to spread vacation use into the once sleepy neighborhoods filled with local families including children and seniors.
Bill 108 states it’s purpose in this manner:
The purpose of this ordinance is to manage the impacts of these short-term vacation rentals by:
1)defining where this use will be allowed,
2)establishing provisions and standards to regulate it’s use and;
3)providing an avenue for an existing use deemed to be improper by this ordinance, to apply for a non conforming use certificate that would allow them to continue to operate in a non-permitted district.
Here is my quick review:
-The third provision will be the most interesting to implement and enforce regarding “non-conforming use certificates”. During public comment, the County was inundated by owners in non approved areas as well as paid, VRBO and Airbnb advocates that contended any number of “hardship” cases and circumstances that resulted in the County continuing to allow vacation use outside of where it was intended with a “non conforming use certificate”.
-The new fees outlined in the law provide that all owners who vacation rent, will now fund the new County staff who are charged with policing and enforcement of the law’s provisions. The fees will be collected from all vacation rental property owners, but I would speculate, the new staff’s time and energy will be focused on the properties using the “non conforming use certificate” or illegal vacation rentals. Since a majority of vacation rental properties are legal by the County’s definition, those owners will be primarily funding the County’s enforcement and administration efforts including the “special use certificate” program. It’s my opinion the County should only charge the “special use certificate” owners these new fees and have a fining strategy for illegal rentals that funds the enforcement staff. Charging a fee to current, legal vacation rental owners to administer and enforce the illegal and exceptional “non conforming use certificates” seems “unfair”.
-Vacation use on Agricultural property is not allowed except with a “special use certificate”. “Single-family dwellings on lots existing before June, 4 1976” may qualify for a special use certificate.” I believe this will have a big effect on developments like Kohala Ranch, Kohala Estates and others as these communities are located very near the resort areas but are zoned Agricultural. A quick search on VRBO will reveal many properties currently being vacation rented in these areas.
-Vacation rentals in the allowed areas will possibly gain popularity and value as the properties in Agricultural and non resort areas fall out of favor with buyers who want to vacation rent without obtaining a non-conforming use certificate .
All laws have good intentions and also have unintended consequences. We will have to wait a few years to see how all of this “shakes out” but it’s good beginning.
Or read below:
I have often speculated that Counties within the State of Hawaii would eventually start enforcing zoning laws relative to vacation rentals in (R) Residential Zoning and especially in (AG) Agricultural Zoning classifications. It has always been my understanding that vacation rentals of 1 to 30 days were only allowed in (V) Resort zoned property but I’ve often observed REALTORS and buyers openly discussing vacation renting properties outside of (V) Resort zones.
A quick scan of Hawaii County rentals on VRBO.com will give you an idea of the many options for vacation rentals in communities like Waikoloa Village which is primarily zoned Residential and even Kohala Ranch which is zoned agricultural including grazing livestock herds. Property owners that have purposely purchased properties in communities that either expressly exclude vacation rentals in their CCR’s, or “understood” that vacation rental activity in their Residential or Agricultural zoned (non Resort zoned) communities was not allowed by zoning exclusions contained in the County of Hawaii zoning code, are getting ready to have that clarified or at least acknowledged by pending regulations proposed by County of Hawaii Councilwomen Karen Eoff from the North Kona District.
I have included links to various articles that have appeared recently regarding the subject. I have also included a link to various County of Hawaii web pages so that you can read and understand what is written on this subject. I have included a link to contact Councilwomen Eoff regarding her bill also-maybe she can explain further the intent and implications of her legislation.
I believe when making an expensive decision regarding a Hawaii real estate purchase, the facts regarding rental or non rental zones and whether vacation rental is allowed should be very clear related to rental in those particular zoning classifications. Those seeking areas where vacation rental is legally and expressly not allowed should know where these areas exist so that they can make an informed decision and the same applies for those seeking vacation rental properties.
Recent Articles in local newspapers and other media. See the links below for more information: