Vacation rental rules to be unveiled soon

  • Planning Director Michael Yee testifies before the County Council Planning Committee on recommendations for the Vacation Rental Bill on Tuesday. (Laura Ruminski/West Hawaii Today)
  • Planning Director Michael Yee testifies before the County Council Planning Committee on recommendations for the Vacation Rental Bill on Tuesday. (Laura Ruminski/West Hawaii Today)
  • A vacation rental sign is posted at a home on Alii Drive. (Laura Ruminski/West Hawaii Today)
  • A vacation rental sign is posted at a home on Alii Drive. (Laura Ruminski/West Hawaii Today)

HILO — Hawaii County’s new vacation rental law is almost ready for prime time.

The county Planning Department has scheduled public hearings on draft rules for 5:30 p.m. Feb. 28 in Kona and March 1 in Hilo, Planning Director Michael Yee told the County Council Planning Committee on Tuesday.


The rules will then be finalized, taking public input into account and presented at a final public hearing April 2 before going into effect April 15, Yee said. He said the goal is to have public drafts available in the next few weeks to give people time to read them before the public hearings.

“(Drafts) are not ready to be distributed this week by any means but we’re getting close,” Yee said.

One eye-opener will be the proposed fines for those operating an illegal short-term vacation rental. Rather than paying standard zoning fines of $500 per day, those operating illegal vacation rentals could be fined $30,000, under draft proposed rules.

“We heard from many folks that the fines have to be high enough to change behavior,” Yee said, adding even Oahu’s $20,000 fine hasn’t been all that effective there.

A short-term vacation rental is defined as a dwelling unit of five bedrooms or less, rented for 30 days or less where the owner or operator doesn’t live on site. All owners of vacation rentals will be required to register with the county and pay a $500 fee.

The rentals will be allowed in these zoning districts: resort, general commercial, village commercial, residential and commercial districts within the general plan resort and resort node and condominiums within the multi-family residential district. Rentals operating outside those districts when the law goes into effect may be grandfathered in if they’re compliant with tax and building codes and apply for a nonconforming certificate that’s renewable annually.

Vacation rentals on land in the state land use agricultural district where the lot was created after June 4, 1976, remain a sticking point. The county can’t go against state law, Yee said.

“If you’re on ag land pre-1976 and you have your vacation rental up and working, you’re OK,” Yee said. “If on a post-1976 lot, you were deemed illegal and you will continue to be deemed illegal.”

Puna residents Eileen O’Hara and Jon Olson, the only two testifiers, said the ag restriction disproportionately falls on Puna, which doesn’t have much land in the allowed designations.

“The visitor industry is both blessing and bane,” Olson said. “Each district should have a certain number of visitor rentals available.”

Two Democratic state lawmakers representing Puna have introduced bills to change it. The bills, SB 480 by Sen. Russell Ruderman, and HB 642 by Rep. Joy San Buenaventura, would allow short-term accommodations that co-exist with a “bona fide agricultural activity” in counties with a population between 150,000 and 500,000. This would allow Hawaii County to join Maui County in allowing vacation rentals on ag land.

“This could be really beneficial,” said O’Hara, a former council member representing Puna. “I hope the Planning Department will be open to supporting these bills.”

Yee said his department could support that kind of legislation, although he hasn’t yet read the bills.

North Kona Councilwoman Karen Eoff, one of the bill sponsors, said she’s heard from many residents praising the county for trying to get a handle on the rentals. She said the upcoming general plan review and update would be a good time to let residents weigh in.

“Would this be one way for the community to decide?” she asked. “There does seem like there’s quite a few all over the island.”

There are indeed quite a few. VRBO, one of several online vacation rental platforms active in Hawaii, lists 3,761 properties in and around Kailua-Kona alone. Specific areas listed include 1,523 vacation rentals in Waikoloa, 1,548 in Puako, 1,891 in Keauhou, 1,576 in Waikoloa Village, 2,134 in Captain Cook, 240 in Volcano, 2,149 in Holualoa, 142 in Honokaa, 243 in Hawi, 2,276 in Kahaluu-Keauhou, 2,122 in Kealakekua, 131 in Naalehu, 2,153 in Honalo, 2,116 in Historic Kailua Village, 2,140 in Honaunau-Napoopoo, 2,286 in Kalaoa, 1,484 in Kawaihae and 185 in Kukio.

Yee said he’s asking for seven new positions in his budget, to be paid through registration fees and fines. He said the department will likely hire people on 89-day contracts in the interim.


Yee urged owners of structures that aren’t compliant with building codes or were built or added-on without building permits to get those issues fixed before applying for a vacation rental certificate.

“You want to come in; I know you’re going to be afraid to come in,” Yee said. “But I encourage the public to come and visit Planning and DPW.”

  1. KonaDude January 23, 2019 3:38 am

    What are the 7 new positions going to do? ( . Y . )

    1. reply to January 23, 2019 12:19 pm

      Give cushy government jobs to relative and friends ….that is the only reason they are created.

      1. KonaDude January 24, 2019 4:05 am

        I wish I had relatives or friends in high places, I’m all about cushy( . Y .)

  2. sdmytrenko1 January 23, 2019 5:32 am

    Sticking point: building permits that haven’t been approved…hope the new positions will be able to speed up the current process…

  3. Buds4All January 23, 2019 6:19 am

    Just Read what’s in the Bill after it passes!

  4. KonaRich January 23, 2019 6:45 am

    Oregon will be passing a state Rent control bill SB608. They have a democratic supermajority in both chamber so it will most like pass. Coming to the neighborhood soon.

    1. KonaDude January 24, 2019 9:46 am

      Oregon should worry about the measles epidemic they have before we have to build a wall around them( . Y . )

  5. Dave Thompson January 23, 2019 8:43 am

    From reading in the past, it seems that enforcement of existing laws would help more than any new bill. Not saying newer bills wouldn’t help, but non-enforcment negates ANY law.

  6. Uncle Kokomo January 23, 2019 9:24 am

    Is it just me or do the VRBO numbers look off? 1500 units in Puako? 1500 units in Waikoloa? 1500 units in Waikoloa Village? I think that you mean that there are 1500 units TOTAL on the Kohala Coast for rent, not 1500 in each area.

    1. MilitantModerate January 23, 2019 12:44 pm

      Those numbers are way too high because of the way VRBO website works. If you just enter Puako in the search you get over 300 units. But many of them are in the resorts south of Puako. If you zoom in the map to just the 2 miles of Puako road there are abou 95 units. But the numbers cited in the article are not attributed to the County or anyone else. It could be the reporter just doesn’t know how to properly compute the number for a specific area.

  7. Lance Owens January 23, 2019 9:51 am

    I just did a property search of ALL properties by owner in Puako, and actually the county combines Puako and Kawaihae as one area. So when I run them combined, (just to be safe), there is a total of 653 parcels/units, that is every single parcel/unit in the area, including State land, ranch land, homes, condos, everything. I am not great at math, but i am pretty sure that means that every single property owner, every single one of them, including the state, the park, the boat harbor, would all have to have the homes on VRBO – Twice, plus some?

    1. reply to January 23, 2019 12:20 pm

      Government worker math!….

    2. MilitantModerate January 23, 2019 12:48 pm

      Those numbers in the article aren’t attributed to the County. Apparently the reporter doesn’t know how to use the VRBO website to compute number of units in specific areas.

    3. briala January 23, 2019 2:30 pm

      This would be funny except you have to wonder how widely this completely bogus information has already spread / been factored into the planning process. Was the reporter just quoting what a government source told them? Are lawmakers using these numbers as justification for why strong legislation is needed? Are the finance folks already counting on tax revenues based on these numbers? Maybe not so funny after all.

  8. MilitantModerate January 23, 2019 12:50 pm

    So all condos that are in areas zoned “multi-family residential” will qualify to be vacation rentals?

    1. Michael Drutar January 23, 2019 3:25 pm

      They do not fall under 108, but the condo rules apply.

  9. wasabi January 23, 2019 1:17 pm

    “Honolulu contractor admits to bribery”
    Not even a mention in the Big Island news….nothing.
    and In the Honolulu papers they refuse to tell us WHO in which State agency was bribed for the Big money.
    “Honolulu Zoning Board of Appeals member Frank James Lyon admitted Tuesday in U.S. District Court that he paid cash bribes to a state agency official to secure a $2.5 million state contract for his company.”

  10. Michael Drutar January 23, 2019 3:23 pm

    West Hawaii Today needs to issue a retraction and the author of this article should be disciplined. Mark Twain said it best, “There are 3 types of lies; lies, damn lies, and statistics.” The author intentionally and with malice overstates the numbers of short term rentals so far beyond what passes a sanity test at first blush. As stated below, there are not even that many parcels entirely in Puako. The rest of her numbers and the authors credibility are therefore no longer valid. Clearly, the author did not collate her data to eliminate duplicates. I looked real quick and found that some properties were listed in Waikoloa Village, Waikoloa, and Puako. So, she’s counting some properties as many as 3 times. The same is possible for houses in Keauhou/Kona/Holualoa.

    From the beginning of Bill 108, WHT has published multiple articles which were presented as news (unbiased, corroborated, sourced) but really belonged in the Opinion section. An unbiased source, looking out for the community would ask questions, like: Has a Financial Impact Study been completed for this bill? Why not? Will this increase or decrease the number of visitors to our island? Will this reduce the GET and TAT collected, causing an increase in property taxes? With fewer visitors, what will be the impact to local business owners? What will be the impact for people who rely on a flexible second job in the tourism sector, living paycheck to paycheck?

    The other REALLY funny part is how Director Yee says that huge fines are needed, and then says the huge fines did not work in Oahu. So, basically he’s saying, this is a money grab for the County.

  11. Onolicious January 23, 2019 8:20 pm

    Let’s think on the positive side folks…

    This will crush the real estate market in West Hawaii. I suppose the County will resort to the same trick it used in the 2008 collapse when the County changed assessment value from comparable sales to “replacement” values so Hilo wouldn’t have to deal without West Hawaii tax dollar heroin it has become addicted to.

    So the value of your property will be halfed but your taxes will stay the same. Awesome!

    Perhaps Harry the Thief will get his way and get the thieves in Honolulu to let Hilo spend GET any way it wants. That will open the door for unending GET increases going to pay for ever escalating County salaries, benefits and retirement.

    We do have a pig problem on this Island, but it’s the two legged variety in Hilo, not the 4 legged variety in the mountains.

    A cop runs down a tourist cyclist and gets off with probation. You rent your spare room to a tourist so you can keep your head above and pay ever skyrocketing property taxes and you get a $30,000 fine. Sounds reasonable to me.

  12. Luter January 28, 2019 8:30 pm

    The county doesn’t even enforce the laws they have on the books now! The one thing the county is good at is making homeless!

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