Council hears vacation rental update

HILO — West Hawaii accounts for 82% of the county’s short-term vacation rental applications in permitted areas and just 25% of those in non-permitted areas, according to a report discussed Tuesday by the County Council Planning Committee.

That stands to reason, with the Kona-Kohala coastline home to most resort zones. East Hawaii, on the other hand, has large swaths of land in agricultural districts, where a nonconforming use certificate is required, if the property owner is granted permission for a vacation rental at all.

In all, an estimated 4,000 applications have come in, with about 1,150 of those in nonconforming zones.

Only 900 applications have been processed, and close to 80 or 90 permits were denied, Planning Director Michael Yee told council members.

“We could see another 30, 50, who knows,” Yee said.

The massive workload in Planning did, as reported, slow down building permits for everyone, Yee said. But the time to get a building permit has now dropped from three months during the busiest times to one month, he said.

North Kona Councilwoman Karen Eoff, the cosponsor of the new law, praised the department for its hard work.

“Nobody could have really realized the impact that this would have,” Eoff said.

Eight denied cases are headed to the Board of Appeals, Yee said, and “it’s just the beginning.”

He expects several of the cases to go on to circuit court and beyond.

“Once those big cases clear, it will set precedents that will make it clearer,” he said.

Most of the denials relate to a state land use law that restricted structures to only farm dwellings in lots created after June 4, 1976, in agriculture districts. Others were denied because of shoreline violations in special management areas or for illegal or unpermitted structures.

Neighbors of applicants in nonconforming areas have been vocal in their opposition to vacation rentals in their communities, with only a few sending in positive letters. About a third of the properties seeking nonconforming use permits have drawn more than 1,000 written comments.

“It’s overwhelmingly negative,” Yee said. “Regular working people don’t want vacation rentals in their neighborhoods.”

Vacation rentals are defined as dwelling units where the owner or operator does not reside on the building site, that has no more than five bedrooms for rent and is rented for a period of 30 consecutive days or less. Hosted rentals, such as bed and breakfasts, are not covered in the new law.

Yee said early estimates put the number of short-term rentals at 6,000 to 8,000.

“That leaves the question, who’s out there … How many are hosted and how many are illegal,” Yee said. “Nobody knows the number, but I’m sure it’s not a small number given the experience of the other islands.”

Vacation rental applications are now allowed only for dwellings in resort, multifamily or commercially zoned areas. Those who were already operating in unpermitted areas had to apply for and not be rejected for nonconforming use certificates in order to continue past Sept. 30.

Even with the easier access to a vacation rental permit, several testifiers said more needs to be done to tweak the law, now that it’s been implemented. The limit of five bedrooms is particularly hurting upscale rentals in North Kohala, where houses of up to nine bedrooms are common.

“It seems maybe the vacation rental homes have fallen through the cracks,” said Alan Brockton. “A blanket has been taken and covered the entire area.”

Planning consultant Zendo Kern said there have been a lot of issues with his clients getting copies of all the required permits, especially from the 1970s, ’80s and ’90s. A lot of permits, once closed, were not entered into the system, he said. there have been a lot of bumps in the road, but progress is being made, he said.

“A bill like this that is massively impacting our island — to get up to speed and have it figured out and have the system in place in six months is really a challenge,” Kern said. “There’s a lot of positive, but there’s a lot of whoa, whoa, this was a really heavy undertaking.”