Neighbors of a Kailua-Kona vacation rental won a round Friday, when the county Board of Appeals overturned the Planning Department and revoked the nonconforming use and vacation rental permits of a resident who claimed a homeowner’s property tax exemption.
It was a rare case for the Board of Appeals as the only appeal of a granted short-term vacation rental by neighbors objecting to that use in their neighborhood. Thirty-two other appeals on the board’s crowded docket were filed by property owners objecting to the Planning Department’s rejection of their permit applications.
The fact that the property owners, Christopher and Mariya Brashear, claimed the property as their residence and took the homeowner tax exemption for several years was the deciding factor for several of the board members on the prevailing side of the 4-2 vote.
“I think this is a situational thing,” said board Vice Chairman Steven Hirakami, who voted with the majority. “Unfortunately, this slipped through the cracks, but this law is designed for the neighbors. It is designed for residential areas that are primarily other people’s primary residence.”
Dissenters said the county vacation rental law was vague on what constituted a “resident,” and they thought Planning Director Michael Yee used discretion allowed in the law to grant the STVR (pronounced by the county as “stever”) permit. The property owners were paying their transient accommodations taxes for their rentals during the applicable period, they said.
“We find ourselves like Alice in Wonderland confronting Humpty Dumpty and finding out a word means whatever I say it means,” said board Chairman James McCully, who voted no. “As a board, we have to fall back on the rule of law and that’s why we’re here to provide fairness in applying the law to all who come before us.”
Attorney Michael Matsukawa, representing neighbor Lauray Walsh, successfully argued that STVRs could be grandfathered in under the law only if they were in operation prior to April 1, 2019. While the property owners were renting out an ohana unit on the property, they didn’t qualify as a STVR because they were operating a hosted rental as primary residents of the address, not as an unhosted rental, he said.
“Whether the planning officials were or were not acting in good faith is irrelevant,” Matsukawa said. “Whether Mr. Brashear was acting in good faith is really irrelevant as well. It’s really coming down to a matter of law.”
Attorney Jason Braswell, representing the Brashears, said Yee had legal discretion to interpret a vague law, taking into account the documents provided by the property owner, such as tax returns and other proof the property was advertised on Airbnb as a vacation rental.
“If the last two-plus hours have shown us anything, it is that this code section is indeed ambiguous,” Braswell said. “We believe that the Planning Department made its decision based on full knowledge of the facts and circumstances and we believe that the determination they made was within their discretion and that it should be upheld.”
Yee said the Planning Department was hustling to process 4,000 STVR applications, including 1,000 for nonconforming use, in a 90-day period or risk having them automatically approved. The workload came with very little if any extra staff, on top of an average 800 permits the department processed during a typical year, he said.
Yee defended the department’s decision.
“It was going to be hard for an ordinance to capture every scenario that could be had,” Yee said.
Deputy Corporation Counsel John Mukai, representing the Planning Department, agreed.
“The planning director made a policy decision,” Mukai said. “There’s no ill will or anything like that. … We believe the planning director acted properly in this case.”
(This article has been corrected to remove the adjective “part-time,” as its accuracy is in dispute between two of the parties in the hearing. A reference to the homeowner property tax exemption has also been clarified to indicate it was taken for several years when the STVR application was active, but is no longer being claimed.)