Changes could come to vacation rental law: Annual fee, expanded areas possible under new administration

  • Zendo Kern

  • A vehicle passes an occupied vacation rental on Alii Drive on Friday. (Chelsea Jensen/West Hawaii Today)

Changes, including an annual renewal fee, could be coming to the county’s short-term vacation rental registration process as the new administration evaluates the program with the hope of making it more self-sufficient.

The county in 2019 hired seven new staffers in the Planning Department to handle what at the time was a deluge of STVR applications and requests for nonconforming use certificates as the county began regulating the previously unregulated short-term rentals.

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A special fund was created, which this year is budgeted at $643,000.

The money to pay for the employees was expected to come from registration fees. One-time registration fees were $500, with an additional $500 annual fee for preexisting rental owners wishing to be grandfathered into areas where additional rentals would be prohibited after 2019.

After the initial flurry of about 4,000 registrations, there’s now a “pretty steady pace” of new applications coming in from resort areas such as Waikoloa, Planning Director Zendo Kern said Wednesday.

He said an annual renewal of registrations would be helpful to ensure continued compliance with rules governing the rentals while helping the program pay for itself.

“It’s something that we’re discussing,” Kern said, “in order to be able to maintain the level of service and staffing that was required.”

The county is still slogging through 50 active appeals now pending with the Board of Appeals.

Nineteen cases have been closed, primarily through settlement actions. Another 18 are temporarily stayed, pending a formal written ruling from the state Land Use Commission.

At issue in those cases are denials by the Planning Department based on state land use law in agricultural districts.

State law requires houses to be farm dwellings and have a connection to agriculture if they’re built on land classified under the state system as being in the agricultural district. The farm dwelling requirement took effect June 4, 1976, leading the county Planning Department to allow nonconforming use certificates only for STVRs on lots created before that date.

A number of property owners appealed the Planning Department’s interpretation, leading the county and a group of 20 Kailua-Kona, Waimea and Captain Cook landowners to ask the LUC for a declaratory ruling.

That commission, after two days of hearings, in August unanimously upheld the county’s authority to deny that use.

The LUC has not yet issued its written opinion, leading to the stay.

A LUC spokesman said Wednesday the order is still being worked on and will be posted to the LUC’s website once complete.

Cal Chipchase, the attorney representing the landowners, said he couldn’t comment until he sees the order.

Vacation rentals, which are often rented from online platforms such as Airbnb, HomeAway and Expedia, 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.

New vacation rentals are allowed only in commercial and resort nodes, leaving most of East Hawaii, such as Volcano, off-limits to the short-term stays.

That could change, however, as the county considers updates to its general plan, a process that has already taken years.

Areas dubbed “vacation destination nodes” could be added to land use pattern maps to allow short-term rentals in areas favored by tourists.

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“My plan is to look at it while we’re doing the general plan,” Kern said, saying a draft should be available later in the year. “This administration is taking a fresh look at it and moving the review forward.”

Email Nancy Cook Lauer at ncook-lauer@westhawaiitoday.com.

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