Will LUC Find That Vacation Rentals Can’t Be in the Agricultural District?

posted in: August 2020 | 0

This month, the state Land Use Commission will resume its discussion of whether or not farm dwellings in the Agricultural District can be used as short-term vacation rentals, or STVRs.

In February, Hawai‘i County submitted a petition to the LUC for a declaratory order that transient vacation rentals aren’t allowed in farm dwellings. And the state Office of Planning seems to agree.

The county passed an ordinance in November 2018, Bill 108, that limited where vacation rentals on the island would be allowed and described how they would be regulated. The bill also established a process for owners of rentals outside permitted vacation rental areas to apply for a nonconforming use certificate.

The county denied dozens of applications for certificates from owners of existing vacation rentals in the state Agricultural District. Many of them petitioned the Board of Appeals for a contested case hearing, but the board stayed those appeals pending a decision by the LUC.

In May, attorneys representing many of those landowners filed their own petition with the LUC. In it, they argued that contrary to the county’s position, farm dwellings built after 1976 can be rented out for less than 31 days.

The county has argued that a 1976 amendment of Chapter 205 of Hawai‘i Revised Statutes to allow and define farm dwellings prevents such dwellings from being used as vacation rentals. “The effort is too cute by half,” the attorneys for the landowners stated in their petition to the LUC. “Chapter 205 expressly contemplates the lease of farm dwellings [and] does not regulate the duration of those leases. … The only question before the Commission is whether, as of June 5, 1976, Chapter 205 prohibited leases of farm dwellings for a period of less than 31 days,” they wrote.

In a response submitted last month, the county argued that the issue is not the length of time a farm dwelling is being rented out, but whether or not that use — a short-term vacation rental — is allowed under Chapter 205. Under that law, the farm dwelling’s use must be related to agriculture, the county argues.

The LUC took up the petitions at its meeting last month, but was unable to reach a conclusion before the meeting ended. It is scheduled to resume discussions later this month and has instructed the county, the landowner petitioners, and the state Office of Planning (OP) to prepare briefings to clarify their positions.

In a July 17 submission to the LUC, the OP was critical of the landowners’ petition and seemed to share the county’s position that the way the farm dwellings were being used was important.

“The Petitioners’ actual use of their dwellings is essential because it provides the facts and basis upon which to apply the requested interpretation of the ‘farm dwelling’ definition,” OP director Mary Alice Evans wrote. She added that the petitioners’ question about whether farm dwellings can be rented for less than 31 days “is not a ‘specific factual situation’ upon which this Commission can apply the definition of ‘farm dwelling’ because relevant facts and circumstances were not provided. Are the renters farming the land or is there agricultural activity providing income to the renters? Or are the renters vacationers or tourists who are not engaged in and do not derive income from farming on the premises? Petitioners don’t say. These are essential facts without which the Commission cannot provide an answer to Petitioners’ question.”

“OP requests that this Commission grant the declaratory relief requested by the County and deny the declaratory relief requested by Petitioners such that a farm dwelling may not be used as a STVR,” she concluded.

In written public testimony submitted to the LUC, several residents of Kohala Ranch expressed their support for the county’s petition.

“It has been our understanding that the Legislature did not intend for [short term vacation rental or STVR] use within the Agricultural District under the auspices of being a ‘farm dwelling.’ … Unfortunately, our quality of life in Kohala Ranch has been adversely affected by an influx of STVRs into our community. Many of us have repeatedly been disturbed by frequent and excessive noise and light pollution caused by inconsiderate vacation renters who not uncommonly occupy the rentals in large groups,” they wrote. They submitted screen shots from the vacation rental website VRBO of a number of Kohala Ranch properties — owned by some of the petitioners — being advertised for rent. Some were going for $1,400 to $1,500 a night.

Whatever the LUC decides, one testifier pointed out that the Kohala Ranch Community Association’s rules prohibit STVRs. “The fine for violation of the restriction on Short Term Vacation Rental Use shall be $5,000 (per incident) levied as an individual or specific assessment against the particular lot owner,” the Kohala Ranch Rules state.

(For more background, see, “Hawai‘i County Asks LUC to Declare That Farm Dwellings Can’t be Vacation Rentals,” from our March 2020 issue.) 

—Teresa Dawson

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