What, exactly, is going on in Hawaiʻi County? Its own laws and rules specifically forbid the operation of vacation rentals on properties that lie within the state Agricultural District.
It passed an ordinance in 2018 that limits these uses to very clearly defined zones that do not include Ag land – except when the rental is on a lot that existed prior to June 4, 1976. The Planning Department’s Rule 23, promulgated in response to that 2018 ordinance, also says clearly that short-term vacation rentals are allowed only in the “Permitted Zoning Districts” – which, again, do not include any land in the state Ag District, excepting those lots that were in existence nearly half a century ago.
Heck, the county even won a ruling from the Land Use Commission, upheld by the Supreme Court, validating its position that under Hawaiʻi Revised Statutes Chapter 205, short-term rentals were not a permitted use in the Agricultural District.
And yet…
Short-term rentals of properties in the state Agricultural District continue to be allowed and even encouraged – with the county claiming in a court filing in July that the Supreme Court ruling applied only to non-hosted rentals; with the former planning director “interpreting” a family to include one family of however large a size plus four unrelated individuals; and with a deputy corporation counsel arguing before the Board of Appeals that a home in the Ag District that rents for multi-thousands of dollars a night is not a commercial use.
Our cover story looks at the fraught history of just one of the many short-term rentals of homes on Ag lots in Hawaiʻi County. But a random check of records available on the county’s EPIC website shows Kona Kai is far from the only one where neighbors of vacation rental properties have lodged complaints with the Planning Department about parties, traffic, loud guests, and the like.
After many queries to the Planning Department and permittees to get to the bottom of this issue, we were given two documents that go far to explaining – if not justifying – the county’s policies on both hosted and unhosted vacation rentals on Ag land.
To say the least, they are bewildering. The determination of what counts as a lot pre-existing in 1976 covers probably every lot in every subdivision created since the demise of sugar, thanks to counting as a “lot” every portion of a Land Court award, or a remainder, or a grant, regardless of how these may have been absorbed into discrete parcels in the county’s property tax records.
The use of “farm dwellings” for both hosted and unhosted vacation rentals runs contrary to common sense, but common sense flew out the Planning Department window decades ago.
As to former planning director Zendo Kern’s “interpretation” of what constitutes a family as it relates to the use of dwelling units – what can be said? It would be laughable but for the consequences.
Frankly, what is occurring in Hawaiʻi County with respect to short-term vacation rentals in the state Agricultural District is tragic.
Should the county not ultimately prevail in the litigation now before the Intermediate Court of Appeals, it could well face several difficult choices.
It could require the owners of vacation rentals to petition to have their land placed in a different state district classification (Rural or Urban), where the county allows short-term vacation rentals. The county has the authority to redistrict parcels of less than 15 acres, but spot-zoning is not allowed. And the prospect of the county filing a petition with the LUC to move whole neighborhoods now in Ag into Rural or Urban would be an uphill climb.
It could invalidate all the existing permits or indulgences granted to operators of vacation rentals. That would seem to invite legal claims of damage, since for years the county had allowed such operations to continue unhindered and owners, such as Eisert, had made investments in the belief that the vacation rentals were blessed by the county.
It could, finally, ask the state Legislature to amend Chapter 205 to include vacation rentals as one of the listed allowed uses in the state Agricultural District. This, however, might well put paid to any dreams that the state might have of moving in the direction of agricultural self-sufficiency. If it is more profitable to have a vacation rental on an Agricultural parcel than it is to raise crops or livestock, then that parcel might never be put to productive agricultural use again. One need only look at the fate of former sugar land in Launiupoko, Maui, to see what happens when Ag lands are converted to gentleman estates.
Recently, the Hawaiʻi County Council received a report it had commissioned on the economic impact of short-term vacation rentals. The report, from Hunden Partners, concluded that in 2024, lodging revenue from STVRs amounted to around $710 million, a sum comparable to revenue generated by island hotels. It went on to report that around a quarter of all STVR users “would not travel to Hawaiʻi Island if this lodging option were unavailable.” Losses to the county’s portion of the state Transient Accommodations Tax would amount to between $3 million and $5 million annually, while some 12,000 full-time jobs and 30,000 part-time jobs would be lost.
Does the fear of revenue loss lie behind the decisions that compromise the island’s agricultural potential?
The report does not state how many of the existing STVRs are on land in the state Agricultural District, so it is impossible to know or even estimate the potential cost to the county of eliminating STVRs on Ag land. Yet the loss of revenue would appear to be the only reason for the county’s adoption of convoluted and bizarre policies that allow and even encourage their proliferation.
Hawaiʻi County at one point seemed resolute in its determination not to allow the gentrification of Agricultural lands. Now that that has changed, the result is a hopelessly confused mess.
(For further background on this subject, see the cover article in our September issue, “Hawaiʻi County Presses ICA to Allow Vacation Rentals on Ag Land.”)
Chris McKenzie
Good-by Hawaii as we knew it. Money talks. Naturally, landowners want to make as much money as possible from their property. Gone is the sense of community in which neighbors care for each other, bask in a sense of community, enjoy the quietness, serenity and sanctity of a family home. Unfortunately, the charm that made Hawaii a desirable tourist destination is replaced by an ever increasing appetite for money. Hawaii’s residential homes will mostly become tourist rentals. Many residents will probably move to places where tourism is not the main industry. Legislators are unable or unwilling to see past the next election and have become addicted to tourist-related tax revenues. There will only be two classes of residents left: the very wealthy and those who serve them. The latter will remain angry that their dream of moving up the economic ladder is mostly foreclosed. Kudos to Environment Hawaii for trying to stem the tide but I’m afraid it is more than uphill battle.