Kauai Council tackles vacation rental regulation on ag lands

KAUAI—The Kauai County Council yesterday took on the thorny issue of regulating transient vacation rentals (TVRs) on agricultural land.

When the Council adopted an ordinance last year that attempted to halt the island’s burgeoning vacation rental industry, it declined to include ag land TVRs in a permitting process for existing TVRs outside the designated Visitor Destination Area.

The exclusion sparked an outcry from affected ag land owners, who rent homes at rates ranging from $100 to $4,500 per night. Some said they had been operating vacation rentals for years, and had a vested right to continue. Others claimed they bought their land believing they could operate vacation rentals and that they would face financial hardships if they aren’t allowed to continue.

In response to those concerns, former Councilwoman JoAnn Yukimura drafted a bill—introduced by Councilman Jay Furfaro—that would allow ag land owners to continue their TVR operations pending completion of the county’s Important Agricultural Land study.

In defending the bill at yesterday’s public hearing, Yukimura said it would amount to a “holding action” for the pre-existing TVRs on ag land. “Those legally operating prior to enactment of the [March 2008] law can be grandfathered,” she said. “We are speaking of a limited set of vacation rentals.”

The county has received 41 applications to run TVRs on ag lands, although the planning department said the actual number now operating is likely higher.

Councilman Kaipo Asing asked Yukimura if it was her intent to allow TVRs to continue operating on ag land that is not deemed “important.” Yukimura said such activities could continue under an enforcement agreement.

The planning department, however, said that an enforcement agreement “is not an appropriate tool for a broad land use policy decision such as this. The decision to allow or not allow TVRs on ... ag land should be made through a positive acknowledgment through ordinance and proper evaluation through permitting procedures.”

Caren Diamond, a member of Protect Our Neighborhood Ohana (PONO), an organization formed to halt the proliferation of TVRs in the residential communities of Hanalei, Wainiha, and Haena, urged the Council to reject the bill.

“I ask you not to make our ag lands a resort as well,” Diamond said.

Several ag land property owners testified in support of the bill. One said such uses were written into his deed, while another said that no one had told her she couldn’t use her house as a TVR when she bought her ag land three years ago. Another man told the Council to consider the economic implications of halting such uses.

The issue is complicated by Act 205, a state law that allows only farm dwellings on agricultural lands. The law also prohibits overnight accommodations. But the county has received various legal interpretations of the law, and even the state Legislature refused to clearly define what constitutes a farm and a farm dwelling.

Attorney Jonathan Chun, who represents numerous ag land TVR owners, said such accommodations should be allowed if there’s also “adequate ag use” on the land. The county needs to begin making a case-by-case determination of owners in compliance, he said, and the proposed bill merely delays that process.

“These are the issues you have to address at some point,” Chun said.

The issue of “taking” also has been raised by attorneys who claim their clients are being denied full use of their land if they can’t operate vacation rentals. On Tuesday, attorney Dan Hempey said court might be the next step for a client who failed to convince the county Planning Commission to reverse a denial of his ag land TVR permit.

But Hempey told the Council yesterday that he is “actively discussing a solution to the problem” with county attorneys. Hempey has proposed matching prospective farmers up with ag land TVR owners so the land can be farmed.

But Diamond warned the Council against issuing any permits, even temporarily, to ag land owners.

“Once people get approval, then they’re considered vested,” she said. “And once it’s found they have important ag lands, I’m not sure how the county would take that [TVR use] away.”

Diamond and farming groups also have expressed concern about the role that TVRs play in driving up the cost of ag land, making it unaffordable for farmers. Diamond said that PONO’s study of TVR valuations found that properties engaged in such commercial uses were valued 30 to 40 percent higher than those that weren’t.

Following the close of the public hearing, the issue was sent to the Council’s planning committee, which will take up the bill at its September 16 meeting.