B&Bs back before council

LIHUE — Should you be able to rent out part of your property as lodging for tourists, even if you don’t live within a designated Visitor Destination Area?

That’s the question that will be discussed at the Kauai County Council meeting on Wednesday. The bill amending the current rules will be making its first appearance on the floor.

If the bill garners council approval, it would set a limit of one B&B operation per lot for any property outside of the VDA and ban B&Bs in agriculture and open zoning districts.

Council Chairman Mel Rapozo said he believes there is a need to limit the number of homestays per lot. Councilman KipuKai Kuali’i said he agrees there should be a limit of homestays per lot as well, but that homestays should be allowed only inside the VDA.

“We need to protect our island’s neighborhoods from speculation, over-development and added traffic congestion,” Kuali’i said. “We also need to think about all of our existing hotel operators and the many, many jobs they provide to our residents.”

Councilman Ross Kagawa said having any homestay operations outside of the VDA isn’t something he can support.

“My thing is that tourism activities should be in the Visitor Designated Area and not in residential neighborhoods,” Kagawa said. “(If) we don’t control tourist operations in residential neighborhoods and agriculture, we’ll be priced out of this place. It might be our kids that can’t live here, or their kids, but if this keeps happening, we will be priced out of this place and we’ll have to move.”

Kagawa said it doesn’t make sense to him that the island’s hotels aren’t at full occupancy, yet tourists are renting rooms in residential areas.

“Why are we encouraging tourists to stay in residential areas and rent when the hotels aren’t fully occupied” Kagawa said. “You can find one that’s cheaper in the residential area instead of a hotel, (that’s why). If we didn’t’ allow that, then it wouldn’t be an option.”

The proposed amendment also removes the current limit on the number of applications the Planning Department can process, creating an open season for homestay use permit applications.

The current limit is 10 applications per year and that is something Kagawa says is imperative to keeping a lid on illegal Kauai homestays.

“We need to stop it already, we don’t want to become Honolulu,” Kagawa said. “It’s worse than Kauai, but we’re not far behind because our planning department has no clue as to what’s out there right now.”

Kagawa said that even now the homestay scene on Kauai, and in all of Hawaii, is “like the wild west” because planning departments on all of the islands don’t know how many people are operating illegal B&Bs out of their homes.

“A lot of it is unregulated and we need to get a handle on this problem,” Kagawa said. “(There should be no) permits moving forward until we know what’s currently out there.”

Rapozo said he’s all for placing a limit on applications, but “we cannot arbitrarily pick a number.”

“There needs to be a nexus to the number of applications that we allow,” Rapozo said.

The proposed bill also limits transient accommodations to 29 days, and outlines operation requirements, like posted signs with house rules, and designated, off-street parking for every room in a B&B. The bill also requires B&B owners to be on their grounds pretty much all the time.

The bill states that owners must be “physically within the County of Kauai, residing at the homestay operation site, and physically available for the needs of their respective homestay guests.”

Nobody else can stand in the owner’s shoes while they’re away, either, according to the amendment, which says, “no other individual … may act on the owner behalf to meet the requirements …”

“A homestay, or B&B, is different from any other transient accommodation. It was intended for the owner to reside in the residence and be a host to the visitor,” Rapozo said. “This is a very important component to a homestay ordinance. I will not support any bill that allows absentee ownership of any homestay operation.”

The last part of the bill requires property owners to renew their homestay zoning permit annually, with proof of a valid GET and TAT tax licenses, and a cost of $750 every year. Property owners also have to prove that they live in the same buildings as the B&B in the year preceding the date of renewal.

The amendment also allows the Planning Department to re-inspect properties on an annual basis while approving the renewal application.

“I would like to see an effective and easy mechanism in place whereby the immediate four or five neighbors surrounding a homestay B&B operation could call for a nuisance-causing operation to be denied their annual homestay permit renewal,” Kualii said.

This bill is another in a long line addressing issues with the homestay industry on the island, an issue that caught fire in March of this year when the Planning Department targeted illegal TVRs.

They sent nearly 100 cease-and-desist letters threatening fines of up to $10,000 a day if operators didn’t shut down within two weeks. Several B&Bs got caught because they didn’t have the correct permit to operate, which they said historically hasn’t been enforced.

In June, the ink dried on a new bill narrowing the definition of homestays, generally known as bed-and-breakfasts, or B&Bs. The goal was to ensure a property owner lives onsite as a way to prevent the operation of illegal TVRs outside of the island’s designated VDAs.

It was a loophole in the law that once allowed TVR owners to operate vacation rentals anywhere by leasing a property to a tenant that would then operate it as a B&B.

The bill put an end to that by requiring the owner to live on site, and to qualify for a homeowner’s property tax exemption in order to operate as a B&B.

It also denies the use of guesthouses for accommodations at B&Bs, and outlines the requirement for a special permit when it comes to B&B’s located on agricultural land, which is just one of the things that’s up for change in this proposed amendment.

It’s early in the process and the bill will be reviewed in council and committee meetings.

The council meets 8:30 a.m. Wednesday at the Historic County Building.

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