Council Bill 2767 is a tragic lose-lose

The challenge of the visitor industry overwhelming neighborhoods has had much policy focus in the last twelve years regarding vacation rentals. Bill 2767 being discussed at council on Wednesday 1/22/20 is targeting the remaining 218 residential properties suspected of sharing a portion of their property as a vacation rental. My hope is this bill can be set aside until a more thorough investigation can occur of what will be the consequences to these families being effected. When a clinical look at the policy is made, it may make sense to charge all visitor accommodation at the same rate. Policy is important, but as a council member I work hard to take a deeper look at the impact on the people. I had the Real Property Tax department send me the list of the the properties, and I have endeavored to call as many of them as I can find contact information. So far, I have contacted a little over 50 households, only two of which were aware of the bill.

What I have learned is the vast majority of these people are between 60-85 years old. They inherited or bought a piece of property at a rate they could manage 40 years ago. They worked hard, built their house and raised a family. Time went by, property values soared, as did taxes and insurance proportionately, the kids grew up, personal tragedies happened, ways of being able to earn an income shifted. In an effort to adapt to the changes that life threw at people, a portion of the home went into the small business of having a short term rental. Rules, fees, requirements and fines continued to shift and change. In good faith, people spent tens of thousands of dollars exhaustively working to be in compliance. Now the rules might change again and their property taxes are likely to double or much more so with the removal of the assessment cap. The outcome for most of the people has not been a grumbled acceptance at a bigger check to have to write. It has been tears, difficult stories, and a recognition that they will most probably be forced to sell their home, possibly with not enough money remaining to find a new suitable living situation.

Who are these people and who would buy their homes? There are a wide range of unique stories. They are parents and grandparents of our bright and beautiful youth that were born and raised here, intermingled with the generational families. Some are local; more came here long ago. They are contractors, construction workers, nurses, doctors, artists, former business owners, non-profit workers, surfers, farmers, waiters, foster parents, etc. Grandparents are the backbone of this community. When we remove the stability of home ownership there is often no safe place to return to for the emerging generation that struggles to gain a foundation in our difficult economy.

Because of the location of these houses, most are now valued around a million dollars or much more if they are in or near the beach communities. These houses will almost certainly sell to an off-island investor. Our local economy does not support these prices. There will be no home to leave to the next generation.

About 25% of the list that I called were wrongly included. Already, they had paid the fines and “ceased and desisted.” They have been compelled to have a long-term renter they have trouble managing as they are now in their late 70’s and have had to return to work part time. They can’t keep up with their taxes. Their home has almost no equity and they aren’t sure how they are going to make the payments. The spouse has stage four cancer. This has been a rough month of depressing phone calls.

I absolutely cannot support Bill 2767 as I see it as a tragic lose-lose. The $1.2 million in revenue that is planned to be generated will not likely materialize with the current home owners. The hardship on the generations and freshly displace people is likely to place demand on our social services. Regardless of how well the Policy sounds behind this tax shift, the collateral damage it will create for the People sounds tragic. If you have ever had a TAT tax license or a TVR permit and are no longer renting short term, please check with the county tax office so you are not inadvertently caught in this snare.

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Felicia Cowden is a Kilauea resident and a member of Kauai County County Council.

12 Comments
  1. Rev Dr. Malama January 21, 2020 4:38 am Reply

    You took a “job” in a branch of an unlawful u.s. military enforcement agency knowing full well the impacts of the corruption and collusion that runs good people out of Hawai’i by underhanded government policies that benefit foreigners in land grabs…. oh wait! Felicia alongi Cowden, you are and have always been a foreigner in the Hawai’ian Kingdom…. who are you trying to fool, yourself perhaps?


    1. kanaka-san January 21, 2020 1:07 pm Reply

      That’s all you have? Really? Kind of tired. Seems racist to me too. She has good well thought out points. You on the other hand got nothing to offer us.


  2. IKUDIAS January 21, 2020 6:22 am Reply

    The generational families will not be affected nearly as much as the vast majority of owners that relocated here 20, 30 and yes 40 years ago, and now have children who need not intermingle so much, as have created their own version of what Kauai was & is. Let them pay the taxes!
    If they cant, the generational families will again not be affected since it will probably sell to outside investors – much like they were. I doubt they would have the compassion to affordably offer their property to a generational family, or individual – much like they were given when the arrived. After all, theyre not the naive ones. When much of the AG property was broken up and marketed – even with no guaranty of water, they knew better, it was a dream come true and now have their gentleman/woman farms, while most of the generational families shied away from more land than they could farm or take care of.
    why should they now discriminate against people from another place, looking to invest in their families and their future generations


  3. LMat January 21, 2020 9:47 am Reply

    The rest of us have stories too though…
    Are you going to call everybody on the island and hear them out too? I STRUGGLED HARD to find affordable long-term rental housing. I struggled to finally purchase my own home. I have family still struggling. We’re all struggling. We all would like rules changed and bent for our own wellbeing… that’s not how it works, especially not here in Hawaii, where it’s a constant struggle to be able to afford to live here.


    1. taml January 21, 2020 1:25 pm Reply

      You say a lot that means nothing when put in context of Felicias comments. Of course everyone has stories. No she isn’t going to call everyone. At least she called and for you to jump on her for putting it out there deserves some backlash. Rules bent? What are you talking about? This is a debate as to creating a new law not about an existing law. Of course that is not how it works. You’re not saying anything new and you certainly don’t have any authority to lecture anyone. Have anything specific to say other than general cliches?


  4. saiduki January 21, 2020 1:16 pm Reply

    Racism, ignorance, plantation mentality and jealousy control much of the decision making in county government still. Felicia is the only one of the council who demonstrates an understanding of the implications and non positive value of this decidedly discriminatory and non thought out piece of hogwash deemed a “bill” by the low IQ council members and drug addict councilperson un convicted as yet.


  5. Wa Hine January 21, 2020 4:08 pm Reply

    “compelled to have a long term renter that they have trouble managing”….

    But that aside, this is the same exact argument that has been presented time and time again from the vacation rental industry. Nothing new here. I’d like to see the list though. I’d bet a majority of them are from your district so I understand why you can’t support it. Votes are more important than local resident relief from vacation rentals that have been and are continuing to ruin our neighborhoods. Neighborhoods of “contractors, construction workers, nurses, doctors, artists, former business owners, non-profit workers, surfers, farmers, waiters, foster parents, etc. who don’t own homes or have vacation rentals in residential neighborhoods.


  6. the big kahuna January 21, 2020 7:17 pm Reply

    Kudos to Ms. Cowden for being a voice of reason. The taxes paid by home commercial use are significantly higher than homestead and in the middle of the tax code. Yep it was a compromise to level the playing field against outsiders voted into law by past council that compromised raising the taxes of outsiders by 300%. Ms. Cowden voice of reason to table the discussion based on facts vs hyperbole is a consistent position taken on most and represents a council member who takes her job serious. For many if you scream bad tourist enough times its been proven sheep will follow anything. If legal TVR cost the municipality more yes they should pay for that some, however if that 3rd party review says TVR contribute more than most should it open the door to seek refunds. Perhaps if the County acted 20 years ago or if the Planning department reduced regulations it could have planned for a population that grew by 50% in 20 years. Perhaps its time for all Kauai citizens to realize that without tourist our property taxes would triple.


  7. IKUDIAS January 21, 2020 8:55 pm Reply

    LMat- I agree with you, This elected official cites 1 supporters hardship case… what about the declining genretional residents who have stories to tell, but have not the makeup to benefit her agenda.

    Again, it is proving to be an island where a certain demographic has crested the hill, and will layout the “big plan” to save the Aina – hence the bashing of the “old boy network”, since “Everyone knows”, it can be done much better and with more aloha than before…..


  8. Dt January 21, 2020 10:09 pm Reply

    The simple solution is to separate out the vacation rental unit and tax at one rate while the main house is taxed at another rate. Last time I was in the office I got a look of a deer in the headlights when I tried to explain this. Heaven forbid the county tax office was provided with decent tools and software to do the job correctly!


  9. Rev Dr. Malama January 22, 2020 7:35 am Reply

    The Hawai’ian Kingdom is still in existence and has ABSOLUTELY NOTHING TO DO WITH RACISM…. To be a Hawai’ian National or subject has nothing to do with a race nor your genealogy!
    The treaties with more than a dozen countries still exist and that includes the usa…
    You can get some education about who’s selling what to whom here, please.
    You just need 5th grade educational comprehension to see that the Kauai County is a RUSE… as uncomfortable as it is to learn the truth.
    FACT CHECK HERE: HAWAIIANKINGDOM.ORG


  10. Everythingisawesome January 22, 2020 1:50 pm Reply

    Nothing about this letter or Bill 2767 make logical sense.

    “218 residential properties suspected of sharing a portion of their property as a vacation rental” Suspected? Aren’t these properties on already on record as being dual use? They are on record for something, otherwise you wouldn’t know that there are 218 properties affected. Isn’t that why they are taxed at a different rate? If they are operating a non-permitted vacation rental business on their property isn’t there already a means to end that?

    “Already, they had paid the fines and “ceased and desisted.”” So, you must be talking about non-permitted vacation rentals, otherwise, why would there be fines involved?

    “There will be no home to leave to the next generation” This is not unique to Kauai. Land values and taxes increase EVERYWHERE. You don’t get to opt-out of paying property taxes on property because you can’t ‘afford it’. If you can’t afford the taxes you either sell or leave it to the bank. Do people in San Francisco make this same argument? We can’t force the long time property owners of San Francisco to pay their property taxes or they might have to sell and then where will their kids go? If a property is being used as a business, guess who ends up paying the taxes? The customer pays! You, the customer, always pay. I think the argument you are making here boils down to, “This bill makes long time residents that might have voted for me pay more in taxes which they won’t like.”

    I agree that you should vote ‘No’ on this this bill, but, you should be voting ‘No’ because it’s poorly thought out legislation, not because it might create hardship for somebody. If it’s the right thing to do, then do it. If it isn’t, then don’t. If the two guys that wrote the bill can’t adequately explain the intent and justification of it in a half a page of newsprint it’s probably a bad idea. Make them go back to the drawing board and re-present it when it makes logical sense.


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