Bill would regulate impact

Residents yesterday asked the Kaua‘i County Council to hire inspectors to crack down on illegal vacation rentals in an effort to give a pending bill teeth.

The bill would regulate the vacation rental industry in an effort to curtail illegal renting.

The requests were made as councilwoman JoAnn Yukimura presented a draft bill that illustrated a phenomenal growth in vacation rental units and, in most cases, would confine single-family homes used as vacation rentals in visitor destination areas.

Meeting at the historic County Building, the council’s Planning Committee continued discussion on legislation that has drawn support from vacation rental businesses and owners and critics of the industry.

The bill would affect only vacation rentals, not bed-and-breakfast businesses, for which the county requires permits to operate.

A report circulated by community leader Ken Stokes states vacation rentals comprise 11 percent of all housing and 31 percent of all rentals.

Many are found in Wailua and Po‘ipu, but the three North Shore communities of Hanalei, Princeville and Kilauea have a disproportionate share of them, the report states.

Louis Abrams, who manages vacation rentals in Po‘ipu, said many operators of vacation rentals see the need to have the industry regulated because of the impact.

“Those in the vacation rental business realize that too many will hurt neighborhoods,” he said after the meeting.

An overabundance of those commercial units will reduce the number of homes that could be rented to local residents and change the neighborhood feel of many communities, Abrams said.

Abrams said the industry has not been indifferent to the needs of the community, as “we have worked on this since 2003, when a greater number of homes were built for vacation rental use.”

The draft bill states 45 percent of the new housing units built between 1990 and 2000 were for seasonal rentals, meaning vacation rentals.

Since 2000, 1,070 of 2,050 new residential units were built for use as vacation rentals, the same report states.

A bill amendment proposed by Yukimura states the permitting process should consider the cumulative impact that a large concentration of alternative visitor units can have on a residential neighborhood.

Kapa‘a resident Ken Taylor said any bill that is passed must include a method by which rules can be enforced.

“They need to appoint some enforcement officers,” he said after the meeting. “The Planning Department should have at least two inspectors.”

Planning Department personnel already conduct inspections of illegal structures.

Taylor said it was his impression councilman Jay Furfaro suggested graduated fines for violations — something he could support.

While saying he liked Yukimura’s suggestion for fines, passage of the bill, without a way to enforce the rules, would be futile, Wailua resident Glenn Mickens said.

“I would suggest that you put the enforcement mechanisms in place first, no matter what decision you make, and then go after the problem,” Mickens said in a statement.

Taylor also said he doesn’t want to see vacation rentals located outside of visitor destination areas.

The current law allows vacation rentals only in destination areas, but is silent on whether they are allowed outside of them, Abrams said.

The omission suggests the drafters of the original law failed to close a loophole, Abrams suggested.

Abrams said a person can currently use a detached, single-family home as a vacation rental outside the zones without a permit.

The county’s comprehensive zoning rules, however, don’t allow duplexes or condominiums outside of those zones to be used as vacation rentals, Abrams said.

Taylor said he also would favor an amendment that would not allow illegally operated vacation rentals.

Ann Croydon, a Kapa‘a resident who operates a vacation rental in Hanalei with her husband, Guy, acknowledge regulation of the industry is needed, but not to the point where it can hurt her family’s financial interests.

She said she would protest any proposal to double the tax rate for vacation rentals, if that is what the council is considering.

“It would be twice what I am paying now,” Croydon said after the meeting. “I feel we are already paying for not living there.”

She said both long-term rentals and vacation rentals are commercial businesses, and if the council doubles the rate for one, it should do the same for the other.

“This possibility of doubling the tax rate would hurt renters, the very people they want to protect (through affordable housing),” Croydon said.

Yukimura’s draft bill states the potential for vacation rental use increases the value of homes, and thus their selling price and investment rating, spurring speculation.

In coastal areas and desirable neighborhoods, second and third homes and vacation rentals have forced low-to-moderate income residents to move out of neighborhoods they have called home in the past.

The council committee is scheduled to take up the bill at a March 9 meeting at the historic County Building.