Kauai Vacation Rental Controversy

August 19, 2007 by susannakunkel.

For the past 2+ years, there’s been an ongoing controversy on Kauai about privately owned vacation rentals in residential areas.  A citizen’s group in Haena spearheaded a call to action by the County to start regulating the use of private residences as Vacation Rentals or B&B’s.  There have been countless meetings (I’ve sat through several..), a $70,000 study done, various proposed ordinances, etc.

The action by the County is being promoted as being in support of creating more long term affordable rentals.  That’s a good goal, but stopping vacation rentals is not going to create affordable housing.  The County is applying zoning that was set up in the early 80’s to regulate what was then a booming timeshare business.  The CZO (County Zoning Ordinance) designated specific locations as Visitor Destination Areas (VDA).  Princeville is considered VDA, most of Poipu, parts of Wailua, but none of Hanalei or Haena.  It’s so crazy that there are areas in Poipu where one side of the road is VDA, and the other isn’t…  An article in today’s Garden Island gives an update on legal action taken against 14 owners in Haena who have homes on Conservation District land.  They have been the first owners to have legal action taken against them. 

Homes along the beautiful Hanalei Bay (pictured below) will never be low-income rentals…

I sold a home last year that was an active B&B and the owners did everything they could to be compliant with the laws.  The County was saying at that time, that the only way for a B&B to be “legal” is to obtain a Special Use Permit.  However, they are not issuing any Special Use Permits due to the pending ordinance.  So, what do you do?  Pay the taxes and do the best you can to comply

What’s the future hold?  The growing market for Vacation Fractional Ownership is the perfect solution for vacation rental homeowners who are being targeted by this ordinance.  Many owners use their property as a 2nd home, coming to Kauai for part of the year and offsetting the ownership expenses with vacation rental income.  For those owners, developing the home as a fractional offering is the perfect solution.  You can keep 2-4 months for your own use, and sell the rest!  That’s a positive way of liquidating equity, retaining the use and enjoyment of your home and avoiding any issues with vacation rentals.

For more information on current Fractional offerings as well as developer resources, check out my website at www.ResortSecondHomes.com. 

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