MauiLifeStyleBlog

VACATION RENTAL LEGISLATION UPDATE
September 8, 2008
BACKGROUND: This paragraph is for those who have not been following this topic.  Maui County has been wrestling with how to regulate vacation rentals in single family dwellings for about 20 years now. Legislation allowing Bed & Breakfasts was passed but the permit is so difficult to get that there are only about 20 permitted properties in the County now, out of a potential field of about 1,000. During the administration of Mayor Arakawa (2003-06), the answer was a somewhat lassez faire approach: if they did not make trouble, the county left them alone, permitted or not. Maybe as many as 1,000 vacation rentals operated under that scheme. Mayor Tavares took the opposite approach, noting that the County Code did not permit most vacation rentals, and in July
2007 started a somewhat aggressive enforcement action against them. Since then a number of Maui organizations (Maui Vacation Rental Association, Maui Chamber of Commerce, and the REALTORS® Association of Maui) have been working to correct the County Code so these small businesses can be permitted. Since the enforcement
started, a number of families have lost their homes or were forced to sell, small businesses in the more remote areas of Maui report losing 25 percent of their business; and hundreds of visitors who used these accommodations wrote the County Council Members to say if the ban stays in effect, then they will stop coming to Maui County.
Luckily some of the Council Members, and in particular Planning Committee Chair Gladys Baisa, took the time to read these communications and took their message to heart. Since then the Council’s Planning Committee has been trying to forge new legislation that would permit vacation rentals in Maui County.
 
CURRENT SITUATION: In late 2007 the Tavares Administration proposed legislation that would have essentially shut down 90 percent of the vacation rentals in the County.
The county’s Lanai, Molokai, and Maui Planning Commissions and the Hana Advisory Committee reviewed the proposal and made changes that reflected those communities.
The outer districts generally want some vacation rentals but also want to have a say in creating unique legislation for their communities and which ones ultimately get permitted. The Maui Planning Commission was inundated with testimony for fair and balanced legislation, and as a result, their proposed amendments started opening up the scope of who is permitted again. Since March, the Council’s Planning Committee
has been wrestling with the topic. The proposal before them only deals with Bed & Breakfast properties, defined as a property where the actual owner lives. 
 
The proposal would improve the situation by allowing most vacation rentals in residential or rural zoned neighborhoods to be permitted administratively in a much quicker system.
Compared to the existing B&B ordinance, the proposal only requires the owner to live on the property – not in the same dwelling with the guests. It also would allow the rental of ohana cottages and would allow B&Bs in the rural district (like Maui Meadows). The committee initially voted against allowing a more expedited process for B&Bs to be permitted in the agricultural districts. (The current process is so complicated and
politically difficult that it took about six years for the last one to be approved, while another 50 plus applicants wait in the wings.) 
Maui Vacation Rental Association
members invited Council Members out to their properties and showed them that vacation rentals on ag-zoned properties are not only compatible with the farm activity but are, in fact, probably one of the best uses of their properties. Recently the Planning Committee reversed itself and voted to allow B&Bs in the ag zone, with some severe
conditions. For instance, that same property must produce $2,500 worth of farm income annually to qualify for a permit and must seek approval from the Planning Commission.
The committee continues to slog through other components of the proposed ordinance, such as how to tax them.
 
POLITICAL BACKGROUND: The chief advocate for vacation rentals on the County Council has been Gladys Baisa. As the Planning Committee Chair she is in the right spot to make something happen and has made it her top priority. Backing Baisa up at this junction have been Council Members Mike Molina and Bill Medeiros. Opposing the efforts for progress on this topic in the Committee have been Council Chair Riki
Hokama and Council Member Jo Anne Johnson. At the last meeting, it seemed clear that the three to two voting pattern will hold up. With three votes needed to pass the measure out of committee, there now appears to be a good chance that will happen.
The measure must then be passed by the nine-member Council in two separate readings. In addition to Baisa, Molina, and Medeiros, the measure is likely to be supported by Council Members Mike Victorino, Joe Pontanilla and Michelle Anderson.  Anderson may require additional amendments but she appears to be generally supportive. Molokai Council Member Danny Mateo is likely to oppose it. Five votes are needed for passage and we are currently counting a potential six.
It looks like a bill will be passed. The problem is what bill. The Council has exhibited a tendency to make the measure more restrictive as a way to reduce any potential problems. But the more restrictive they make it, the fewer properties will qualify under it and if we are not diligent we could end up where we are now, with an ordinance under which very few property owners could or would want to qualify.
Offered by Dave DeLeon, Government Affairs Director, REALTORS® Association of Maui. gad@ramaui.com 808-243-8585