New zoning regulations screwing over existing B&Bs? (for sale, real estate)

[southpaw1227]

All,

I'm very concerned about what's going on in Kauai with regards to zoning. Two months ago, I booked a two-week holiday for April 2013 at Lolo Hale (also known as the Dilly Dally House). I visited in 2010, and it's hands-down my favorite lodging venue. This place is very special, and a huge boon for Kauai County and the state of Hawaii.

Today, out of the blue, I received the below notice from the owners.



I've Googled to no avail. What is going on in Kauai regarding zoning? How long before other B&Bs are screwed out of business?

I'm patently furious -- not at the owners, but at the County. Shutting down what's likely the best B&B on the island? Yeah, makes great economic sense. Any leads to what's going on, and / or authorities to contact to voice protest, would be greatly appreciated.

[whtviper1]

It isn't new zoning - the law was passed in 2008 restricting vacation rentals to the tourist zones on Kauai. If you were on ag land, such as the Dilly Dally - you weren't grandfathered, but you could apply for a non-conforming permit to continue to operate - sounds like the latest permit application was denied or is in limbo for whatever reason.

http://kavaassociation.org/PDF/4-4-7Bill%202204.pdf

[southpaw1227]

Wow, very enlightening. I get the point -- locals don't want their island filling up with lodging venues everywhere and destroying the land. Makes sense.

To not grandfather existing buildings, however, seems absurd. That house cost millions. Which I'm sure, sans rental fees, will be so incredibly easy to keep the mortgage up.

Ugh.

[whtviper1]

It is election time here - perhaps the Dilly Dally didn't contribute enough to the right candidate - it happens.

[southpaw1227]

Utterly sickening, but not at all surprising. If I could cancel these plane tickets to LIH, I'd consider it just to spite the county. Won't make a dent in the grand scheme of things, but man...

[PacificFlights]

I like the way the letters claim a "New" zoning thing. Talk about Island Time - 4 years to catch up on the "New"... That was a bit deceptive to me as they knew it was coming, they knew in 2008 non conforming had only 4 years to find another use before their gradfather status would go away. Seems like they were hoping for some change that didnpt happen and it went as planned, thats the B&B's fault for not planning in advance and thinking maybe they will forget about them......

[southpaw1227]

To "find another use." Are you serious? A multi-million dollar mansion built with walls and plumbing specifically to house short-term guests -- right, it's so simple to repurpose such a thing.

As I said, I fully understand why the county would want to put a stop to the trend in 2008. But to not allow existing ones to continue to operate is short-sighted at best, and pathetic at worst. IIRC, I paid some 13+% in lodging tax to -- well, someone (Kauai? Hawaii?) -- the last time I stayed. Is it really better for that revenue to vanish?

[PacificFlights]

First, i belie it was always a non conforming use under Kaui code, just there was never antything in law to make them stop. That changed in 2008. So just cause they operated without the benefit of fearing someone would shut them down for so long, doesn't mean it needs to contune as a reward for being some of the first to initially beat the system.

As for reprupse, hawaii si very good at repurposing things so don;t worry over that. By next year it will be Bill Gates vacation home from his vacation home. Anyways, who's fault was it they paid so much at the TOP of the real estate boom. They could probably fight that asseesment in todays market and get it lowered. But I think they knew this date was coming so wanted the assement to remain high for the sale they knew would have to take place when the sunset date for their gandfathered use approached.

[scottfree00]

Is this one of the illegal tvr's people been complaining about?

[PaliPatty]

I don't know the details about the Kauai issue but here on Oahu the illegal vacation rental issue has pretty much reached a critical mass state. I do know that I've seen an increase in "For Sale" signs in the yards of homes that I know are illegal rentals. These are unpermitted business ventures in neighborhoods that are zoned residential. Once sold, they revert to the residential properties they were always meant to be.
Oahu has consistently rejected grandfathering of existing illegal rentals and/or the issuing of any new permits but there have been many attempts over the past ten years or so to introduce legislation to allow such things. The public hearings where both sides present their arguments can get pretty volatile. But it always ends up the same way---rejection by the neighborhood boards and city council.
The problem is not that there aren't any laws addressing the illegal rental issue. There simply hadn't been sufficient enforcement of existing regulations and those who chose to ignore the laws could do so without fear of punishment. Maybe that's changing, given that I see so many former illegal vacation rental properties on the market?
Kauai is a much smaller and more rural island than Oahu and I imagine that there might be an even stronger opposition to turning its agricultural and residential areas into tourist meccas.
BTW, many illegal vacation rental and B&B owners routinely collect that transient accommodation tax as if they are running a legal enterprise. Two possibilities: they are pocketing it for themselves, or they are actually paying it in hopes that their properties will someday be permitted and it can appear that they were somewhat good citizens while they were violating the law. At those public hearings they often bring up their "compliance" as a bargaining point. Go figure.