Following the Forbidden Fruit I post,
several commenters asked why Kauai County allows the illegal vacation
rental trade to flourish. Others questioned whether corruption or
graft is at play.
Though I've been regaled with tales of
applicants plying planners with food and liquor, paper sacks of cash
changing hands, and county workers demanding that applicants use
certain contractors in order to gain permits, I haven't been able to
verify any of it, or get anyone to go on the record.
What seems more likely is that Kauai
County allows illegal vacation rentals to continue because it
directly profits in the form of higher real property taxes
paid by landowners who are claiming a TVR use, even though they lack
permits.
A limited review of county tax records
shows that in Wainiha-Haena alone, 11 property owners are currently
claiming a vacation rental use, or have recently switched from such a
use to “commercial home business,” even though they lack valid
TVR or homestay permits.
Another six are operating blatantly in
the state conservation district, even though such uses are prohibited
in that district and they lack county permits.
This is in addition to the 87
active and licensed TVRs in Wainiha-Haena, including four that were
issued cease and desist notices for violations, though they continue
operating pending their appeal.
.
And how many more, do you suppose, are
running completely under the county's radar? Well, that's easy enough to
find out. Just take a gander at the AirBnB site.
This is how a rural North Shore
community — one with no services and serious flood exposure —
turned into a de-facto visitor destination area and lost nearly all
of its longterm rental housing, as the county deliberately looks the other way.
It's gotta be deliberate, an
intentional inertia of political will. Because surely at least a few
of these properties are sufficiently easy-pickings to catch the eye
of the planning department. Especially when the County Council
ordered it to go forth and harvest the low-hanging fruit.
The 11 property owners include:
Patricia McConnell's Song of the Jungle; Lindon Keeler's Affordable North Shore Cottage; the Stocksdale 2000 Trust's River House; Bomun
Bock-Chung's multiple TVRs, known variously as Pinao (currently on the market for $1.29 million), Rainbow Views, Lily Pad, Dawn and
Moon; Martha Fritsch Trust's Halehanu Studio; Marcus Pettini's Hale
Haena Vacations, with two B&Bs in the same house; Andrea Smith's
TVR; David Rees' The Cottage; Steven “Esteban” Rogers, who rents
Haena Hideaway, Haena Hale and one advertised as “New! Haena Haven,” and the Guyer-Searles' Revocable Trust's Hale Ho'o Maha.
Even though they have declared
themselves as TVRs for tax purposes, many play coy or lie outright on
their websites to avoid obvious detection. Take Halehanu:
Taxes & Cleaning are included in
the nightly rate. Payment information is detailed in the initial
quote given to our perspective guest from their inquiry here on VRBO.
This studio is 'permitted' with a Transient Accommodation
Registration Certificate Hawaii Tax ID#. Our Tax ID # is posted by
law is: W91663365-0. This is a "Transient Accommodation
Certified Registration".
Perfect for a couple, for long term
not less than 180 days. If you're staying for less time as a guest of
the owner, and have been invited to this site, welcome!!
Yeah, right. Because people always
direct their personal guests to commercial websites.
Or the Lily Pad, Dawn and Moon studios,
whose website with PayPal buttons reads:
Natural Kauai by private invitation
only
Not for public use You are Booked :)
Others that previously claimed a TVR
use switched to “commercial home use” to remain under the radar
or to begin preparations for seeking approval as a homestay.
So why do people voluntarily pay far
more taxes when they're already running an un-permitted visitor
accommodation? If they're ultimately busted, will they claim they
thought it was legit because they were paying taxes all along? This
seems to be an attitude the county tacitly endorses.
How else to explain why Hale Ono
remains in operation? As I reported back on March 18, 2013, in part six of the Abuse Chronicles, it has an illegal ground floor bedroom
in the flood zone. Its first application for a TVR permit was denied,
and the second was withdrawn. But all this time it's made like it did
get a permit: paying TVR taxes, openly advertising on-line, renting
for an average of $471 per night.
Isn't that rather ripe — a
low-hanging morsel just waiting to be plucked? Especially since it
was pointed out to planning two and a half years ago. Heck, it must
be rotten by now.
Or Hale Ho'o Maha, which has been
operating an illegal multifamily TVR since 2004, and only last year
got DOH approval of its septic system. It's never ever had a permit.
Yet it continues to operate as area residents and the county contest
its bogus application for a homestay permit. But even if the
contesters win, the owners' attorney, Jonathan Chun, can appeal,
dragging citizens with no resources into court while he gets paid and
his clients continue to generate income from their unpermitted use.
It's a dispiriting fight, let me tell
you.
To put the property taxes in
perspective, Nick Michaels — whose Blue Lagoon TVR was also featured in the Abuse Chronicles — can pay his half-year tax assessment in just 10
days with his $1,500-per-night rental fee. Though he never bothered
to renew his TVR permit for several years, and the county recently
sent out a cease and desist notice, he'll be allowed to keep
operating while the appeals process drags on.
In short, there are few
to no serious consequences for either permitted or illegal TVR operators
who flout the ordinance — perhaps because the county allowed so many of them to improperly obtain their lifetime permits in the first place.
There's another force, besides filling
its own coffers, that compels the county to ignore all these illegal
TVRs. It's called the high-end real estate market. Take, for example,
that little cluster-fuck known as Haena Cove. It comprises three
vacation rentals — Hale Kamani, Lihi Kai and Hale Mahana — on one
oceanfront lot.
As I reported in part 11 of the Abuse Chronicles, the county initially denied applications for Lihi Kai and
Hale Mahana because of zoning violations. Two years later, after the
new owner hired Jonathan, the county approved the TVR permits, even
as it re-issued the zoning violations. Meanwhile, the property had
sold for $7.5 million. Now, despite receiving just two very
questionable TVR permits, all three houses are listed as vacation
rentals on their real property taxes.
I don't hold out much hope that Kauai
County will get serious about TVR enforcement. As one commenter
admonished:
Everybody should know by now especially
Joan that THEY DON'T WANT IT!
But still, it's important to keep
shining a light on this issue.
I mean, just in case you were wondering why the
county was able to strong-arm some of the mom-and-pop B&Bs into
shutting down, even as the well-heeled illegal guys keep operating
like it's business as usual.
Because it is.
Posts
47 comments:
Thank you, Joan.
If they're lucky, local folks will be relegated to the most undesirable places in the islands as Hawaii turns into a weathly-only Paradise. And another 800 decent-paying local jobs on Maui disappear as activists shut down our last sugarcane grower. And we lose the hundreds of indirect jobs that are supported by HC&S. And 36,000 acres of green turn into more develpment. Where's the leadership?
What do they even do at the planning department anyway? Certainly not their jobs!!!!!!
The county should be ashamed of themselves for letting these illegal vacation rentals continue operating all these years. It's bad enough that they approved so many TVRs in residential areas like Haena and Wainiha, but to not even enforce unpermitted ones is absurd. No wonder there are no long term rentals.
Reading the ads and comments from guests, one thing that they all seem to say is that the owners are so happy to share the "secret" spots. stop sending tourists to beaches with no lifeguards and where conditions are often dangerous. Saying you're so close to Lumahai and it's perfect for a swim (with no mention of the dangers) is so irresponsible!
Sickening!! Come on planning dept. slap down some damn fines on these clearly illegal multi family vacation rentals and all the others that continue renting in our RESIDENTIAL areas with NO permits!
It is what it is! No matter which way people get a place to stay on the island, somebody is getting some $$$ out of it! So, the visitor's industry gets it's share; the county gets it's portion; the state will, too; and so will the "legal or illegal" entrepreneurs of vacation rentals in neighborhoods.
So, the best thing to do is to have everybody make sure that they clean up after themselves. No matter what, whether you are a visitor or a resident, no make rubbish for other people to pick up after you.
Out of the $112.7 million in property taxes in the current county budget, the Vacation Rentals appeared to have accounted for $24.3 million (or nearly 22%) of the tax base. I don't think the county can afford TVR enforcement unless the homestead taxpayers are willing to endure tax hikes. Can you imagine not only the outgoing monies to put on contested case hearings, but also the lost incoming tax revenue if hearings are successful and these units are returned to the lower tax rate of residential? Someone has to pay the piper, and it's certainly been past practice to Council to say "yeah, anybody but the voters". Just look at Bill 2606, another tax cap to protect the voters. I fear vacation rentals are now a necessary part of the county's budgetary diet and there's just no hope of getting on Slim Fast without de-unionizing.
At 12:45:
"I don't think the county can afford TVR enforcement unless the homestead taxpayers are willing to endure tax hikes."
What!?! They don't need more money, they need to stop playing on the internet and taking off work early and go do their job (part of which is enforcement). Am I wrong?
can you imagine the liability the county faces when the next disaster hits and there is no way to evacuate the tsunami zone, how many people will die as a result of putting visitors where there is no way to evacuate? that's when Kauai will definately go broke, not to downplay the tragedy of lost lives due to the incompetence to enforce. There sure are other ways for the county to make up that amount of money, and not so sure your statistics don't include tourist rentals in the VDA as well. Taxing high end real estate, adding taxes to the uber wealthy real estate transactions are another instead of giving them a break with their tax in the exchange accomadation market. There are lots of ways to enforce the law that won't decimate residential neighborhoods.
No excuse for the failure to enforce the laws, otherwise why even pretend to make them, unless it's to get lots of business for ex county attorneys.
If you think the only responsibility of the county is to insure they get lots of money off of illegal operations, then you might be down with raising lots of money by taxing marijuana, which is bringing in record dollars for lots of places these days.
this whole thing with vacation rentals goes on and on assisted and face it, encouraged by the County. 3 former deputy county attorneys now work for a prominent lihue firm. One of them was the legal advisor to the planning department. Guess what a good part of their caseload is, using their knowledge and connections with county administrators against the interests of the people. tells you about ethics, personal values plus a lot of other rotten things. the foxes and the chickens live side by side in the henhouse, citizens struggle on the outside getting screwed.
this whole thing with vacation rentals goes on and on assisted and face it, encouraged by the County. 3 former deputy county attorneys now work for a prominent lihue firm. One of them was the legal advisor to the planning department. Guess what a good part of their caseload is, using their knowledge and connections with county administrators against the interests of the people. tells you about ethics, personal values plus a lot of other rotten things. the foxes and the chickens live side by side in the henhouse, citizens struggle on the outside getting screwed.
Airbnb, alternative accommodations in Hawaii may not have a big impact [on hotels], CBRE says
http://www.bizjournals.com/pacific/news/2015/12/15/airbnb-alternative-accommodations-in-hawaii-may.html?ana=e_du_pub&s=article_du&ed=2015-12-15&u=on%2BD5JX%2BQ4P9vZ4FwHt6DPuWGtI&t=1450234268
But then they don't talk about the impact on neighborhoods.
There comes a time when the bubble will burst.
This is the same thing that happened when the corruption and cover up of the Ka Loko Dam Breach.
In that case the county of Kauai and the state of Hawaii were found guilty and had to pay in the civil suit. They got away with criminal charges and Plueger was the fall guy.
No county or state employee was ever held responsible for the deaths of 7 people and 1 unborn child. But they should have been quit/fired for ineptness and corruption.
1 person has already died on an illegal TVR with an illegal structure. How many more people died from the advertisements of the secret spots on Kauai that many of the unsuspecting tourists drown and lead to their untimely deaths?
This to me resembles deregulation or unregulated industry that harms all, when a certain few scrape in the dough and laugh at these county and state clowns all the way to the bank.
These county and state workers in dept's of public safety, planning, tourism, and TVR industry should be ashamed of themselves and face criminal charges.
Do we have to go through another catastrophic event like the Ka Loko Dam breach before anything is done? By that time it will be too late and many will suffer and die. Tsunami's happen in minutes and just because Kauai hasn't had a debating one since 1960's, it should not deregulate the safety of the unsuspecting tourists and residents lives.
Something has to be done and I am writing a full report to the federal government just like I did when they audited the county of Kauai and found out that Fraud, Waste and Abuse was substantiated by cronyism and county government corruption.
Forgive my lack of understanding on permits, but doesn't it go something like this: A permit is taken out for a specified job often times small. The contractor, licensed by the State of Hawaii, has a duty to review the permit and perform work within the confines of the permit. Why isn't the County holding contractors responsible for some of the illegal activity? Too many brown paper bags with contents other than liquor? There is a level of corruption and the buck stops with the mayor. Or, maybe the mayor designed it that way. The buck$$ stop with the mayor?
The council is beginning the process to create a permanent ordinance to manage B&Bs. Once the ordinance is in place, it becomes the law land. Some County officials are in favor of an ordinance which would allow unpermitted B&Bs currently operating illegally in residential areas and in the Ag zone the opportunity to apply for non confoming use permits. If this were to happen, illegals could become legal without penalty and essentially become grandfathered uses in neighborhoods and in the Ag zone where they are not supposed to be. This would repeat of the TVR disaster the County created back in 2000, when they did the same thing, allowing huge numbers of illegal TVRs to be grandfathered into every corner of Kauai. As a result. residential neighborhoods on the north shore and south shore were engulfed. Because TVRs were allowed on Ag lands, productive farm lands were purchased for very high prices, subdivided or CPRed into gentlemen farm estates and sold to the rich TVR market. These properties will never be real farms again. Recently. several council members have expressed grave concern about out of control transient rental unit (TVRs, B&Bs, Homestay) operations on Kauai and have made critical remarks about the lack on enforcement on the part of the Plannning department. The councils' concerns are on the mark and completely warranted.
One way to turn things around is to press for an ordinance that will require all future permitted B&Bs to locate within the Visitor Destination Area/VDA. There would be no exception to this rule. The ordinance would also require that within a set period of time all unpermitted/illegal transient vacation units including TVrs, B&Bs and Homestays. be closed down. Illegal/unpermitted operations would be prohibited from applying for a permit. The ordinance would establish a moratorium on the issuance of new Homestay permits until the matter of illegal/unpermitted operations is resolved.
Those of us who are concerned see the passage of this ordinance as a opportunity to stop the further loss of neighborhoods and ag lands by speaking out about the importance of how the ordinance is worded. We are at a critical point. The forces for allowing B&Bs in residential areas and on ag land are organized, well funded and assisted by attorneys. They are pushing for an ordinance that will allow them to convert from being illegal to legal and allowed tom operate anywhere they please.
RESIDENTS OF KAUAI, KOKUA THE EFFORT TO DO THINGS THE RIGHT WAY. ASK THE COUNCIL TO PASS AN ORDINANCE TO RESTRICT B&Bs TO THE VDA. THIS IS OUR ONLY CHANCE TO CHANGE THINGS FOR THE BETTER. WE CAN DO THIS.
With respect,
Sam
The council is beginning the process to create a permanent ordinance to manage B&Bs. Once the ordinance is in place, it becomes the law land. Some County officials are in favor of an ordinance which would allow unpermitted B&Bs currently operating illegally in residential areas and in the Ag zone the opportunity to apply for non confoming use permits. If this were to happen, illegals could become legal without penalty and essentially become grandfathered uses in neighborhoods and in the Ag zone where they are not supposed to be. This would repeat of the TVR disaster the County created back in 2000, when they did the same thing, allowing huge numbers of illegal TVRs to be grandfathered into every corner of Kauai. As a result. residential neighborhoods on the north shore and south shore were engulfed. Because TVRs were allowed on Ag lands, productive farm lands were purchased for very high prices, subdivided or CPRed into gentlemen farm estates and sold to the rich TVR market. These properties will never be real farms again. Recently. several council members have expressed grave concern about out of control transient rental unit (TVRs, B&Bs, Homestay) operations on Kauai and have made critical remarks about the lack on enforcement on the part of the Plannning department. The councils' concerns are on the mark and completely warranted.
One way to turn things around is to press for an ordinance that will require all future permitted B&Bs to locate within the Visitor Destination Area/VDA. There would be no exception to this rule. The ordinance would also require that within a set period of time all unpermitted/illegal transient vacation units including TVrs, B&Bs and Homestays. be closed down. Illegal/unpermitted operations would be prohibited from applying for a permit. The ordinance would establish a moratorium on the issuance of new Homestay permits until the matter of illegal/unpermitted operations is resolved.
Those of us who are concerned see the passage of this ordinance as a opportunity to stop the further loss of neighborhoods and ag lands by speaking out about the importance of how the ordinance is worded. We are at a critical point. The forces for allowing B&Bs in residential areas and on ag land are organized, well funded and assisted by attorneys. They are pushing for an ordinance that will allow them to convert from being illegal to legal and allowed tom operate anywhere they please.
RESIDENTS OF KAUAI, KOKUA THE EFFORT TO DO THINGS THE RIGHT WAY. ASK THE COUNCIL TO PASS AN ORDINANCE TO RESTRICT B&Bs TO THE VDA. THIS IS OUR ONLY CHANCE TO CHANGE THINGS FOR THE BETTER. WE CAN DO THIS.
With respect,
Sam
The title should be called Chronic Abuse
That the abuse has been allowed to escalate like this is batshit crazy.
I have two BnBs near me on Ag land. The owners asked me if I cared about their operation.
I didn't even know they had them. These are good neighbors, quiet and mind their own business. I say leave them alone.
If their are complaints...go after the BnBs, otherwise who cares? It is their land and they are using it as they see fit with no harm to neighbors.
The government steps into our lives way too much.
But make sure complaints are not all from one person with a vendetta like the Hooser Fireplace/Openflame bill.
Sammy Lee is a good guy, but his years as the Head Cheese in DLNR, where he had absolute power on land decisions has gone to his head. His private fiefdom at the State is Pau.
Time to be a regular citizen, one man one voice.
Sam's great influence on the County just shows how powerful long term bureaucrats have become. A few decades in a high position, elbow to elbow with all the decision makers, developing relationships with the Ivory Tower and now when Sammy speaks the Council goes all a tremble.
Just like maidens getting their first kiss. Trembling, blushing and breathing hard.
6:36
you give me way too much credit. I am just one guy whose neighborhood has been destroyed by TVUs and I can't sit by and let it happen again.
merry christmas, sam
@6:36 Jealous, much?
Yeah, @6:36:
Ad Hominum attacks are always so effective, especially from some named Anonymous. At least Sam puts his name to his opinions.
@636
Taking AG land and converting it to Bnb is the epitome of abuse and hindering AG.
The fact that it does not bother you does not mean it bothers me or my neighbors (Kauai Retreat Center in Waipake)
how about figuring out how to make bad dog owners stop damn dogs from barking all the time, brah.
Sam garners respect from the council, they don't blush or tremble or any idiotic thing like dat, they just have plain and simple well deserved respect .
Well, reading today's GI, the last thing some residents want is for AG land to be used for ag. I mean who needs dairies when when we could have a new urban sprawl and another hotel.,
you know who is complaining/suing, right? Its the haoles living downwind at Bayview concerned about what might happen to their high end TVR businesses. feel sorry?
10:43
buy ear plugs
joan
thank you for doing what you do. insofar as the long running TVU debacle is concerned, kauai eclectic is the only place where one can find researched and documented historical information on the issue from then to now. If it weren't for you shining the light on troublesome issues like vacation rentals (which many would prefer stay in the shadows) the rest of would never know of the back room deals, mistruths, purposeful lack of enforcement, political games and outright efforts on the part of the county to mislead the residents of kauai into believing we need more, not fewer vacation rentals. our protectors (county government) are in reality the guys who hold the knife that stabs the suffering public in the back. the county is working for and with vacation renters against the interest of kamaaina. take for example, what has the county done about the numerous TVR violations you documented in the abuse chronicles? absolutely nothing. how can these egregious examples of violations be ignored for so long? because the fix is in, thats why. finally there seems to be a growing sense of anger among residents who are saying, enough is enough. hopefully this will translate to action by the council to put the brakes on unlawful vacation rental activity. there is no excuse for allowing violations to continue. start with the home stay ordinance.
Chronic abuse, yep, it will be interesting to see what the planning department says when it gives an update on the forfeiture letters that they last reported on. It was all a smokescreen and the only thing that seems evident is they started working on the home stay bills to cover the asses of those that were operating illegally. Hope the council will finally start working to protect the working class, rather than the landowners who invest in transient uses instead of homes for residents. The county has done a lousy job expanding the resorts into every desirable area, if they give a damn, they need to get some real enforcement going rather than making new laws to let more transient uses invade the rest.
Thank you Sam for speaking up, seems some would rather you act more local and not say a word. barking dogs? They want to change the subject , us local brothers and sisters care far more about the loss of the neighborhood. Mahalo Auntie Joan, you too are a shing example.
10:43 dogs are smart they only bark at assholes for prolonged periods. They can sense you.
3:40
a bunch of people like you are waiting to see how planning is going to explain their miserable failure with enforcing illegal vacation rentals. they don't even know how many illegal operations there are or where they are located. how about that for not having their shit together. If these guys worked for private industry they would all be fired, starting with the direct. as guardians of the zoning code their negle c has been criminal. their purposeful malfeasance has caused ag lands to be lost. whole neighborhoods have become horizontal resorts. Instead of reducing illegal operations, their efforts lean towards finding new ways to allow more and more tourist rentals to infest the island. come on council, put your foot down. demand accountability and real enforcement. don't let them off the hook again. planning is not stupid nor innocently inept. . they are following a plan which includes no enforcement and encouragement of more and more vacation rentals. this is not fantasy. look at what has happened to kauai and the role planning has played. planning does nothing without the knowledge and backing of the mayor. with vacation rentals they are playing the rest of us for suckers.
How's your B&B doing? Sell out.
2:13
I actually could not fiqure out why all these realtors and newbies were complaining about the dairy. I think you have provided some insight. The thing is, dairies don't smell bad to me. In fact it is nostalgic. I think of Waimea and Nukolii.
joan
Your research on illegal vacation rental cases is truly amazing. You name names, identify locations, detail violations and even show pictures. What you do is the most difficult part of any enforcement action; locate, identify, describe, document. You serve this information on a silver platter to your readers which includes Planning. One would think Planning enforcement would be on their knees thanking you for doing their work for them. With much of the heavy lifting done, you would expect Planning to be all over these cases. About all that really happens is feathers get ruffled, faces pout and your research is ignored. How can this be ? Well, its's because taking these rich violators down (or any violator), is not part of Plannings plan. It's as plain as day.
@6:36 am.
I think you are totally missing the point. The topic isn't Sam Lee but your infatuation is acknowledged. The topic is the potential to have an open season for B&B' s in all residential districts.
No 8:26
This cannot happen again.
It's ridiculous the county would even consider more fake TVRs before they get control over the illegal uses so obviously going on. Sure hope the council does its job instead of passing the buck again. Planning commission should be so ashamed of themselves for passing this rotten b&b bill to the council. Does PC just do what they are told without even thinking? Sure seems so. Bernard should replace the whole bunch except Angela, who had the good sense to vote against it. It looks fishy, smells fishy, and stinks.
Bernard is the guy telling the PC what to do
Bernard is the guy telling the PC what to do
The county makes no money off the whiners and complainers like Joan. They do make tons of the illegal rentals, B & B's and home stays. MY neighbor has a rental on her property. She chooses to live in a small cottage and rent the main house on occasion. They are retired and otherwise would lose their home due to rising costs and shrinking interest rates. They would never long term rent it out so it does not take away any housing for residents. This allows them to survive. They are kind, contribute to the community and are not greedy people. Occasionally I here children laughing and screaming while enjoying the swimming pool next door. I see it as a blessing, not a disturbance. Not everyone has ill intent but it is hard to tell one person, "Oh you missed a deadline to apply", while you allow another to legally rent their home. Rules must apply to all as we are a free country that claims to provide equality to all.
Happy Holidays to all….
Free country, but zoning laws
No such thing as good illegal and bad illegal. Your pals are kind, contribute and are not greedy, you say.. But they have no permit. whose fault is that.
so what does that make them. here's a hint. ill_g_l.
Today's Star/Advertiser contains an article about a practice of the state Tax Department that is not only surprising but also an insult to common sense. Few citizens are aware that State Tax issues a Transient Accommodations Tax license (for vacation rentals) to anyone who applies; without regard to whether the applicant has a legal operating permit from the County in which it is located. Mallory Fujitani spokesperson for State Tax was reported to say they were not concerned with whether the rental is legal or illegal; that being the responsibility of the Counties. While technically correct, their stance makes it doubly difficult for the Counties to enforce against non permitted operators who frequently claim immunity because they pay the TAT. Thank goodness for Senator Theilen who will introduce legislation to prevent State Tax from issuing TAT licenses unless the applicant can prove they have a County permit. Why does another law need to be passed to force State Tax to do something (stop issuing TAT licenses to non permitted operators) that should be guided by no more than common sense? The need to generate tax revenue is a consideration, but how does State Tax justify collecting tax dollars from TVUs that for the most part are illegal operations?
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