If you’re not familiar with ordinance 18-114 (previously Bill 108) you should know it impacts current and future home owners on the Big Island of Hawaii in regards to short-term vacation rentals. If you’ve considered or currently own a short-term vacation rental on the Big Island you will want to familiarize yourself with this ordinance.
Hawaii County Ordinance 18-114 as of April 1, 2019 is now in effect limiting the continuance and creation of short-term vacation rentals on the Big Island of Hawaii. Short-term vacation rentals are considered any property being rented for periods of 30 days or less. Numerous restrictions and exceptions make the ordinance a bit confusing to follow but we’ve made it easy with the chart below.
Hawaii County Bill 108 is Now Ordinance 18-114
Hawaii County Bill 108 was passed which means it is now law and in effect under Ordinance 18-114.
Ordinance 18-114 limits the continuance and creation of short-term vacation rentals effective April 1, 2019.
The new law has limitations based on whether the property was previously used as a short-term vacation rental, where the property is located, how it is zoned and the year it was built.
Will the Property Be Rented for Periods of 30 Days or Less?
If a property in Hawaii County will be rented for periods of 30 days or less it is considered a short-term vacation rental and therefore Ordinance 18-114 applies.
If you happen to own a property that fits this criteria it is very important to understand the new law that effects your ability to maintain the property as a short-term vacation rental.
Short-Term Vacation Rental Community Covenants
The first question to ask, which is probably something that should have already been known, is whether or not the community the property resides in allows for short-term rentals of 30 days or less. If you are in a community without any covenants then you’re all set. But if you have community covenants you’ll want to check to make sure they do as this law does not override the rules set forth by the community.
Short-Term Vacation Rental Zoning Restrictions
Short-term vacation rentals are allowed within: (work with a local real estate professional to assist you with determining your zoning)
- Zoning District V (Resort)
- Zoning District CG (General Commercial)
- Zoning District CV (Village Commercial)
- Zoning District RM (Multi-family Residential) for multiple family dwellings within a condominium property regime (CPR) as defined and governed by chapters 514A and 514B, Hawaii Revised Statutes
- Residential and Commercial Districts situated in the General Plan’s Resort and Resort Node areas
All of these areas are considered eligible areas for short-term vacation rentals. If the property of interest is located in one of these areas all you need to do is simply apply for a short-term vacation rental through the Hawaii Planning Department. There is a one-time $500 registration fee that must accompany your application.
Short-Term Vacation Rental Exceptions
If you didn’t meet the location requirements for short-term vacation rentals above, the property is located in an Unpermitted Zoning District. But, don’t worry…..yet! There are some exceptions allowed under the new law.
Was the Property a Short-Term Vacation Rental Prior to April 1, 2019?
If the property operated as a short-term vacation rental prior to April 1, 2019 and you submit your application prior to September 30, 2019 then you’re good to go.
Well, sort of.
Three Additional Requirements
If you are able to prove short-term rentals prior to April 1, 2019 and the September 30, 2019 deadline has not yet passed then there are three additional requirements to make sure you meet:
1. Can You Prove It?
You have to be able to prove it and the burden of proof lies with the owner to the satisfaction of the Hawaii Planning Department. But assuming you can do that then you just need to meet the second requirement.
2. State Land Use Agricultural Zoning
If the property is located within a State Land Use Agricultural area and the parcel was created after June 4, 1976 then it is not able to be used as a short-term vacation rental. But if it is in this zone and the parcel was created before June 4, 1976 then all you need to do is meet the third requirement.
3. Are you current on all taxes
In order to be eligible for approval as a short vacation rental you must show that all taxes are current including:
- State of Hawaii general excise tax
- Transient accommodations tax
- County property taxes
Assuming you meet those three requirements for an exception then you meet the Non-Conforming Use Certificate requirements. Simply apply prior to September 30, 2019 and indicate that it is for both the Registration and NUC. The same one-time $500 fee applies but because the property is located in an Unpermitted Zoning District there is an additional renewal fee $250 each year.
Previous Non-Conforming Use Certificate Issued
If you are reading this after September 30, 2019 and the property is located in an Unpermitted Zoning District then the only way to get the property approved for short-term vacation rentals is to prove that the property was previously approved with a Non-Conforming Use Certificate.
If it has not been previously approved then, sorry but, you’re out of luck as no additional NUCs are being allowed.
If it has been previously approved with an NUC then you must show that the NUC is current and has not been forfeited, expired, denied or non-renewed. If it is not, then no such luck but the property can not be used as a short-term vacation rental. If there is any lapse the property is not eligible as a short-term vacation rental.
Confused About Short-Term Vacation Rental Eligibility?
So…I thought I would help you out. You’re welcome!
I put together a flow chart so you can simply work your way through the questions and see whether or not the property is eligible for a short-term vacation rental under Hawaii County Ordinance 18-114.
Here it is: (or download the PDF by clicking here)