HA'ENA, Kaua'i — The Ha'ena shore is one of the premier places for a vacation rental in Hawai'i, with its soaring green mountains, white sand beaches and clean blue water. But the supply of places to rent may soon dry up.

The state has warned 16 Ha'ena coastal landowners that they can face daily fines of $2,000 if they continue to rent out their houses in the state conservation district.

Many of the homes are luxury properties with sprawling lawns that flow out to the naupaka hedges and sandy beaches between Ha'ena Point and Limahuli Stream. And while owners may use the properties occasionally, most spend at least some of the year being used as vacation rentals. A few of the homes in the area are also long-term rentals.

The state doesn't distinguish between short- and long-term rentals and has given owners a June 30 deadline to stop renting out their properties.

"Rentals are categorized as a commercial use in the conservation district," said Peter Young, chairman of the Board of Land and Natural Resources. Such a use requires a permit, and none of the homes has such a permit, he said. Warning letters over Young's signature went out dated March 23.

Some folks are wondering why these particular homes in this particular conservation zone were targeted, rather than others.

"I thought this was an ill-conceived plan that was poorly executed," said Jane Abramo, owner of Na Pali Properties.

"Not everybody (who rents out their home) got a notice. It didn't seem to matter what year they (the houses) were built. And what about other conservation districts in other areas," she said.

Young said that any commercial use in the conservation district requires a permit from the Board of Land and Natural Resources.

"We're giving people a time to cure (their violations). No fine is being imposed at this time," Young said.

Property managers say the state's threat creates an extreme hardship for many visitors.

"Some of these guests have scheduled these plans as far in advance as two years and paid in full. They have also paid for their airline reservations, rentals cars, and most amounts are nonrefundable," said a letter faxed April 4 to the Land Board by Hanalei North Shore Properties.

One homeowner's letter from Young includes a copy of the permit under which the house was built more than 25 years ago. The permit includes this condition: "That the single family dwelling not be used for rental or any other commercial purposes." It also requires that the condition be recorded as part of the property's deed.

Young said the issue shouldn't be news to anyone with property in the conservation district. He said there are agenda items nearly every meeting of the Land Board involving permit requests or violations of conservation district regulations.

He conceded that the Ha'ena situation might be confusing to an outsider since most coastal homes from Ha'ena Point east to Wainiha Bay are not in the conservation district, while their neighbors to the west are, and there are no obvious differences in the topography.

He also said some owners are asking for an extension, and the department is considering that.

Abramo said it would seem to make little difference from a land-use perspective whether a home's occupant is an owner, a long-term renter or a vacation renter.

"If they're going to let the homes be built, let them be occupied. I think that the state has some questions to answer about who got it and why," she said.

Reach Jan TenBruggencate at jant@honoluluadvertiser.com.