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Posted at 7:39 p.m., Friday, September 14, 2007

Bed-and-breakfast, vacation rental ordinances due for upgrade

The Maui News

WAILUKU — The Maui Planning Department's draft bills for bed-and-breakfasts and transient vacation rentals are both more and less restrictive than current ordinances.

If passed by the County Council, they would wipe out TVRs in the rural and agricultural districts, but they would expand bed-and-breakfasts into rural-zoned neighborhoods and ease the permitting process where B&Bs are allowed.

B&B operators would, in most cases, have their permits approved by the planning director, without having to go to a planning commission or the County Council. TVR permits would allow 20-room rental operations in business districts, including Paia, Makawao, Haiku and Kula — but probably not Hana, where a community plan provision would supersede the zoning.

Planning Director Jeff Hunt says he and his staff took the TVR bill (the former Council Member "Bob Carroll bill") that the council rejected in February, tried to remove the parts the council didn't like and "tweaked" the rest.

The B&B ordinance (Chapter 19.64), which has been around for a while without generating nearly as much controversy as transient vacation rentals, is being updated. No change, however, is proposed for the restriction that prevents ohana units from being used for B&B.

The three-tier B&B standard in Chapter 19.64 would be scrapped. Under the current ordinance, a two-room B&B is approved by the director; a four-room B&B has to go to a planning commission; and a six-room has to go to the council.

Under the draft, all B&Bs up to six rooms could be approved by the planning director, unless 40 percent of lot owners nearby protest, or if there is an existing B&B within 500 feet.

That is part of a streamlining process, said Hunt on Wednesday.

Transient vacation rentals — short-term rentals that may involve separate houses as well as condominium units — have been hung up for years trying to get permits.

It is also part of a rethinking of where to put small rental operations.

"It's important to distinguish between B&B and TVR," Hunt said.

A B&B has an owner (or resident lessee) on site.

A TVR may have owners on the lot, if not in the same structure, in which the rental rooms are located. The requirement to be a B&B is that the home is shared with guests.

It's a matter of control, says Hunt. An owner on the Mainland cannot control his customers, while a homeowner should have a dampening effect on the exuberance of his guests.

Until now, B&B has been restricted to urban business or residential zones.

"A true B&B should be like a residential use," Hunt said.

Therefore, he is proposing to allow them in rural residential neighborhoods. Neighbors would have to be informed individually of the application and the general public by a notice board on the street.

When the original B&B ordinance was being considered, it started out as a bill to provide for transient vacation rentals but ended up as a less comprehensive law specifying bed-and-breakfast uses.

An association of B&B operators estimated at the time that perhaps as many as 800 short-term rental vacation businesses were operating in Maui County.

The council chose to restrict the ordinance to operations within the structure in which the owner lived. That excluded B&Bs using ohana units. The restriction to residential, business or resort districts further limited the number of house owners who could possibly become legal.

Hunt says his staff discussed the no-ohana clause "at length." There was some sentiment to change it, "but I couldn't get consensus." He said he doesn't know if the council "will be prepared to liberalize that."

He thinks the conversion of ohanas is "one of the reasons why the bill was defeated."

Hunt says he understands that provisions for ohana units — allowing a second house on a single lot — were put into place to provide additional housing for families and for long-term rentals. For many house owners, the ohana concept quickly evolved into a commercial operation that provided small but comparatively affordable housing to strangers.

In the preamble to the TVR ordinance, the justification for restricting TVRs is that "long-term residential housing shall not be used for transient vacation rentals except for these areas designated for transient vacation rentals. Long-term housing inventory is being lost to the proliferation of illegal transient vacation rentals."

The Maui Vacation Rental Association, citing a study by the Kauaian Institute, challenges that assertion. At a forum on transient vacation rentals held Wednesday evening at the Iao Theater, MVRA President David Dantes asserted again that most TVR buildings are so costly that even if they were converted to long-term rentals, they would not be affordable to working people.

John Rapacz, attorney for MVRA, said Thursday that the assertion that long-term housing is being diverted to short-term is "an opinion." He said the Planning Department has never provided any studies to back it up.

In an attempt to make it a little harder to build a mansion with the intent of making it into a business, there is a provision in the bill that permits could only be granted for buildings that exist.

A landowner could still build his big house, Hunt says, but there would be the risk that he would fail to get it permitted for vacation rentals and would have to live in it himself.

However, there is an idea circulating that would allow conversion of a long-term ohana to short-term, "if (the owner) pays a fee to replace that rental unit.

"We're open to that," Hunt said.

Hunt also said the objection to TVRs in the ag or rural zones is that mansions rented to vacationers adjacent to active farms "puts pressure on ag land," despite the state Right to Farm Law, which is intended to protect farmers from complaints about dust, noise and other bucolic nuisances.

The TVR bill would eliminate the county use permit option to get a house rental business authorized in the ag or rural zone.

Today, an ag owner has the option of seeking a state special use permit and a county conditional permit. In most cases, this puts the county in control, since planning commissions are authorized to issue the state permit only informing the state Land Use Commission of their decisions.

The draft bill developed by Hunt and the planning staff would allow B&Bs in ag or rural districts, but only on a working farm that could demonstrate its legitimacy by showing annual farm receipts of at least $35,000. That is the same requirement to get a state special permit for a third, farm employee dwelling on an ag lot.

While the proposal would chase TVRs out of ag and rural areas (which would include much of the north shore, where they have proliferated), it would specifically extend their area to the four resort areas of Wailea, Makena, Kaanapali and Kapalua. (The exact boundaries would be established by maps that have not been fixed yet.)

Otherwise, TVRs would be allowed only where the zoning ordinance specifies. Currently, those are the airport and hotel districts.

All B&B or TVR applications would have to be consistent with community plans and the General Plan. Hunt noted that the draft is written to reflect the community plans as they are now.

The Hana plan, for example, blocks TVRs.

Since the plans are being reviewed, by the time the bill is debated it would be changed to reflect any changes in the new plans.

The drafts currently are scheduled to be presented to the Maui Planning Commission at its meeting on Oct. 9 and to the Molokai Planning Commission on Oct. 10.

"It is important that people realize that this draft will not fulfill every dream," Hunt said. He says his department is "open to finding some common ground," but "people must be willing to budge."

Owners also will need to provide breakfast in a B&B. Up to now, that has been optional.

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