The Hawaii County Windward Planning Commission voted unanimously Friday to defer a bill seeking to overhaul vacation rental rules that has seen significant pushback from local farmers operating “farmstays.”

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The Hawaii County Windward Planning Commission voted unanimously Friday to defer a bill seeking to overhaul vacation rental rules that has seen significant pushback from local farmers operating “farmstays.”

Bill 147 would redefine hosted and unhosted short-term rentals, establish working standards and punitive fines, and expand the list of zoning areas where hosted rentals are allowed to operate. It would lengthen the rental period considered “short-term” to stays less than 180 consecutive days — as opposed to 30 days under current rules — and set occupancy limits, reduce “quiet hours,” and restrict the types of activities allowed on rental properties.

Commission Chair Louis Daniele justified the deferral by saying the body “just needs some more time to digest this” and to make “additional recommendations and amendments.” The commission will consider the bill again during its July 2 meeting.

The measure was forwarded to the planning director and planning commissions by a unanimous vote in-favor by the County Council’s Policy Committee on Planning, Land Use and Economic Development on April 7.

It also calls for the creation of an enforcement fund, leveraging fines ranging from $5,500 for first violations to $10,000 for third violations and beyond. If county enforcers find an unregistered property listed as bookable anywhere online — including on popular sites like Airbnb and VRBO — they could consider that sufficient evidence of illegal operation, with owners then having to prove they’re in compliance.

Under the proposed legislation, all short-term rentals would be divided into two groups: bed and breakfasts and STVRs.

The new rules define B&Bs as hosted rentals where someones lives on the same property as the rental unit during guest stays. Conversely, STVRs are defined as unhosted rentals with no on-site presence by a “host” — specified in the bill as someone “reachable,” whether it be an owner, family member, property manager or tenant.

Registration fees would be set at $250 for new B&Bs with a $100 annual renewal, and $500 for new STVRs with a $250 annual renewal.

Whichever group a particular property falls into determines where it’s allowed to operate and what rules it must follow. STVRs would be mostly limited to resort areas, but with two notable exceptions: properties zoned Multi-Family Residential and Neighborhood Commercial.

B&Bs would be permitted in a large section of zoning categories, including residential, commercial and some agricultural areas without the need for a special use permit, but with one notable exception: lots zoned State Land Use Agricultural.

This carve-out stems from the 2024 Hawaii Supreme Court’s Rosehill v. State of Hawaii case, where the court decided STVRs should be prohibited on state-designated farmland because they “undermine the purpose of the agricultural district.”

Resultingly, Hawaii County must now ensure that its vacation rental rules conform to state law, prompting the need for legislation like Bill 147.

Although the case has left the county’s hands tied, this hasn’t stopped farmers operating vacation rentals on their land from lashing out. Some attended Friday’s meeting to testify in opposition of the bill, like South Kona farmer Krista Olson.

“I see an intention here to protect and preserve farmland,” Olson said. “(But) sometimes when we protect and preserve farmland, we inadvertently hinder farming, and in our world of small family farms on Hawaii Island, really protecting farming and farm families means giving folks a path to making a living.”

This path, she said, involves allowing growers to supplement their income by renting outbuildings for visitor stays. Under Bill 147’s provisions, hosted rentals would only be allowed in the State Land Use Agricultural district by special permit if the rental is “located in a farm dwelling” that is also “the principal home of the host.” The bill outright bans the renting of “additional farm dwellings.”

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Without this supplemental income, Olson said, the farms themselves could fail.

“Some of us will honestly come to a pretty abrupt stop in production,” she said. “I heavily subsidize our row crop operation. We grow organic leafy greens and produce for Head Start programs, for community feeding programs, and we can’t do it without the income from our farmstay rental.”

The costs incurred from following these new rules, she said, would be unaffordable for her legacy farming family.

“I personally am not in a position to be able to do all the things that would be required to get a special use permit,” she said. “So, for us it will really mean the end of farming production. It will also mean probably the end of five generations of farming, and I have a kid who really would like to go on and farm for his community, and I don’t see a financial path forward without the current balanced model that we have.”

There are large areas of Hawaii Island that are county-zoned Agricultural, yet sit in State Land Use Urban and Rural districts, where hosted B&Bs utilizing outbuildings could still operate with a permit. Opponents of the bill like South Kona farmer Heather Korotie have claimed that this creates an uneven enforcement of rules.

“It forces hosted rentals in the state ag and rural districts into a costly, uncertain, and long special permit process … while all other residents get a much simpler and less costly registration path to also become a B&B,” Korotie said. “This creates two classes of hosted rentals — both called B&Bs — purely based on the state land use district labels which no longer seem to be accurate.”

Hosting visitors on her farm, she said, is a “necessity and not something we even want to do.”

“It allows us to pay our mortgages, keep farming even when the farm runs at a loss, and remain self-reliant instead of needing public assistance,” Korotie said. “Requiring us to host only inside our own dwelling versus on our home site like all others in the bill — and then layering an expensive special permit process on top — seems unintentionally inequitable.”

Bill 147 was primarily authored by Hamakua Councilwoman Heather Kimball, who attended the hearing and sympathized with farmers like Olson and Korotie, but said the county has no choice but to follow state law. On the other hand, she said, the measure would remove permitting requirements for residents operating B&Bs outside of State Land Use Agricultural zoning.

“There will be no additional steps for those folks,” she said. “They’ll just register, and that’s it. It’s only this ag part that we’re having to align with the court cases and the state law and require that special use permit because of the Rosehill decision and existing state law.”

Also at the meeting was Planning Director Jeff Darrow, whom Commissioner JoNelle Fukushima questioned about the bill’s proposed fine schedule.

“I want to know more about your fines,” Fukushima said. “They seem incredibly high.

“It’s a difference, if you’re a resort or an ag person — $5,000, $10,000 penalties — you know, that’s pretty egregious in my thought process,” she added.

Darrow responded that in the past fines have been insufficient to discourage illegal rentals.

“The problem that we’ve had is the fines did not deter activity,” he said, “because they made much more money than they (lost in) fines, so they could continue operating. The fines had little effect on them.”

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Email Stefan Verbano at [email protected].