On Top of the Aloha Beat BLOG


County Council to Review latest amendment on Transient Vacation Rentals Bill 2204

For almost as long as I've been practicing real estate on Kauai, going on my fourth year, there has been an ongoing conversation between the County Council (Kauai's governing body) and the community regarding the monitoring and enforcing of Kauai's Visitor Destination Area. That means, the areas the the county designated over twenty-five years ago for vacation rentals and bed and breakfasts and such.

It seems that as prices for Kauai real estate rose dramatically in 2002 through 2005, some people felt that vacation rentals were primarily responsible for our rising market prices, and therefore something needed to be done about it.

When i work with mainland clients who look to purchase Kauai Real Estate, particularly Kauai condos, buyers are always interested in knowing what type of cash flow they can earn from "vacation renting" their property. However, in the areas of the island that may fall under the scrutiny of Bill 2204, a realtor must disclose that the future rental income of certain areas of Kauai may have a guarded prognosis.

Next week, the County Council will meet once again to review yet another set of changes introduced by Councilwoman Joanne Yukimura, former mayor of the County of Kauai. If you want to become more educated in these affairs, you may wish to check out the website of KAVA. KAVA, the Kauai Alternative of Vacation Accommodation Association, was formed to assist and inform those folks who want to see the vacation rental industry thrive. You can click on the DOWNLOAD option on KAVA's home page and download Bill 2204.

If you wish to read the latest amendments that will be discussed next week, CLICK HERE. 

There is a law suit moving forward in Maui against the county council there asking for extensive damages for around 500 small vacation rental businesses that are threatened with closure; the reported damages could exceed $100 million. Here's the link to the Maui News report.

It's one of those challenging situations. It's clear that many visitors traveling to Kauai prefer staying in vacation rentals over an over-priced hotel. Yet, the hotel industry and their lobbyists are quite strong and certainly would probably prefer that vacation rentals go away. I for one do not think that vacation rentals are what drove our market prices up. Demand drove it up. When we had more demand than supply, prices kept rising. And now, that we have more supply than demand, well, what do you think is happening? Sure, our prices have held better than most mainland upscale markets, but, ultimately with more supply than demand, prices will go down. 

I'd be interested to hear comments from other neighbor islands regarding your perspective and the climate of vacation rentals in your markets. 

Ron Margolis, RA, CDPE, ABR Hawaii Life Real Estate Services 808.346.7095 email: ron@hawaiilife.com

Comment balloon 2 commentsRonnie Margolis • January 23 2008 07:33PM


Our evening news showed some illegal vacation rentals on our North Shore (Oahu) that the neighbors turned in as a nuisance.
Posted by Randy L. Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 13 years ago
I had thought that vacation rentals were illegal in Oahu but that it was done frequently. What is the law over there? Here at least there are visitor destination areas that are certified as valid areas for vacation renters. I tell buyers who are intent on renting their purchases here, that buying in a VDA is a safer way to go.
Posted by Ronnie Margolis, Kauai Realtor - CDPE, ABR, RA - On Top of the Aloh (KW Kauai) almost 13 years ago