Court: No STVRs on ag land

Short-term vacation rentals do not belong on farm lots, the Hawaii Supreme Court ruled Tuesday.

The state’s highest court issued a unanimous verdict Tuesday in a 4-year-old case stemming from a Hawaii County ordinance limiting the establishment of STVRs on agriculturally zoned land.

The case initiated from a group of 20 West Hawaii landowners, referred to as the Rosehill Petitioners after their lead complainant Linda Rosehill. The petitioners challenged the county ordinance, Bill 108, which prohibits landowners from renting out farm dwellings for periods of under 30 days.

The bill, which was adopted in 2019, required any STVR operating outside of permitted zoning districts to obtain a nonconforming use permit from the county within 180 days, and prohibited any house on ag land from qualifying as an STVR unless the house had been built before 1976.

The petitioners argued that the language of Bill 108 did not actually specify how long farm dwellings can be rented for, and therefore allows them to be rented for 30 days or fewer. The group in 2020 submitted a petition — called the Rosehill Petition — to the state Land Use Commission.

The LUC denied the petition in 2021, but the petitioners appealed the matter to the Third Circuit Court, which reversed the LUC decision. The LUC in 2022 then filed its own appeal to the state Intermediate Court of Appeals, and the case was eventually transferred to the state Supreme Court in 2023.

After the Supreme Court heard oral arguments in the case in May, it unanimously decided this month that Hawaii law does not permit farm dwellings to be used as STVRs.

In its decision, the court held that the petitioners’ interpretation of Bill 108 would subvert the purpose of a state statute governing permissible uses within agricultural districts.

That state statute, HRS 205-4.5, specifically defines “farm dwellings” as a “single-family dwelling located on and used in connection with a farm,” or “where agricultural activity provides income to the family occupying the dwelling.”

These definitions, the court ruled, do not “resemble anything close to the type of transient accommodation that a short-term vacation rental is.” And because the express purpose of HRS 205-4.5 was to restrict the use of ag land to ag purposes, permitting STVRs on those lands would undermine that purpose.

“There is no indication either in the statute’s text or its legislative history that the legislature intended to allow for farm dwellings to be used as short-term vacation rentals untethered from agricultural purposes,” read the verdict. “Rather, transient accommodations are antithetical to the Legislature’s intent.”

With that conclusion, the Supreme Court upheld the LUC’s decision to deny the Rosehill Petition in 2021, seemingly closing the book on the case after four years.

While it went unmentioned in the verdict, some of the petitioners’ “farm dwellings” that the county denied permits for short-term rentals were less “homely plantation house” and more “luxury resort,” with one such home a sprawling 5,000 square-foot estate being rented out for $15,000 a month in 2020, according to previous Tribune-Herald reporting.

The verdict comes amidst a raft of proposed changes to the county’s STVR regulations, which have been in discussion among County Council committees for months. But County Council Chair Heather Kimball said Tuesday’s verdict shouldn’t affect those measures.

Bill 121 is the most pertinent of the proposed changes. Currently in its fourth draft, Bill 121 makes sweeping changes to how the county manages STVRs — referred to in the bill as “transient accommodation rentals,” or TARs — one of which is the unambiguous phrase “the transient accommodation rental shall not be permitted in an additional farm dwelling.”

Kimball said that somebody could rent part of a primary farm dwelling as a TAR, but Bill 121 requires that the property owner live within the home as well.

“If the verdict had gone another way, then maybe we would have to change it,” Kimball said.

Meanwhile, state officials praised the verdict Wednesday.

“Using agricultural lands for genuine agricultural purposes and ensuring that housing is allocated for our residents are two of the most crucial issues facing our state today,” said Gov. Josh Green in a statement.

“This was a win for preserving agricultural lands in Hawaii, said Special Deputy Attorney General Doug Chin in a statement. “Short-term vacation rentals are transient accommodations effectively for vacation or tourist use and do not belong in the agricultural district.”

An attorney for the petitioners did not reply to requests for comment.

Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.