Well, after 4 years of bantering back and forth, the Kauai county Council has finally passed their ordinance to put a stop to vacation rentals in single-family residences outside of the visitor destination area. Search as i might, I was unable to google a map to post here on AR, but, suffice it to say that it is primarily Princeville, most of Poi`pu, parts of Lihue and parts of Kapa`a. So for instance, the areas north of Princeville, that would be Wainiha, Hanalei and Haena are all NOT IN THE VDA.
You can read the article about some of the final ammendments that were defeated this past week in THE GARDEN ISLAND. In the short terms, I do not expect the ordinance to have much of an effect on Kauai home prices. Long term though, the passing of this bill will dampen the market for those buyers who only can qualify by adding in the vacation rental income of the property when they are not on island. If this rental income is now deemed illegal for certain areas, then the rental income cannot be considered by a lender if a buyer is getting a mortgage.
It remains to be seen, just how the County of Kauai intends to enforce the ruling and the types of fines that will be levied on violators of this newly passed ordinance, The ordinance becomes official on March 1st once Mayor Baptiste signs it. The attorney for the Kauai Board of Realtors has determined that this ordinance is violating the rights of property owners and is illegal. It certainly will be interesting to see how this drama plays out.
As with any controversy, there are many perspectives to consider. There are so many who make their living on Kauai from the vacation rental industry. Those folks will be hurt by these decisions. And the proponents of the bill have argued that our communities are being destroyed by all the vacation renters. I am not sure at today's market prices that putting this ordinance in place will have people moving back into these oceanside communities. The simple fact of raised taxes as the land values appreciated is why so many local people chose to rent, so they could keep the land that has been in their families for generations.
I am sure these issues have gone round and round on each of the islands. We'll have to see how this issue continues to play out on the Garden Island of Kauai. on Kauai
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