PAIA - Three months after Maui County enacted long-awaited legislation to allow permitted short-term vacation rentals in residential areas, Chris and Annie McNeil's five-bedroom Paia Surf rental recently became the island's first permitted property under the new system.
The McNeils recalled being in the midst of renovating the Paia home they've lived in for the past 15 years when Mayor Alan Arakawa signed off on the bill creating a permitting process and regulations for the industry.
"It seemed like great timing. We thought, maybe we could do that here," Annie McNeil said.
When an application for a short-term rental is filed, applicants are required to notify neighbors by mail and post a 2-foot sign.
The Maui News / MATTHEW THAYER photo
She said her positive experience with running a short-term rental in Bodega Bay, Calif., the last six years motivated her to want to start up another rental here. The couple also have handled long-term rentals for about 30 years.
"I love the job of being a property manager. It's been very successful, and I'm so proud of that career," she said.
The McNeils are set to welcome their first rental guests in Paia during the New Year's holiday.
Annie McNeil said she wanted to jump at the opportunity, knowing the law caps the number of permits that will be issued islandwide at 400. One hundred short-term rentals will be allowed in Kihei-Makena; 88 in West Maui; 88 in Paia-Haiku; 48 in Hana; 40 in Makawao-Pukalani-Kula; and 36 in Wailuku-Kahului.
There are approximately 50 applications in the pipeline, according to Gina Flammer, a staff planner in the Department of Planning's Current Planning Division, which oversees short-term rentals and bed-and-breakfast operations. The applications are for properties in Paia-Haiku and West Maui, and a few out in Hana.
Previously, offering a short-term rental typically required obtaining a special-use or conditional permit for the property, an onerous process that often led to rentals being operated illegally.
An estimated 1,100 short-term rentals were in operation on Maui in 2006, the last time a study was done, according to Tom Croly, a board member of the Maui Vacation Rental Association.
"People want to apply; they're excited about it," Flammer said. "I'm getting eight to 10 calls a day."
County Council Member Don Couch, chairman of the Planning Committee that was instrumental in passing the legislation, said he's pleased with the volume of applications so far.
"That was the intent: to make the illegal ones legal," Couch said. "And of an even higher priority was to make sure the character of neighborhoods weren't affected. If there's a troublesome short-term rental in a neighborhood, the neighbors can prevent it from getting permitted."
All neighbors living within 500 feet of a proposed rental unit have to be informed when an application has been filed. Annie McNeil said she personally visited each of her neighbors to inform them in person, in addition to the letter requirement.
In handling the 50 applications so far, Flammer said a protest provision the County Council included to help protect neighbors has been triggered in a few cases. If two adjacent neighbors, or 30 percent of neighbors, depending on the property, protest an application, the application will have to be vetted by the Maui Planning Commission.
Croly said the Maui Vacation Rental Association has been encouraging its membership and the broader community to apply for the new permits.
"We want to ultimately see compliance with this ordinance. Anyone who wants to be in the business should come forward sooner rather than later," he said.
County officials and applicants both admit the application process is not a simple one.
The application is 15 pages long and includes a 29-point checklist. Some of the documentation required includes proof of ownership; a building permit history; copies of transient accommodations tax and general excise tax licenses for the rental; and parking and fire escape plans for the property.
"I've been spinning my wheels these past weeks to get my ducks in a row," Annie McNeil said.
Michele Chouteau McLean, deputy director of the Planning Department, said the upfront requirements represent a shift in the way the county handles permits.
"Typically, applications are turned in, and it seems like it just sits with us for a long period of time as we process everything and have to obtain information or approvals from other departments," she said. "With this permit, with everything required from the beginning, if there are any red flags, the applicants themselves find out firsthand early on and can resolve them on their own time."
Croly said he's heard from a number of people going through the application process.
"Putting together an application is not an overnight process, but it's not impossible," he said.
A challenge for some, Croly said, is the requirement that an applicant disclose whether he or she has previously operated a short-term rental, and if so, obtain clearance from the Tax Department showing that taxes have been paid on any past rental income.
"Anyone coming into the process knows it's going to be a bit of a challenge and slow," Croly said. "But I'm very pleased with the progress made."
Flammer said there are a couple of benefits to submitting an application before the end of the year.
The law requires that any permit application for a short-term rental within 500 feet of another short-term rental property will have to go before the Maui Planning Commission. But, that requirement is being waived for completed applications received by Dec. 31, Flammer said.
After Dec. 31, Couch said the Department of Planning has been tasked with starting to enforce nonpermitted short-term rentals.
The County Council has approved funding for two additional enforcement officer positions at the department.
"We encourage people to apply, or at least contact us," McLean said. "Inquiries will not result in enforcement against them. At this stage, the focus is on compliance."
For more information, visit the Planning Department's home page off of the county's website at www.co.maui.hi.us.
* Nanea Kalani can be reached at email@example.com.