Looking back on 2018, the largest issue of the year was the series of floods that damaged the North Shore, a small neighborhood in Koloa on the south side, and Anahola. Eight months later, those communities are still recovering from that incident.
In fact, on January 3, the new mayor issued the sixth iteration of an emergency proclamation, which extends the flood-relief process. Part of that emergency rule prohibits the operation of transient vacation rentals on the north side of the island in the Lumahai, Wainiha, and Haena areas in particular.
For the folks on the northern side of the island that depend on their vacation rental revenue, it’s a very challenging time. On the flip side, the new county government seems to be strongly focused on not only housing, but also on clamping down on the enforcement of illegal vacation rentals. Recently, they issued a $130,000 fine to an operator by the Wailua River who’d been operating an illegal vacation rental.
That in mind, if you’re thinking about buying property on Kauai with the intent of renting it as a short-term vacation property, I strongly encourage you to make sure it’s a legal vacation rental. One in eight homes on Kauai is a vacation rental, and the government sees that as something that contributes to the high price of housing and destroys our communities.
I don’t necessarily agree with that. However, the county strategy is to become much stricter on enforcement. In terms of affordable housing, one of the ideas the mayor mentioned in his radio interview was of leasing county or state land to large developers so that they can defer those costs and bring in housing that’s much more affordable for the median income of Kauai households.
As we move further into 2019, we still have three relatively new projects
- Down the South Shore, the folks from Brookfield continue to build out PiliMai, which are some of the nicest, most modern condos that run along the Kiahuna Golf Course. The 2-bedroom units there are running in the $700s, and the 3-bedroom units run in the $800s.
- On the east side, DR Horton continues to build out their project in Honolulu, which provides some of the most affordable housing on the island in terms of new construction. These large 3- and 4-bedroom homes are in the $500,000 range, though they’re on small lots.
- On the North Shore, we have the North Shore Preserve, which is a swath of land owned by Jeff Stone and the Principal Corporation. These are spectacular lots with one-of-a-kind, mind-boggling views of Hanalei Bay and Valley High. They will be selling for between $5 million and $6 million.
Overall, this last year was very successful for tourism. For those with vacation rentals, tourism revenue was up 9.2%, the highest level in 25 years on Kauai. However, this does create the problem of over-tourism; there are more tourists here than our infrastructure can support.
The focus for the future will be on improving our roads and wastewater systems so as to be able to support more visitors, or else to find a way to minimize the number of visitors coming to the island.
An example of that point is the airlift onto the island. In fact, Southwest Airlines launched its first certification airlines earlier in February; as soon as they’re finished with that process, you’ll be able to get affordable flights from Southwest. For those of you with Southwest frequent flyer miles, it might be a great opportunity to get an inexpensive or free trip to the islands. The county doesn’t really have control over that, which is part of the drive behind the county’s push to improve infrastructure, roads, and so on.
These are some of the key issues relevant to us on the Garden Island. Hopefully you get to visit us soon! If you have any questions about local issues or about buying or selling real estate, please reach out to us. Our marvelous team would love to be of service to you. Aloha!
