Princeville is home to a shopping center, fancy new residential subdivisions and a posh resort recently rebranded as a St. Regis.

Down the hill, Hanalei hasn’t seen as much growth. Taro is still a major crop and one-lane bridges control the flow of traffic.

So why did Princeville’s income plummet — the largest decrease of the state’s 131 towns between the 2000 Census and the 2009 American Community Survey, according to a Civil Beat analysis — while Hanalei’s has more than doubled?

One explanation: The simple economic principle of supply and demand.

Hawaii as a whole has outpaced the rest of the country in income growth in the past 10 years, and Kauai performed strongest of the state’s four counties.

Hanalei led the charge, seeing its median household income skyrocket from $34,375 in 1999 to $72,917 in 2009, a 60 percent increase even after adjusting for inflation.1 Poipu, Wailua Homesteads, Puhi and Koloa, communities on the island’s East and South sides, all ranked in the top 15 statewide.

But the improvements were not universal on Kauai. Princeville’s average income dropped from $63,833 in 1999 to $52,700 in 2009, according to data, a 17.4 percent decrease even before accounting for inflation. Once that’s factored in, the town’s “real income” or “purchasing power” was down 37.8 percent.2

Hawaii Towns — Largest Income Gains and Losses

(out of 131)
Geography 2009 Income 1999 Income Percent change
(adjusted for inflation)
2 Hanalei $72,917 $34,375 +59.7%
131 Princeville $52,700 $63,833 -37.8%

Source: Civil Beat analysis of 2009 American Community Survey and 2000 Census dataFull Table

At the same time, the percent of people in poverty has dropped to nearly zero in Hanalei while it’s more than doubled in Princeville.

Hawaii Towns — Largest Poverty Rate Losses and Gains

(out of 131)
Geography 2009 Pct Below
Poverty Level
1999 Pct Below
Poverty Level
Percent Change
1 Hanalei 0.5% 25.3% -97.9%
123 Princeville 18.4% 8.1% +127.4%

Source: Civil Beat analysis of 2009 American Community Survey and 2000 Census dataFull Table

The stark contrast between the changes in Hanalei and Princeville is particularly interesting because of their geographic proximity. Presumably, the same broad macroeconomic realities would affect both areas.

The boundary separating the two adjacent Census Designated Places is the Hanalei River, and the one-lane bridge that spans that waterway has done much to dictate life in both communities.

Source: U.S. Census Bureau

“Since the inception of Princeville back in the very early (19)70s, the intent was to preserve Hanalei town,” said Kauai County Council Chair Jay Furfaro, who calls Princeville home and has family ties in the area dating back 150 years. “Supply and demand gets tight down in Hanalei, but Hanalei gets preserved as a village.”

The entire North Shore has yet to install a traffic light and a 25-foot height limitation controls development. Some residents complain that vacation rentals have proliferated and that the character of the area has changed, but Hanalei, where taro fields and livestock still dominate the landscape, has remained largely rural.

Preservation efforts have kept roads narrow and historic bridges in place. Demand for prime real estate — particularly close to the world-famous sands of Hanalei Bay — has gone up. Supply has remained static, driving prices skyward and forcing out many working and middle-class families.

At the same time, Princeville added some 700 residential units in the last 10 years, Furfaro said, transforming a town that still has a reputation as a retirement community into something attainable for working Kauaians. The grocery store, gas station, library and other shops once designed to give Hanalei residents easier access to amenities have had the side benefit of making Princeville a family-friendly community of its own.

Rather than being contradictory, it turns out, the tales of Princeville and Hanalei weave together to form a picture of the future of Kauai.

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