The cost of renting a home in Hawaii has jumped at least 10 percent over the past two years, according to a new study. And given the lack of construction of affordable units, the state’s housing crisis is projected to get worse.
Hawaii real estate analyst Ricky Cassiday presented the results of his study on Hawaii’s rental market Tuesday to state lawmakers during an informational briefing at the Capitol.
Cassiday’s presentation — which you can read in full here — emphasized the need for the state to leverage its land to provide affordable housing for local residents. But while highlighting private-public partnerships as a potential solution, the study painted a depressing picture of the state’s housing crisis and cautioned it won’t ease any time soon.
The need for affordable units far outstrips the supply, according to this slide from Cassiday’s presentation.
Here are the highlights:
Low supply of rental housing is forcing prices up. Rents for multi-family homes have increased 13 percent since 2012, but the number of such rentals advertised fell by 29 percent. Rents for single-family homes grew more than 10 percent but the number of listings dropped by more than half in two years.
One out of every three Hawaii households makes less than area median income as defined by the U.S. Department of Housing and Urban Development, Cassiday found. In Honolulu, that was about $76,000 for a family of four in 2014.
“Affordable rental housing is for housing local families,” Cassiday said emphatically.
And 46 percent of Hawaii households make 80 percent of area median income or less. Those households tend to rent and often aren’t able to afford to buy a home. Workforce housing policies, such as those in the state’s redevelopment district of Kakaako, don’t help them.
Statewide housing permits have fallen while the value of such homes have risen.
Cassiday said that 90,000 of the state’s 474,000 households make 60 percent of area median income or below, but there are only 6,000 public housing units to serve them.
By 2020, there will be an additional 6,000 households that earn 60 percent of AMI or below, he estimated.
Part of the problem is there’s a huge gap between wages and housing prices, forcing many families, especially in Waipahu and Kalihi, to crowd into homes.
The need for more rentals in Hawaii keeps rising.
The military takes up 10-15 percent of the housing stock, and second homes take up 10-40 percent of the housing stock. But even if those units were emptied, they may not be affordable to low-income renters, Cassiday cautioned.
He also warned that requirements for developers to build a certain number of affordable homes, known as inclusionary zoning rules, can backlash, as they did on Maui County.
The state needs 17,000 rental housing units by 2020. But not enough are being built at affordable prices and the supply crunch is driving up prices. The bottom line is, Hawaii’s housing crisis is getting worse.
Cassiday summed up the state’s economic predicament in one slide that emphasizes how demand and supply are out of sync:
Job growth increases the demand for housing, meaning that in times of economic growth there’s little available.