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A new national study says Honolulu residents must earn at least $39.06 an hour to afford a two-bedroom apartment at fair market rent without spending more than 30 percent of their income on rent.
The National Low Income Housing Coalition, an advocacy group, published a new report Wednesday highlighting the disparities between incomes and rents nationwide. The study looks at how much money full-time workers need to earn to afford housing without spending more than 30 percent of their income — known as a housing wage.
The report found Honolulu is the fourth-priciest city for renters, behind metropolitan areas in California’s Bay Area. A wage of $39.06 translates to more than $81,244 per year.
Statewide, Hawaii residents need to earn $36.13 per hour, or $75,150 annually to rent a two-bedroom residence — more than any other state. The national housing wage is $22.10 for a two-bedroom and $17.90 for a one-bedroom rental.
The Aloha State also had the biggest shortfall between that target wage and the wage paid to the average renter. The state’s gap is $19.98, compared to the next-largest shortfall of $11.53 in Maryland.
Minimum-wage workers in Hawaii would need to work 109 hours a week to afford a one-bedroom apartment and 143 hours per week to afford a two-bedroom rental, the report found. In Honolulu, residents earning minimum wage need to work 3.9 full-time jobs to afford a two-bedroom at fair market rent.
Hawaii’s minimum wage is $10.10 per hour. Advocates sought to raise it this year to $15 per hour but the effort failed after many businesses said it would drive up their costs.
The report says, “The struggle to afford modest rental homes is not limited to minimum-wage workers.” The hourly wage necessary to afford a two-bedroom unit in Hawaii County is $25.42. In Kauai County, it’s $29.06 and in Maui County, it’s $31.13.
The fact that housing in Hawaii is so much more expensive than in other states is no surprise to Randall Roth, professor emeritus at the University of Hawaii Richardson School of Law. He edited a book of essays called “The Price of Paradise” published in 1992 documenting the Hawaiian islands’ increasing lack of affordability.
The state’s housing shortage is due to many factors, including limited land, high construction costs and land use regulations. Some developers say market-rent apartments don’t pencil out.
“In the meantime, you’ve got extraordinary demand because Hawaii is Hawaii,” Roth says. “You’ve got a lot of people who would like to live here and a real estate market that is relatively inflexible in terms of meeting that demand.”
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