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Home Ownership & Quality Rental Inventories
Hawaii’s housing market is headed for a near “perfect-storm” with a confluence of pressures threatening not only the economy but its social fabric as well. Already ranked next to last among the states in terms of the percentage of home ownership, Hawaii’s rapidly escalating housing costs is making home ownership a diminishing dream for a vast segment of its population. Today a family of four would need annual income of about $70,000 to purchase a $300,000 condo and an annual income of about $140,000 to purchase a $600,000 single family home. Currently, the median income for such a family is $67,500. Year-to-Date through June 2005
The consequences, if the problem is left unabated, are dire. Workers (e.g. teachers, policemen, carpenters, nurses and more others) will be unable to afford decent homes, compelling them to leave the state with unfilled jobs. Those who stay will have higher mortgage or rent payments meaning less discretionary income to spend affecting many businesses, both big and small. Why has this happened? Because of a strong local economy (unemployment less than 3%), rising incomes and low interest rates demand for housing is growing, while the supply side is lagging causing an imbalance, mainly because of a shortage of land that has all entitlements, access to all needed infrastructure and available funding. County and state governments have made significant contributions in the area of affordable housing, but the need still exists for innovation combined with political will for more changes. This is the will of those in positions of power to either support development by streamlining the land use process, providing incentives, and designing waivers and subsides and other forms of financing assistance to reduce home ownership costs for lower-income families. Land-use rules, policies, and standards evolved over decades limit the land available for development, contributing to housing pressures now felt by thousands. In particular, the current land-use designation for agriculture accounts for nearly 2 million of the 4.1 million acres in Hawaii. Rural land accounts for less than 10,400 acres. While checks and balances are essential to ensure prudent stewardship of the land, these regulations require a thorough review to ensure the basic housing needs of Hawaii’s workforce can be met. Additionally, means must be found to improve infrastructure capacity especially in parts of the urban core to allow for in-fill higher density housing development not possible now near job centers. This would not only ameliorate some of land shortages, but would also help save the open space and preserve the natural environment.
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