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a. Housing Stock Growth, 1990-2014 demand and higher house prices by supplying J
<br /> new units. The lag shown after 2000 reflects the
<br /> If population rises and household formation time needed to bring units to market. That finding
<br /> proceeds normally, additional housing units will is inconsistent with the often-heard claims that
<br /> be needed to house Hawaii's residents. supply lags demand by substantial margins - up
<br /> Housing planners typically measure housing to ten years - in Hawaii. However, those claims
<br /> production first by tracking residential building usually refer to the time required to start larger
<br /> permits and then measuring total units added to projects that may require land use or zoning
<br /> the stock. Table 5 shows the number of building changes and would not be included in the
<br /> permits approved by county planning building permit data.11
<br /> departments over the last 24 years.
<br /> The present data may underestimate the lag,
<br /> Table 5. Total Building Permits Issued, Counties however. Housing stock estimates (as well as
<br /> and State of Hawaii, 1990-2014 numbers of added units) are in part an artifact of
<br /> County State methods used to produce the Census estimates.
<br /> Hawaii Honolulu Kauai Maui It appears that the U.S. Census Bureau, in
<br /> 1990 4,720 17,123 2,312 3,534 27,689 developing annual housing unit estimates, uses
<br /> 1995 2,707 11,956 1,054 1,514 17,231 data taken from authorized building permits.
<br /> 2000 3,254 12,443 1,083 2,294 19,074 Therefore, the housing stock estimates we are
<br /> 2005 5,436 15,174 882 2,348 23,840 using are defined, in part, by the permit counts. 1
<br /> 2010 2,756 14,254 171 1,016 18,197
<br /> 2014 4,811 18,541 187 1,267 24,806 Between 1995 and 2004, housing production in
<br /> Source. State of Hewah Time Senes Data Book 2005-2014 Table Hawaii was at an all-time high and nearly 67,000 j
<br /> 21 01. housing units were built throughout the State.
<br /> The number of building permits approved in a Between 2005 and 2009, housing production
<br /> given year is an indicator of the demand for new dropped sharply, primarily due to the Great
<br /> housing units. While the annual count may be Recession. While the State's economy has
<br /> ,o improved markedly since then, housing
<br /> affected by a host of other considerations1° it is
<br /> unlikely that building applications will be made or production remains low. In the past four years,
<br /> approved without some expectation that there fewer than 20,000 housing units have been
<br /> will be buyers for the units. constructed in Hawaii, despite the addition of
<br /> about 50,000 new residents in about 15,000
<br /> The historical figures in Table 5 support that households.
<br /> proposition. They rise and fall with the market.
<br /> Large permit counts in 1990 and 2005 reflect Figure 4 combines the sources of information on
<br /> boom markets. Low counts in 1995 and 2010 housing stock growth In 2014, there were 3,066j
<br /> are consistent with the low demand in those residential building permits issued for new
<br /> years. The 24,806 permits issued in 2014 housing units. In that same year, 2,688 housing
<br /> suggest that demand has risen again. units were added to Hawaii's housing stock,
<br /> which means that 88 percent of the units
<br /> Authorized permits rise and fall with the local permitted were actually built. This is a vast
<br /> housing market. Added units lag permits by improvement over 2008 when 4,115 permits
<br /> about a year. In times of high market activity, were issued but only 1,323 housing units
<br /> landowners and developers respond to higher constructed (32%).
<br /> 10 These include availability of construction financing, I
<br /> expectations for home mortgage financing, current 11 The data may underestimate the lag because housing
<br /> zoning situations, land use issues, infrastructure stock estimates and added units are an artifact of
<br /> 1
<br /> condition and financing, affordable housing methods used to produce Census estimates. Census
<br /> requirements and other regulatory issues, project uses authorized building permits to estimate housing
<br /> readiness, and other considerations that affect the units, so housing stock estimates are adjusted to the
<br /> scheduling of permit applications. permit counts
<br /> Hawaii Housing Planning Study,2016 Page 10
<br /> ©SMS,Inc December,2016
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