2015-2019 Revised Con Plan for CDBG-CV

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The forecast suggests continued slow growth in Hawai' "s housing market in the short term. It predicts slow sales between 2011 and 2017. We do not expect any further decreases in sales. Obviously, changes in model assumptions would alter results. Increasing employment,for instance, would push up household incomes,shortening the current adjustment period and increasing the volume of the next run-up. Increasing interestrates would have the opposite effect. HOUSING SUPPLY The Hawaii Housing Model measures supply in terms of housing units added each year with separate estimates for single-family and mufti-family units. For past years,added units are the difference between housing unit counts for two adjacent years. Forecasts of added units are based on past performance of the housing market, population growth household formation, household income,and expected interest rates. The assumptions applied for the supply forecast are the same as those noted The market cycles are apparent in the supply forecast just as they are in the demand estimates. The forecast just as they are in the demand estimates. The forecast follows a similar pattern of rapid growth and longer adjustment periods during which housing prices fall slightly and production is reduced significantly. The forecast suggests continued slow growth in Hawai'i's housing market. Specifically, it predicts slow sales between 2011 and 2017. Further decreases in sales are not expected. With the standard caveat that reliability of forecast estimates decreases in later years. Again, changing assumptions would alter the forecast. Increasing population growth, decreasing unemployment and low interest rates all work toward increasing demand and therefore the need for more housing units. Slower growth in any of those assumptions would decrease the need for new units. NEEDED UNITS The ultimate objective of the modeling exercise was to estimate the number of new housing units needed in Hawaii in the near future. As in the past,we accomplished this in two steps: (1) estimate the total number of units required in the Hawaii Housing Model; (2) estimate the types of units needed (by market level and units per structure) based on the Housing Demand Survey. In 2011, we added a further step intended to estimate the numbers of elderly and family housing units needed in each county. Total New Units Needed Based on the model,the total number of housing units that will change hands in the period between 2012 and 2016 is approximately 60,000 to 75,000 units. This is the number of units that would be required to meet the needs of everyone who wanted to move. Most of those would be resales and not require any construction. Consolidated Plan HAWAII COUNTY 20 OMB Control No.2506.0117(exp.06/30/2018)