2015-2019 Revised Con Plan for CDBG-CV

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The number of new units that would have to be built during that five-year period to meet new demand generated by changing demographic and economic conditions might be as high as 50,000. Some of those units will be produced by Hawai'i's housing industry(public and private). Some will not. Units that are not built represent the shortage of units needed to fill total demand for housing units. The shortage results from market inefficiencies(lack of information or coordination, lag times, etc.), regulations that dampen supply, and economic realities(difficulties of producing units below market prices,etc.). This shortage has come to be known as"needed units" and is defined as the difference between total demand and expected supply. Identified in the Housing Demand Survey,the median household income for the State was$58,700. The median was slightly higher for the City and County of Honolulu ($59,076) and approximately equal for the County of Maui ($58,424). Both Kauai and Hawaii Counties had median household incomes well below the statewide median ($49,730 and$49,696, respectively). Types of Units Needed The Hawai'i Housing Model 2011 was used to develop the total number of needed units by county and for the State as a whole. The distribution of needed units by tenure,type, and market level was developed from Housing Demand Survey data. The analysis employs the assumption that needed units are distributed according to the effective and qualified demand estimates from the survey. Effective demand means that only Hawaii residents who are planning to move to a unit in the State of Hawai'i in the next five years were included in the analysis. The analysis did include people who are currently doubled-up for economic reasons. The estimates are based on qualified demand in the sense that their housing choices have been adjusted to reflect their current economic situations. If a survey respondent expressed a desire to move from a rented unit to an owned unit but did not have the financial resources to support that move, we added that case to the list of rental units needed rather than the ownership unit needed. The process of estimating needed units is crucial to housing planning because it identifies housing units other than those that will be produced by the local market under normal conditions. Not surprisingly, in a very high-priced housing market like Hawai'i's the number of needed units is relatively high—as many as 3,500 to 6,000 units per year in recent decades. Needed units are concentrated in market levels below 180 percent of AMI. This finding suggests that the market is more effective in producing high-end units than low-end units. Inefficiencies are exacerbated in periods of rapid market expansion when fewer low-end units are built. More middle- market and low-end units are built during periods of market adjustment. Consolidated Plan HAWAII COUNTY 21 OMB control No:2506.0117(exp.06/30/2018)