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Needs Assessment NA-05 Overview Needs Assessment Overview The Hawai'i Housing Planning Study {HHPS}was developed to provide forecasts. The HHPS was expanded each time the housing market study was updated. It exists today as a supply and demand model of Hawai`i's housing market. It treats each County as an independent housing market that can be summed to describe housing activity for the entire State. HOUSING DEMAND The HHPS summarizes estimated demand for housing units, for the next five years, and uses these projections to identify the number and types of units needed for Hawaii. For past years, demand is based heavily on the unit sales reported by county boards of realtors and subsequently reported by DBEDT. In 2019, the HHPS has developed a Housing Demand Survey to support demand estimates and describe new buyers and renters, their financial situations, and the unit preference. Important parameters set for the statewide forecasts shown here are as follows: a population growth rate of.5 percent per annum (from 2010 through 2018), household size grew by 6.4 points per decade, household income growth rate of about 1.8 percent per annum, and interest rates beginning at 3.125 percent in 2019 and rising to 5.1 percent by 2021. MODELED DEMAND Historically, when determining housing demand, the population change tends to be the central figure. In the 1990's,the annual population growth rate, 1.9%, was lower than in previous decades. Between 2000 and 2010, the population growth dipped even lower, to 1.2% per year. And finally, between 2010 and 2018, the rate fell even more to 0.5%annually. As noted earlier,the Hawaii housing market has been cyclical over the last 40 years. Very generally, we have had three major expansions followed by periods of post-expansion adjustment. The cyclical nature of sales is definitely a feature of our housing market and there is no indication that the underlying factors responsible for those cycles will change significantly in the future. The model, therefore, forecasts continuation of that pattern. It produces another housing run-up beginning later in this decade. We note that the quality and quantity of housing related data has improved. The model and its forecasts benefit from the improvement and reflect improvement in detail through the years. The forecast suggests continued growth in Hawai'i's housing market. Increase in sales and new homes construction is expected. Consolidated Plan HAWAII COUNTY 20 OMB Control No.2505-0117(exp.06/30/2018)