2011 Housing Planning Study - Rental Report

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EXECUTIVE SUMMARY With 42 percent of households in the State of Hawaii renting their current residence, the Rental Housing Study is a fundamental component of the Hawai'i Housing Planning Study (HHPS) 2011. Understanding the number and types of housing units available for rent, as well as the vacancy rates, demand, and monthly rent rates for those units, is a necessary part of forecasting the housing needs of Hawaii residents. The Rental Housing Study 2011 shows that Hawaii asking rents were on the rise from 2003 through 2006 and fell notably from 2007 to 2010, with the exception of a slight reversal in the last half of 2010 and first half of 2011. Data for the first half of 2011 indicates that asking rents are on the rise for the State and each County except Hawaii County. Contract rents throughout the State rose between 2003 and 2009, with a slight decrease in the rate of growth for 2009. In keeping with the findings for asking rents, data for 2011 suggests that renters have begun paying more for their homes in recent months as contract rents are higher across all Counties. Fair Market Rents in all of Hawaii's counties have remained steady or increased every year since 2000, but levels doff notably after 2009. Overall, the rental data for 2011 suggest that rents across Hawai'i are at the beginning of an upward trend. Households in the City & County of Honolulu, 42 percent of whom are renters, consistently have the highest median contract rent and tend to drive the overall median for the State. Renters in the County of Maui represent 44 percent of households and pay the second highest amount to cover their monthly housing expenses. Residents of Kauai who are renting their current home have experienced more significant increases in their contract rents over the past couple of years than residents of any other county (13 percent from 2008 to 2009). Increases in contract rents among the other counties in Hawaii during that same period were 5 percent or less. The median contract rent in the County of Hawaii's the lowest in the state at $1,112 per month in 2011. Of great interest is the changing nature of the asking rent data itself. Changes in the way rents are advertised and the way they are recorded have introduced new problems for understanding asking rents. There is clearly more work to be done on the rental price issue. Data from the HHPS Demand Survey will be useful in checking the contract rents. The pending release of rent data from Census 2010 will also provide further information. Only in reconciling all of the various sources of data concerning Hawaii's rental housing market will we be able to fully understand the current state of the market and how it's likely to look in the future. Hawaii Housing Planning Study,2011: Rental Housing Page 1 0 SMS, Inc. October,2011