2011 Housing Planning Study - State of Hawaii

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Types of Units Needed relatively high — as many as 3,500 to 6,000 units per year in recent decades. Table 11 shows the distribution of needed units by county, tenure and unit type for the next five Needed units are concentrated in market levels years. They have been estimated for each of below 180 percent of AMI. This finding suggests seven market levels following U.S. Department that the market is more effective in producing of Housing and Urban Development (HUD) high-end units than low-end units. Inefficiencies income guidelines. Table 12 shows a similar are exacerbated in periods of rapid market distribution of needed units, in this case expansion when fewer low-end units are built. distributed according to the 2011 median More middle-market and low-end units are built household income of each county and the State during periods of market adjustment. of Hawaii as measured in the HHPS Demand Survey. Needed units are also concentrated in the rental market rather than the ownership market. Again, The Hawaii Housing Model 2011 was used to the current housing market produces units for develop the total number of needed units by sale more efficiently than units for rent. county and for the State as a whole. The distribution of needed units by tenure, type, and The detail produced in this analysis will be useful market level was developed from Housing in a variety of housing planning efforts in the next Demand Survey data. five years. It is relevant, reliable, and utilitarian. The analysis employs the assumption that One conclusion of the 2011 modeling exercise needed units are distributed according to the supports major conclusions of every housing effective and qualified demand estimates from study and blue-ribbon housing task force the survey. conducted in Hawaii for the last twenty years — what we need is more affordable rental housing. Effective demand means that only Hawaii residents who are planning to move to a unit in Finally, we need to explain how each of four the State of Hawaii in the next five years were housing types -- market level units, affordable included in the analysis. The analysis did units, special needs housing, and units for those include people who are currently doubled-up for impacted by homelessness — are treated in the economic reasons. Hawaii Housing Model. The estimates are based on qualified demand in Market Level Units: Units needed for the sense that their housing choices have been households with incomes above 80 percent21 of adjusted to reflect their current economic AMI are referred to in the housing model as situations. If a survey respondent expressed a "market level" housing units. It is assumed that desire to move from a rented unit to an owned most of those will be produced by the private unit, but did not have the financial resources to sector. The model does not assume that market support that move, we added that case to the list level housing units will be produced on schedule of rental units needed rather than the ownership as they are needed. Hawaii's housing market is unit needed. marked by high prices and restricted supply. By The process of estimating needed units is crucial 2' This is strictly a characteristic of the Model and not an to housing planning because it identifies housing assertion that 80 percent, or any other level, is the"true" units other than those that will be produced by definition of market level housing. Many other levels are the local market under normal conditions. Not used even within Hawai i. Maui County classifies surprisingly, in a very high-priced housing market anything under 160 percent of AMI as public sector projects. Affordable housing developers tell us 60 like Hawai`i's the number of needed units is percent is an appropriate level because the private sector uses Low I ncome Housing Tax Credits below that level. Hawaii Housing Planning Study,2011 Page 27 0 SMS, Inc. November,2011