2011 Housing Planning Study - Inventory Report

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condominiums, and 11 percent was apartments. Military, student, and cooperative housing made up the rest of the State's housing units. Housing Stock Growth Rates The 500,508 housing units counted in the 2011 HHPS Inventory Study was up from 475,863 in 2006. That represents an average annual growth rate of 1.3 percent per year, slightly lower than the 1.63 percent per year measured between 2003 and 2006. That means that housing unit production was lower after the peak of the last price run-up than it was during the most heated part of the cycle. As we shall see, that is consistent with Hawaii's traditional pattern of housing stock change. Supply generally lags demand by several years. The inventory rose by 24,645 housing units in the four years since the last Housing Policy Study. The new stock included 18,618 single-family units and 6,495 multi-family units. The average annual growth rate for single-family units was more than 1.7 percent per year and about 0.9 percent per year for multi-family units. This general pattern is also consistent with housing development patterns in which supply is led by high-end demand, especially in periods of high growth. Among the 6,495 multi-family units built between 2006 and 2010, only about 225 were classified as apartments. We have no check on this figure in Census or other public data. We do know that there were at least 7,021 affordable housing units produced under the aegis of government housing agencies in Hawaii between January 1, 2007 and December 31, 20109. Among the 5,653 units for which we have complete descriptive information10, about 3,899 were classified as multi-family, and 3,148 were classified as rental units. The trend has been for the production of affordable units to increase throughout the last decade. On the other hand, the total number of multi-family units added between HHPS inventories has been decreasing since 1997. For this and other reasons, HHPS studies are coming to rely on inventory data for value added information on the housing stock, but to rely less on it as a measure of change in housing stock. Another issue related to the inventory approach to housing stock monitoring is the inability to measure housing supply (production) in the short-run. Housing sales reported by the Honolulu and Maui Boards of Realtors, for instance, suggest that housing sales dropped precipitously after 2007, suggesting a dramatic decrease in demand. Reporters covering the housing market and our conversations with developers suggest that new unit production has fallen off to very low levels in the last two years. With more detailed measurement, we might expect to find that the 24,645 new units reached the market relatively early in the last four-year period. Other Stock Characteristics As in the rest of the nation, Hawaii's homeownership rate has been rising for more than two decades. The percent of owner occupied units in the inventory was 50 percent in 201111, up 9 The estimate is based on a list of affordable units developed with assistance from the State, the four county housing agencies, and the Department of Hawaiian Home Lands. The list may not be perfectly accurate at this point and may underestimate actual production of affordable units. 10 The list includes affordable units sponsored or assisted by government agencies (5,653) and units produced by private developers under unilateral agreements with government agencies (1,368). It includes information on unit type and tenure for only 93 of the 1,368 affordable units produced under unilateral agreements. 11 Appendix Table IA-12. Hawari Housing Planning Study,2011 -Inventory Report Page 7 0 SMS, Inc. November,2011