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2016 Hawaii Housing Planning Study
I I ..) ; ' - Beyond Information. Intelligence. Established 1960 IDatabase Marketing ' Economic&Social impact Studies Evaluations Research I Modeling/Forecasting HAWAII HOUSING PLANNING STUDY, 2016 1 SMS 1042 Fort Street Mall Prepared for the County of Hawaii Suite 200 Office of Housing and Community Development Honolulu,HI 96813 Ph:(808)537-3356 I Toll Free(877)535-5767 Fax (808)537-2686 E-mail:info@smshawaii.com Website. www.smshawaii com I I I I I I t SMS Affiliations and Associations: Experian International Survey Research Solutions Pacific,LLC I SMS Consulting,LLC 3i Marketing&Communications Prepared by SMS Research & Marketing Services, Inc. December, 2016 i t MID ® Beyond Information. Intelligence. Established 1960 illi Database Marketing Economic&Social Impact Studies Evaluations Research December 23, 2016 Modeling/Forecasting Ms. Susan K. Akiyama, HousingAdministrator Y SMS County of Hawaii 1042 Fort Street Mall Office of Housing and Community Development Suite 200 Honolulu, HI 96813 50 Wailuku Drive Ph. (808)537-3356 Hilo, Hawaii 96720 Toll Free(877)535-5767 E-mail info@smshawaii.com Website www smshawau corn Dear Ms. Akiyama: It is with pleasure that SMS Research presents this report of the J findings of the Hawai'i Housing Planning Study 2016. We believe the results will be an important tool to be used by those who will plan for and develop new housing opportunities for Hawai'i's people in the remainder of this decade. It has been a pleasure to serve you during the course of this project, and we look forward to working with you in the future. Sincerely, James E. Dannemiller Executive Vice President SMS Affiliations and Associations: Experian International Survey Research Solutions Pacific,LLC SMS Consulting,LLC 3i Marketing&Communications 1 1 Page intentionally blank 1 1 e_. I I ACKNOWLEDGEMENTS Hawaii Housing Planning Study, 2016 J This report is the result of months of work by many people. We wish to acknowledge the sponsors of this project and their continuing dedication to housing planning based on hard data and the needs of Hawaii residents. The people listed below, and the agencies they represent, have demonstrated the wisdom and foresight required to maintain a comprehensive long-range data system for housing planning. In their dedication to the successful resolution of Hawaii's housing problems, they have provided the guidance and direction to put the project in motion, the resources to make it possible, and the tireless dedication to making the system work for the people of Hawaii. • Hawai'i Housing Finance & Development Corporation: Craig K. Hirai, Executive Director; Janice Takahashi, Chief Planner; Lisa Wond, Planner • City and County of Honolulu: Jun Yang, Executive Director, Mayor's Office on Housing, Gail Kaito, Administrator; Dina Wong, Planner • County of Maui: Carol Reimann, Director; Linda Munsell, Housing Program Specialist • Hawai'i County: Susan Akiyama, Housing Director; Noel Fujimoto, Grants Management Division Head • Kaua'i County: Kanani Fu, Housing Director, Gary Mackler, Housing Development Coordinator • Office of Hawaiian Affairs, Deja Ostrowski, Public Policy Advocate; Jim Patterson, Program Improvement Manager3 • U.S. Department of Housing and Urban Development: Jesse Wu, Director of Office of Public Housing; Mark Chandler, CPD Field Office Director • Hawai'i Department of Human Services, Benefit, Employment and Support Services Division, Homeless Programs Office, Harold Brackeen, Acting Administrator; Lori Tsuhako, former Homeless Programs Administrator • Hawaii Tourism Office: George Szigeti, President and Chief Executive Officer; Daniel Nahoopii Director of Tourism Research We would like to give special thanks to Andrew Furuta, Senior Project Manager with A&B Properties, 3 Inc. for allowing the study to include increased sample sizes for all Housing Study partners. I I I 1 1 Hawaii Housing Planning Study,2016 Page ©SMS,Inc December,2016 A large number of housing experts in Hawai'i have contributed to our work and this report. The people listed below have given their time and expertise to provide ideas and direction, data, and review and reaction throughout the last several months. Without their time and talent, this project would not have succeeded. We are grateful to each one of them. • Jun Yang, Executive Director of the Mayor's Office of Housing, City and County of Honolulu ' • David Arakawa, Executive Director, Land Use Research Foundation of Hawai'i • Bob Freitas, Department of Hawaiian Home Lands • Carla Hostetter, Special Projects Research Analyst, Office of Hawaiian Affairs ' • Marie Lihn, Senior Economist, Economic and Market Analysis Division, Policy Development and Research, U.S. Department of Housing and Urban Development • Chris Lau, President, Towne Realty ' • James Ramirez, Vice President Construction, Forest City Hawai'i; Wendy K. Chong, Executive Administrative Assistant, Forest City Hawaii • Stephen Lopez, Honolulu Realtors Association ' • Maelyn Uyehara, Principal, Rider Levett Bucknall • Betty Wood, CDC Prevention Block Grant Coordinator, Hawaii Department of Health • Steve Young, Planning Research Branch Chief, Department of Planning & Permitting, City and ' County of Honolulu; Kathy Sokugawa, Division Chief of Planning, Department of Planning & Permitting, City and County of Honolulu • Mike Sklarz, President, Collateral Analytics 1 Hawai'i Housing Planning Study,2016 Page ii ©SMS,Inc. December,2016 _1 I CONTENTS I. INTRODUCTION 1 I A. BACKGROUND 1 B. PURPOSE 1 I C. METHODS 1 D. REPORT STRUCTURE 2 II. CURRENT HOUSING SITUATION IN HAWAII 3 3 A. HOUSING SUPPLY IN HAWAII 3 1. Current Housing Stock 3 a. Housing Stock Size 4 b. Trends in Housing Stock, 2000-2014 4 c. Homeownership 6 d. Shelter Cost & Shelter-to-Income Ratios 7 e. Crowding and Doubling-up 8 f. Age and Condition of Units 9 2. Housing Production 9 a. Housing Stock Growth, 1990-2014 10 b. Impediments to Production 11 B. HOUSING DEMAND IN HAWAII 13 1. Historic Demand 13 a. Population and Growth Rates 13 b. Components of Population Growth 14 c. Households and Household Size 15 2. Demand for Residential Property by Persons Living Out-of-State 16 a. External Demand and Vacancy Rates 17 b. Impact of Out-of-State Sales on Needed Residential Units 18 3. Survey Demand Estimates 18 a. Raw Demand 18 b. Effective Demand 20 c. Qualified Demand 20 4. Housing Preferences (Buyers & Renters) 21 a. Households Planning to Buy 21 b. Households Planning to Rent 23 5. Housing Preferences 24 a. For Owned Units 24 b. For Rented Units 24 C. HOUSING PRICES 24 1. Sales Prices 25 a. Impact of High House Prices 26 2. Rents 273 3. Affordable Housing 28 Hawaii HousingPlanningStudy,2016 Page in I ©SMS,Inc December,2016 1 I a. Employment and Affordable Prices 28 b. Affordable units in the current housing stock 29 III. HOUSING FORECASTS, 2015-2025 32 A. HOUSING SUPPLY 32 1 Modeled Supply 32 B. HOUSING DEMAND 32 1. Modeled Demand Assumptions 33 2. Demand Estimates 33 4 I C. NEEDED UNITS BY INCOME LEVEL 34 1. Types of Units Needed 37 I 2. Units for Elderly Housing 38 IV. HOUSING ISSUES 40 I A. HOUSING THE MILITARY 40 1. Military Population 40 2. Military Housing 41 I3. Basic Allowance for Housing 41 B. HOMELESSNESS IN HAWAII 44 1. Definition 45 I 2. Homeless Persons and Families 45 3. Homeless Persons Served 48 I a. Numbers 48 b. Characteristics 48 4. Hidden Homeless 49 I5. Risk of Homelessness 50 6. Homeless Strategy 51 a. A Planning Application 53 Ib. A Note on Funding 54 C. TOURISM AND HOUSING 55 I 1. Traditional Relationship 55 2. Foundational Data 56 3 Recent Research 58 I a. Estimating VRU from Visitor Data 58 b. Estimating VRUs from Survey Data 58 c. Adjusting the Estimates 59 I 4. Impact on Housing 60 a. Housing Unit Counts 60 b. Units Used for Visitor Rental 60 I c. The Shared Economy 60 d. Impact on Residential Rents 60 D. SPECIAL NEEDS HOUSING IN HAWAII 63 I1. Demand for Special Needs Housing 63 a. Economic Barriers to Accessing Housing 63 IHawai'i Housing PlanningStudy,2016 Page Y iv ©SMS, Inc December,2016 1 i b Need for Special Services 64 c. Special Needs Housing is Often Temporary 64 3 d Special Needs Persons in Need of Housing 64 e. Inventory of Special Needs Housing 66 f. Needed Units for Special Needs Population 68 2. Recommendation 69 E. HOUSING AND NATIVE HAWAIIANS 70 ' F. SUSTAINABLE AFFORDABILITY 74 V. PUBLIC SECTOR HOUSING RESOURCES 77 1 A. HOUSING FUNDING PATTERNS 77 1. Federal Allocations 77 2. State Allocations 77 I B. GOVERNMENT-ASSISTED HOUSING 79 C. HOUSING PLANS, 2010-2015 81 D. IMPLICATIONS FOR PLANNING 83 1. Housing Realities 83 2. Housing Strategies 84 a. Building Affordable Housing 85 b. Refurbishing 85 c. Efficient Use of Existing Stock 85 d. Taxes and Incentives 86 VI. APPENDIX 87 APPENDIX A: HOUSING TRENDS 88 I APPENDIX B: COUNTY AND DISTRICTS TABLES 109 APPENDIX C: DETAILED DATA WORKSHEETS 120 I APPENDIX D: LAND USE REGULATION INDEX 123 APPENDIX E: SPECIAL NEEDS HOUSING 124 1 APPENDIX F: CONSOLIDATED PLAN HOUSING GOALS 137 APPENDIX G: GLOSSARY 139 APPENDIX H: HAWAII STATE PLANNING ACT (SELECTED SECTIONS) 146 APPENDIX I: BIBLIOGRAPHY 148 I I I I Hawaii HousingPlanningStudy,2016 Page v I Y 0 SMS,Inc. December,2016 I I LIST OF TABLES I TABLE 1.HOUSING UNIT TYPES BY COUNTY,2014 3 TABLE 2.STATE OF HAWAII,CHANGES IN HOUSING STOCK,2011-2014 5 TABLE 3.SHELTER-TO-INCOME RATIO BY COUNTY,2016 7 TABLE 4.CROWDING,STATE AND COUNTIES OF HAWAII,HHPS 1992 THROUGH 2016 8 TABLE 5.TOTAL BUILDING PERMITS ISSUED,COUNTIES AND STATE OF HAWAII,1990-2014 10 TABLE 6.TOTAL POPULATION,1990-2015 14 TABLE 7.COMPONENTS OF POPULATION CHANGE,HAWAII,1990-2014 15 A TABLE 8.NUMBER OF HOUSEHOLDS,1990-2040 15 TABLE 9.POPULATION CHANGE BY COUNTY,2005-2015 16 TABLE 10.TOTAL HOUSEHOLD GROWTH,1990-2015 16 I TABLE 11.AVERAGE HOUSEHOLD SIZE,1990-2015 16 TABLE 12.OUT-OF-STATE SALES,2008-2015 17 TABLE 13.HHPS DEMAND SURVEY DEMAND ESTIMATES,BY COUNTY,2016 19 TABLE 14.TOP SIX REASONS FOR NOT BUYING A HOME,2016 20 IITABLE 15.EFFECTIVE DEMAND FOR NEXT FIVE YEARS BY COUNTY,1992,1997,2003,2006,2011,AND 2016 20 TABLE 16.QUALIFIED DEMAND FOR ALL UNIT TYPES BY COUNTY,1992,1997,2003,2006,2011,AND 2016 21 TABLE 17.FINANCIAL QUALIFICATION TO PURCHASE A SINGLE FAMILY HOME,COUNTIES&STATE,2016 22 I TABLE 18.FINANCIAL QUALIFICATION TO PURCHASE A MULTI-FAMILY UNIT,COUNTIES&STATE OF HAWAII,2016 22 TABLE 19.FINANCIAL QUALIFICATION TO RENT A MULTI-FAMILY UNIT,COUNTIES AND STATE OF HAWAII,2016 23 TABLE 20.FINANCIAL QUALIFICATION TO RENT A SINGLE FAMILY UNIT,COUNTIES AND STATE OF HAWAII,2016 24 I TABLE 21.MEDIAN HOME SALES PRICES,COUNTIES AND STATE OF HAWAII,2009 AND 2015 26 TABLE 22.AVERAGE RENT FOR ALL UNITS,COUNTIES AND STATE OF HAWAII,2009-2016 27 TABLE 23.AVERAGE FAIR MARKET RENT FOR ALL UNITS,COUNTIES OF HAWAII,2009-2016 27 TABLE 24.AVERAGE RENT BY UNIT TYPE AND SIZE,STATE OF HAWAII,2009-2016 28 I TABLE 25.FY16 HOUSING WAGE,HAWAII 2016 29 TABLE 26.AFFORDABLE HOUSING UNITS BY OCCUPANCY,TENURE,AND COUNTY,2014 30 TABLE 27A.HOUSING DEMAND BY INCOME CLASSIFICATION,COUNTIES&STATE OF HAWAI`I,2015-2025 34 I TABLE 27B.HOUSING DEMAND BY HUD INCOME CLASSIFICATION,COUNTIES&STATE OF HAWAII,2015-2025 35 TABLE 28.HOUSING DEMAND BY INCOME CLASSIFICATION,COUNTIES AND STATE OF HAWAII,2015-2025 36 TABLE 29.HOUSING DEMAND BY HUD INCOME CLASSIFICATION,ELDERLY PERSONS,HAWAII,2015-2025 39 I TABLE 30.BASIC ALLOWANCE FOR HOUSING,2000-2016 42 TABLE 31.HOMELESS PERSONS BY COUNTY,2009-2015 46 TABLE 32.HOMELESS PIT COUNTS,STATE AND COUNTIES OF HAWN'',2009-2015 47 TABLE 33.HOMELESS SERVICE CLIENTS BY COUNTY,FY 2008-2015 47 I TABLE 34:ETHNIC BACKGROUND OF HOMELESS PERSONS,FY 2015 48 TABLE 35.AT-RISK AND HIDDEN HOMELESS HOUSEHOLDS,STATE AND COUNTIES OF HAWAII,2016 50 TABLE 36.EXPECTED CONDITION IF FORCED TO MOVE OUT OF HOUSING UNIT,BY COUNTY,2016 50 I TABLE 37.AT-RISK AND HIDDEN HOMELESS HOUSEHOLDS,STATE OF HAWAII,1992-2016 51 TABLE 38.HOMELESS HOUSEHOLDS EXITED TO PERMANENT HOUSING,2015 53 TABLE 39.HAwAI`I VISITOR INDUSTRY STATISTICS,2008-2015 57 I TABLE 40.RESIDENTIAL CONTRACT RENT FOR VISITOR AND NON-VISITOR AREAS BY COUNTY,2010-2015 62 TABLE 41.SPECIAL NEEDS GROUP SIZES 6S TABLE 42.COMMUNITY CARE FOSTER FAMILIES 66 I TABLE 43.ADULT RESIDENTIAL CARE HOMES,HAWAII,AS OF MAY 5,2016 67 TABLE 44.ASSISTED LIVING FACILITIES,HAWAII,AS OF MAY 13,2016 67 TABLE 45.SKILLED NURSING AND INTERMEDIATE CARE FACILITIES,HAWAII,2016 67 TABLE 46.OTHER INTERMEDIATE CARE FACILITIES,HAWAII,2016 68 I TABLE 46.NEEDED UNITS FOR SPECIAL NEEDS POPULATION, HAWAII,2015-2025 68 TABLE 48.DEMAND AND HOUSING PREFERENCES,NATIVE HAWAIIAN AND NON-NATIVE HAWAIIAN HOUSEHOLDS,2016 72 TABLE 49.HOUSING DEMAND BY HUD INCOME CLASSIFICATION,NATIVE HAWAIIAN,HAWAII,2015-2025 73 IHawai'1 Housing Planning Study,2016 Page vi ©SMS, Inc. December,2016 I TABLE 50.SUSTAINABLE LEASE CONSIDERATIONS BY COUNTY,2006,2011 AND 2016 74 TABLE 51.AFFORDABLE PURCHASE CONSIDERATIONS 75 TABLE 52. FEDERAL HOUSING EXPENDITURES IN HAWAII,2016. 78 TABLE 53: STATE LEGISLATIVE FUNDING FOR HOMELESS AND AFFORDABLE HOUSING,2010 TO 2017 78 TABLE 54. TYPES OF UNITS CONSTRUCTED,2000-2010 81 TABLE 55. TYPES OF UNITS CONSTRUCTED AND ASSISTED,2000-2010 82 TABLE 56. TYPES OF UNITS CONSTRUCTED AND ASSISTED,2000-2010 82 TABLE A-1.CHARACTERISTICS OF HOUSING UNITS,1992,1997,2003,2006,2011 AND 2016 88 TABLE A-2.HOUSEHOLD INCOME DATA,1992,1997,2003,2006,2011,AND 2016 89 TABLE A-3.HOUSEHOLDS AT HUD INCOME GUIDELINES BY COUNTY,1992,1997,2003,2006,2011 AND 2016 90 TABLE A-4.HOUSING UNIT CONDITION,OWNED UNITS,1992,1997,2003,2006,2011,AND 2016 91 TABLE A-5.HOUSING UNIT CONDITION,RENTED UNITS,1992,1997,2003,2006,2011 AND 2016 92 TABLE A-6.AVERAGE MONTHLY HOUSING COST,1992,1997,2003,2006,2011 AND 2016 93 TABLE A-7.MORTGAGE PAYMENTS BY YEARS IN UNIT,1992,1997,2003,2006,2011,AND 2016 94 TABLE A-8.HOUSEHOLD COMPOSITION,1992,1997,2003,2006,2011,AND 2016 95II TABLE A-9.HOUSEHOLD CROWDING,1992,1997,2003,2006,2011,AND 2016 96 TABLE A10.SHELTER-TO-INCOME RATIOS,1992,1997,2003,2006,2011,AND 2016 97 TABLE A-11.SHELTER-TO-INCOME RATIOS BY YEARS IN UNIT,1992,1997,2003,2006,2011,AND 2016 98 TABLE A-12.INTENTION TO MOVE,1992,1997,2003,2006,2011 AND 2016 99 TABLE A-13.PREFERRED LOCATION FOR NEXT MOVE, 1992,1997,2003,2006,2011 AND 2016 100 TABLE A-14.TENANCY PREFERENCE OF CURRENT OWNERS&RENTERS,1992,1997,2003,2006,2011,AND 2016 101 7 TABLE A-15.PREFERRED UNIT TYPE,BUYERS,1992, 1997,2003,2006,2011,AND 2016 102 TABLE A-16.PREFERRED UNIT TYPE,RENTERS,1992,1997,2003,2006,2011,AND 2016 103 TABLE A-17.PREFERRED NUMBER OF BEDROOMS,BUYERS,1992,1997,2003,2006,2011,AND 2016 104 TABLE A-18.PREFERRED NUMBER OF BEDROOMS,RENTERS,1992,1997,2003,2006,2011,AND 2016 105 TABLE A-19.AFFORDABLE HOUSING COST FOR NEW UNITS,BUYERS,1992,1997,2003,2006,2011,AND 2016 106 TABLE A-20.AFFORDABLE HOUSING COST FOR NEW UNITS,RENTERS,1992,1997,2003,2006,2011,AND 2016 107 TABLE A-21.PREFERRED LOCATION OF NEW HOUSING UNIT,2016 1081 TABLE B-1. UNIT DESCRIPTIONS,COUNTY AND DISTRICTS OF HAWAII,2016 . 109 TABLE B-2.HOUSEHOLDS DEMOGRAPHICS,COUNTY AND DISTRICTS OF HAWAII,2016 110 TABLE B-3.FINANCIAL CHARACTERISTICS,COUNTY AND DISTRICTS OF HAWAI'I,2016 111 TABLE B-4.DOUBLING UP,CROWDING,AND HIDDEN HOMELESS,COUNTY AND DISTRICTS OF HAWAII,2016 112 TABLE B-5.INTENTION TO MOVE,COUNTY AND DISTRICTS OF HAWAI'I,2016 113 TABLE B-6.MOVER TENANCY PREFERENCES,COUNTY AND DISTRICTS OF HAWAI'I,2016 114 TABLE B-7.BUYER UNIT PREFERENCES,COUNTY AND DISTRICTS OF HAWAI'I,2016 115 TABLE B-8.RENTER UNIT PREFERENCES,COUNTY AND DISTRICTS OF HAWAI'I,2016 116 TABLE B-9.PREFERRED NEXT LOCATION,COUNTY AND DISTRICTS OF HAWAI'I,2016 117 TABLE B-10.CURRENT AND AFFORDABLE HOUSING PAYMENT,COUNTY AND DISTRICTS OF HAWAI'I,2016 118 TABLE B-11.DOWN PAYMENT AND REAL ESTATE OWNERSHIP,COUNTY AND DISTRICTS OF HAWAII,2016 119 TABLE C-1. HOME OWNERSHIP RATES,1990-2014 120 TABLE C-2.VACANCY RATES,BY STATE: 1986 TO 2015 121 3 TABLE C-3. VACANCY CATEGORIES,2009-2014 122 TABLE D-1. WHARTON RESIDENTIAL LAND USE REGULATION INDEX BY STATE 123 TABLE E-1.SPECIAL NEEDS POPULATION AND HOUSING SUMMARY,CITY&COUNTY OF HONOLULU,2011 124 i TABLE E-2.SPECIAL NEEDS POPULATION AND HOUSING SUMMARY,COUNTY OF HAWAII,2011 124 TABLE E-3.SPECIAL NEEDS POPULATION AND HOUSING SUMMARY,COUNTY OF MAUI,2011 125 TABLE E-4.SPECIAL NEEDS POPULATION AND HOUSING SUMMARY,COUNTY OF KAUA'I,2011 125 TABLE E-5.AM HD STATEWIDE CURRENT AND PLANNED HOUSING INVENTORY,2004-2012 1263 TABLE E-6.HOUSING AFFORDABILITY ESTIMATES,2016 128 TABLE E-7.PUBLIC HOUSING UNITS NUMBERS,2000-2015 129 TABLE E-8.PUBLIC HOUSING UNITS NUMBERS,2000-2015 130 TABLE E-9.ADULT RESIDENT CARE HOME NUMBERS,2016 131 TABLE E-10.MEDIAN RENT FOR SFD AND MFD BY NUMBER OF BEDROOMS,COUNTY OF HAWAI'I,2009-2015 132 Hawaii Housing Planning Study,2016 Page vii , ©SMS, Inc. December,2016 I I TABLE E-11.MEDIAN RENT FOR SFD AND MFD BY NUMBER OF BEDROOMS,CITY AND COUNTY OF HONOLULU,2009-2015 133 TABLE E-12.MEDIAN RENT FOR SFD AND MFD BY NUMBER OF BEDROOMS,COUNTY OF KAUAI,2009-2015 134 TABLE E-13.MEDIAN RENT FOR SFD AND MFD BY NUMBER OF BEDROOMS,COUNTY OF MAUI,2009-2015 135 TABLE E-14.MEDIAN SALES PRICE FOR SINGLE-FAMILY DWELLINGS BY COUNTY,2000-2014 [IN THOUSAND DOLLARS,ROUNDED TO THE I NEAREST THOUSAND] 136 TABLE E-15.MEDIAN SALE PRICE FOR CONDOMINIUM UNITS BY COUNTY,2000-2014[IN THOUSAND DOLLARS] 136 TABLE F-12.FIVE-YEAR CONSOLIDATED PLAN HOUSING GOALS:2015-2019 137 I TABLE F-2 STATE AND COUNTIES CONSOLIDATED PLAN 2015 ANNUAL GOALS 138 I III I I I I I I I I I I IHawai'i Housing Planning Study,,2016 Page viii ©SMS,Inc. December,2016 1 LIST OF FIGURES 1 FIGURE 1.VACANT HOUSING UNITS,COUNTY OF HAWAII,2009-2014 6 FIGURE 2.HOUSING STOCK BY COUNTY,2000-2014 6 3 FIGURE 3.HOMEOWNERSHIP RATES,1990-2014 7 FIGURE 4.BUILDING PERMITS&ADDED UNITS,STATE OF HAWAI`I,2000-2014 11 FIGURE 5.VACANT UNITS HELD FOR SEASONAL OR OCCASIONAL USE,BY COUNTY,2000-2015 17 FIGURE 6.HOUSING PRICES IN HONOLULU,1980-2015 26 FIGURE 7.AVERAGE RENTS,COUNTIES AND STATE OF HAWAI'I,2009-2015 27 FIGURE 8.PERCENTAGE OF OCCUPIED HOUSING UNITS THAT WERE AFFORDABLE AT 80%AM I,2010—2014 31 FIGURE 9.NEW CONSTRUCTION,STATE OF HAWAI'I,1990-2040 32 FIGURE 10 TOTAL HOUSEHOLDS,STATE OF HAWAI`I,1990-2040 33 FIGURE 11.ACTIVE MILITARY PERSONNEL,STATE OF HAWAI'I, 1983-2015 40 FIGURE 12.AVERAGE BAH,E-3 THROUGH E-6 MILITARY PERSONNEL AND MEDIAN GROSS RENTS,CITY AND COUNTY OF HONOLULU,2000- 2016 43 FIGURE 13.HOMELESS PIT COUNT,U.S.AND HAWAI'I,2009-2015 46 FIGURE 14.LOCATION BEFORE ENTERING SHELTER,2015 49 111 FIGURE 15.THE FLOW OF PERSONS THROUGH HAWAI'I'S HOMELESS PROGRAMS,STATE OF HAWAII,2015 52 FIGURE 16.ESTIMATED VRU AND IAU INVENTORIES AVAILABLE IN HAWAI'I,2005-2015 58 FIGURE 17.HAWAI'I VISITOR ROOM RATES AND RESIDENT RATES,2008-2016 61 FIGURE 18.STATE ALLOCATIONS FOR HOUSING,2010-2017 79 FIGURE 19.AFFORDABLE HOUSING UNITS CONSTRUCTED,2000-2010 80 I 3 I 3 3 1 Hawaii Housing Planning Study,2016 Page ix ©SMS, Inc. December,2016 t I. INTRODUCTION A. BACKGROUND inventory data were taken from real property tax I I files for the four counties. Results are presented The Hawaii Housing Planning Study (HHPS) in a separate report and have been incorporated series began in 1992. The studies have been in this report as needed. Beginning in 2011, the ' conducted as comprehensive assessments of inventory expanded to include U.S. Decennial housing markets in Hawaii. Results covering all Census data and data taken from the American four of Hawaii's counties have been presented Community Survey (ACS). 1 in a set of reports summarizing market conditions. Since 1997, HHPS has included a Housing Demand Survey: A statewide survey housing forecast to support housing planning. of more than 5,000 households was conducted ' Over the years, HHPS studies have investigated in order to measure resident opinions and a rotating list of housing issues. Some issues evaluations of current housing conditions, their have remained part of the study and some have plans to move to a new unit, their preferred been replaced with issues of greater interest. In characteristics of new units, their financial 2016, HHPS includes the influence of access to qualifications for purchase or rent, and public transportation and/or mass transit on household demographic information. Special preferred housing location, special finance topics for 2016 included: special financing t options for homebuyers, a new viewpoint on options, special needs housing, and housing homelessness, the relationship between tourism prices. and housing, and housing for special needs ' groups. Housing Forecast Project: In the past, forecasts were taken from a separate housing B. PURPOSE model developed in the nineties. In 2016, the forecasting method was updated to incorporate The purpose of the 2016 HHPS report is to new and more relevant data. Forecasted provide housing planners with contemporary elements included housing stock, housing data on the housing situation in Hawaii to demand, housing production, and housing support planning activity. Reported here is prices, all to support an estimate of needed units research conducted from September 2015 by income group through the year 2025. through June 2016. Included in this study are ' housing demand, housing supply, housing Housing Price Study: A study of housing prices, affordable housing, and needed housing prices, sales prices for ownership units and units. Findings are fully supported by analysis of contract rents for rental units was conducted. data from both the Housing Demand Survey and Data were collected from several sources numerous secondary data sources including the including rental unit advertisements, a national United States Census Bureau and Hawaii's rent producer, several real estate data providers, ' Department of Business, Economic the U.S. Department of Housing and urban Development & Tourism among others. Development (HUD), and the ACS. 1 C. METHODS Producers Survey: We conducted interviews with housing producers and planning department The HHPS 2016 incorporates data from 11 data personnel in order to enhance understanding of collection and analysis sources: issues related to housing development and to Housing Stock Inventory: An inventory of all ' An excellent description of the American Community residential housing units in the State was Survey appears at the U.S. Census website ' conducted in the first quarter of 2015. The http://www.census.gov/acs/www/about_the_survey/ame rican_communitysurvey/ 1 Hawaii Housing Planning Study,2016 Page 1 ©SMS, Inc. December,2016 I review County data on scheduled housing unit Although they are not part of, but closely related production. Findings were used to develop to this study, there were two Fair Market Rent estimates of short-run housing production. surveys conducted, one each for the Counties of Kauai and Maui during the course of HHPS Housing for Special Needs Groups Study: 2016. This study centered on interviews with service providers and advocates for people with special Each of these project elements is described in needs. The focus was on demand and supply of detail in the HHPS 2016 Technical Report. housing units to serve their particular needs. Statistical data were gathered to connect the D. REPORT STRUCTURE needs data with housing planning and production in the next five years. The report begins with Section II, a description of current housing conditions in Hawai'i including Homeless Study: Information was drawn from demand, supply, and pricing of residential units several HHPS components to generate a more over time. Section III discusses the forecasted comprehensive understanding of homelessness demand for housing units --"Needed Units" -- as a housing issue this year. Here too, the from 2015 through 2025. Section IV covers the intention was to bring homelessness studies into current housing issues for the year: the realm of housing planning and production. transportation, sustainable affordability, military housing, tourism, homelessness, and housing for Tourism Study. A separate study component persons with special needs. Section V discusses covered the relationship between the number recent housing production in the public sector. one industry in Hawaii - tourism - and the residential housing market. To our literature An appendix presents support materials for search and secondary data gathering, we added major elements of the report and a glossary of specific questions to the Demand Survey and terms. conducted a special survey of out-of-state property owners. Hawaiians: To enable certain stakeholders to conduct more in-depth analysis, the number of surveys conducted with residents self-identifying as Hawaiian or Part-Hawaiian were increased in the Housing Demand survey and questions were added just for this group. Military Housing: The role of military housing has always been included in the HHPS, at least in the inventory. In 2016 there was an effort to expand coverage of the influence of military housing on the residential housing market in Hawaii. Secondary Data: The study team gathered existing data and available forecasts to support each of the study elements discussed here. We also reviewed housing plans and production, government spending on housing, and comparisons with housing data in other states and municipalities. Hawaii Housing Planning Study,2016 Page 2 ©SMS, Inc. December,2016 I I II. CURRENT HOUSINGSITUATION ` S U TION IN HAWAII IThe 2016 study of Hawai`i's housingmarket and housingunits that have traditionallybeen housing needs begins with a review of the basic excluded from total housing units include group I elements of housing planning. The report covers quarters (prisons, dormitories, nursing homes, those issues in three major sections - housing shelters, etc.) and commercial residential supply, housing demand, and housing prices. properties (hotels, condominium hotels, hostels, I timeshare units, etc.), which are available only A. HOUSING SUPPLY IN HAWAII on a short-term rental basis. I In this section we consider (1) housing stock, the Total housing units are further defined as either current collection of housing units available to occupied or vacant. By Census convention, the Hawaii residents and migrants, and (2) housing number of occupied housing units is always I production methods and the rate at which new equal to the number of households in the State. housing units are added to the housing stock. The total housing stock includes all occupied housing units plus vacant housing units available to the market (Table 1). I 1. Current Housing Stock According to the Census, there were 524,852 Residential housing construction fell after the housing units in Hawaii in 2014, up about one- Great Recession began in Hawaii in 2008. I half of one percent from 522,164 units in 2013. Total housing units grew by about 5,600 units per year (2.2%) between 2009 and 2011. A housing unit, as defined by the U.S. Census, is Between 2011 and 2014, growth slowed to I a unit that is available for occupancy as an owned 2,800 units per year - half what it was in the or long-term rental unit. Some other types of previous five years. ' Table 1. Housing Unit Types by County, 2014 County Housing Unit Types Hawaii Honolulu Kauai Maui State Total Housing Units 83,904 339,830 30,112 71,006 524,852 Available Housing Units (Housing 69,458 321,661 24,955 61,446 477,520 I Stock) Occupied Housing Units 64,586 310,141 22,395 53,177 450,299 Vacant and Available 4,872 11,520 2,560 8,269 27,221 IUnits Not Available (long-term 14,446 18,169 5,157 9,561 47,333 vacancies) I Vacant for seasonal use 11,008 10,732 4,270 7,044 33,054 Vacant for agricultural use 25 32 30 6 93 Other vacant 3,413 7,405 857 2,510 14,185 IavailablePercent occupied and vacant & 82.8% 94.7% 82.9% 86.5% 91.0% Percent unavailable units 17.2% 5.3% 17.1% 13.5% 9.0% 1 Percent vacant for seasonal units 13.1% 3.2% 14.2% 9.9% 6.3% Percent other vacant 4.1% 2.2% 2.8% 3.5% 2.7% Source:ACS 2014 5-yr Estimates,Table B25004 and DP04 IHewai'i Housing Planning Study,2016 Page 3 ©SMS,Inc. December,2016 3 two states ranked higher than the County of a. Housing Stock Size Hawaii with respect to the percent of total units Among the 524,852 housing units in Hawaii in held off the market for seasonal use. 2014, 477,520 housing units were available to Across the State, there were major differences in the resident housing market; 450,299 were the percent of total housing units counted as occupied housing units and 27,221 were housing stock. In the Counties of Hawaii and available vacant units. Kauai, 17 percent of all units were unavailable. About 47,333 housing units (9.0%) were not part Over 13 percent of Maui County's units were of the housing stock in 2014. Of those, nearly 70 unavailable, while only 5 percent of units in the percent were vacant for seasonal, recreational, City and County of Honolulu were classified as or occasional use. A very small number (93) unavailable. were vacant and held off the market for use by migrant agricultural workers b. Trends in Housing Stock, 2000-2014 Units that are vacant for seasonal, recreational A brief overview of results taken from the 2011 or occasional use (seasonal) are the largest and 2016 housing studies will highlight the component of Hawaii's unavailable housing changes to the housing stock in recent years. units. There were 33,054 of them in 2014. That Table 2 presents the data summary. was 44.4 percent of vacant housing units and 6.3 percent of all housing units in the State. This Leading up to Table 2, we note that between was also an increase of 23 percent from the 2003 and 2007, Hawaii added 31,639 housing 2011 HHPS. We will return to this subject again units to its total. Between 2007 and 2011, in the visitor industry impact section of the report. 14,895 were added. Between 2011 and 2014, 7,468 units were added to total housing units.3 Finally, 14,185 housing units were classified Clearly, annual housing production slowed "other vacant." This is a catchall category that dramatically in the first half of the present includes units vacant for reasons other than decade those specifically defined in Census documents. In 2014, Hawaii's other vacant units made up 30 Housing stock grew at a faster rate than total percent of vacant and unavailable units and 2.7 housing units before 2011 (6,100 units per year) percent of total housing units. The American and slowed to 1,115 units per year between Housing Survey defines "other vacant" as units 2011 and 2014. The drop in the growth rates held for settlement of an estate, units held for matched a relatively sharp rise in the number of occupancy by a caretaker or janitor, and units new seasonal units that appeared during that held for personal reasons of the owner.2 The period -- from 564 units per year before 2011 to 3 definition includes housing units that are being 1,163 units per year thereafter. That caused a held off the market while a decision is made drop in the number of vacant and available regarding their status. Types of decisions include housing units (2,334 units per year before 2011 litigation, settling estates, involvement in other to -314 per year afterward). legal proceedings, units held while they are being refurbished or rebuilt, or while owners are Continuing a pattern set in the last decade, more deciding what to do with their vacant property. multi-family units were produced than single- family units. Hawaii is in the top quartile among states losing housing units to vacancies. We ranked 12th for percent of total housing units held for seasonal, recreational, and occasional use in 2014. Only 2 American Housing Survey 2013, Subject Definitions, a DBEDT Data Book 2014,Table 21.20, Housing Units by Appendix A. Definitions and Index for Table Numbers. County: 2000 to 2014. Hawai'i Housing Planning Study,2016 Page 4 ©SMS,Inc December,2016 1 I Table 2. State of Hawaii, Changes in Housing Stock, 2011-2014 2011 2014 Change 2011-2014 I Number Percent Number Percent Number Percent Total Housing Units 516,394 100% 524,852 100% 8,458 1.6% Single Family 278,596 54% 282,060 54% 3,464 1 2% IMulti-Family 237,798 46% 242,792 46% 4,994 2.1% Total Available Housing Stock 473,676 92% 477,520 91% 3,844 0 8% I Total Occupied Housing Units 445,513 86% 450,299 86% 4,786 1 1% Owner Occupied Units 261,516 51% 257,121 49% 4,395 -1.7% Renter Occupied Units 183,997 36% 193,178 37% 9,181 5.0% ITotal Vacant Units 70,881 14% 74,553 14% 3,672 5.2% Vacant Available 28,163 5% 27,221 5% -942 -3.3% I For Rent 19,560 4% 18,704 4% -856 -4.4% Rented, not occupied 2,086 0% 2,418 0% 332 15.9% For Sale only 4,913 1% 4,085 1% -828 -16.9% ISold, not occupied 1,604 0% 2,014 0% 410 25.6% Vacant Unavailable 42,718 8% 47,332 9% 4,614 10.8% Seasonal Use 29,564 6% 33,054 6% 3,490 11.8% For Migrant Workers 162 0.03% 93 0.02% -69 -42.6% Other Vacant 12,992 2 5% 14,185 2.7% 1,193 9.2% I Source:ACS Table B25004, S2504, and S1101 I I I I I I 1 ' Hawaii HousingPlanningStudy,2016 Y Page 5 ©SMS, Inc. December,2016 I I Table 2 shows that growth in housing stock Hawaii increased by 16 percent in the years I (units available to the local housing market) was between 2000 and 2014. The County of Hawaii less than one percent over four years. Growth in had the largest average annual increase, adding occupied housing units was not much higher at 2.1 percent to its housing stock each year. I 1.1 percent over four years. Figure 2. Housing Stock by County, 2000-2014 The growth in renter occupied units (5.0%) offset 600 Honolulu —Maui Hawaii I the loss of owner occupied units (-1.7%) and the —Kaua'i —State net gain in occupied housing units ended up at 1.1 percent for the 4-year period. 0 500 1 The larger changes were in vacant units N 400 categories. The State lost 942 vacant and ..- I available housing units between 2011 and 2014. A drop in vacant and available units usually o 300 means the market is tighter, with lower inventory, L;, less time between listing and sale or rent, and ,200 I higher prices. Lii 0 I On the other hand, the vacant and unavailable 100 I housing stock went up by 4,614 units in those last four years. That was an increase of almost o 11 percent for the period. 0 .i N m Q IA N CO rn 0 •-I N m C I The construction slowdown held back growth in 0 0 0 0 o 0 0 0 o 0 0 0 0 0 0 NNNNNNNNNNNNNNN occupied units, but the most important changes 1). Source. SMS calculations from State of Hawaii Time Senes Data were those in vacant units (Figure I Book and ACS Tables in Series B25000. Figure 1.Vacant Housing Units, County of Hawaii, 2009-2014 c. Homeownership 25,000 I—c—Total Vacant Housing Units Homeownership rates have fallen across the — —Vacant and Available nation since the Great Recession and Hawaii ,,, - —Vacant and Unavailable 20,000 Seasonal was no exception.4 Some experts feel the low I_______0„......._______0„........4)- homeownership rate is a sign that the housing market recovery is not yet complete. High 0 15,000 prices, low inventories and a lack of confidence I I ----" :---- in the market have slowed sales, especially in high-priced markets like Hawai'i's. More > 10,000 / important, the impact of the slow recovery falls heaviest on first time buyers. It is their entry to I the market that boosts the homeownership rate. 5,000 _ --- I 0 2009 2010 2011 2012 2013 2014 I Source:ACS Table B25003, 5-yr estimates. 4 American Community Survey rates are different from Over the past 15 years, the average annual those of the Federal Reserve Bank. The Federal I increase in housing stock (occupied plus vacant Reserve Bank of St. Louis' Federal Reserve Economic and available housing units) was about 1 percent Data (FRED) shows the rate climbing after 2011. ACS has it continuing to fall as in the rest of the nation. We per year (Figure 2). Housing stock in the State of will follow ACS data. I Hawaii Housing Planning Study,2016 Page 6 ©SMS, Inc December,2016 I L LFigure 3. Homeownership Rates, 1990-2014 for necessities and are more likely to qualify for 70% mortgage loans. L In 2016, the proportion of Hawaii households m 65% -- - -- paying less than 30 percent of household income r `` for shelter (rent or mortgage plus utilities) was up 3_- L ca. _ -_ to 58 percent.5 We had 11 percent paying 30 to 60% , 39 percent and 7 percent with STI ratios of o �_ between 40 and 50 percent. Our severely cost I burdened households were at 18 percent. 55% Table 3. Shelter-to-Income Ratio by County, 2016 1 50% Shelter County _ Payment State 1992 1999 2003 2009 2011 2013 as%of HH Hawaii Honolulu Kauai Maui Year Income I None 27.0% 21.3% 20.8% 15.0% 21.4% —State—Hawaii Honolulu Maui---Kauai Less than 37 2% 37 1% 36.8% 35 2% 36 8% 30% ISource: U.S Census 1990-2005; ACS, 2005-2014. An 30 to 40% 10.3% 11.4% 10.8% 12 4% 11.3% atypical one-year drop in 2007 has been smoothed here 40 to 50% 4.0% 7.0% 5.6% 7.2% 6.5% L More The decline in rates of homeownership is a 50% than 15 2% 17.4% 20.7% 24 2% 18.0% recent phenomenon. Between 1990 and 2010, Source: Housing Demand Survey, 2016. Base is shelter while the housing stock was growing, payments for owners and renters in Hawaii. homeownership rates also grew (Figure 3). ilk Homeownership rose during the market run-up in the early nineties and fell during the late nineties. The percent of households with an STI ratio of It rose again during the last housing market more than 30 percent is often used as an boom to a high of 60 percent in 2006. indication of housing affordability. There is Homeownership in Hawaii has been falling evidence that Hawai'i's STI ratios are higher than steadily since that time. In 2014, the Census most of the nation. In 2014, the percentage of I reports it at 57.1 percent Statewide. That was mortgage holders whose monthly housing cost just a little higher than the 2000 level. Figure 3 was greater than 30 percent of monthly income shows state and county homeownership rates as was 46.5, the highest in the nation. The they drifted downward from a high in 2005. percentage of renters paying more than 30 percent was 56.8 percent, ranking Hawaii third in the nation after Florida (59 0%) and California d. Shelter Cost& Shelter-to-Income Ratios (57.2%). High-priced housing markets like Hawai'i's often STI ratios usually rise slowly over time and have have high ratios of shelter cost to household changed very little in Hawaii in recent years.6 Iincome. Households with shelter-to-income (STI) STI ratios for rented households are higher than ratios greater than 30 percent are said to be cost are those for homeowners and rise a bit faster burdened, and those with ratios higher than 50 over time. The depressed housing market of the i percent are said to be severely cost burdened. nineties held prices and rents in check while the burgeoning economy raised household incomes. In 2011, about 51 percent of Hawaii residents Housing prices soared between 2003 and 2006 V were paying less than 30 percent of their monthly income for shelter. At that level, 5 ACS 2015, Table DP04, Housing Characteristics. ACS households can use 70 percent of their incomeand HHPS use slightly different calculation methods. 6 See Table A-10 and A-11 in the Appendix for trend data. Hawaii Housing Planning Study,2016 Page 7 ©SMS, Inc. December,2016 ili and pushed the number of renter households Table 4. Crowding, State and Counties of Hawaii, paying more than 40 percent of their income for HHPS 1992 through 2016 shelter to 43 percent in 2006, 45 percent by Crowded 2011, and 46 percent in 2014.' and/or I Total Doubled Doubled The shelter-to-income picture shows some Year Households Crowdeda Upb Up c important differences across counties (Table 3) 1992 247,349 23.2% 32.0% that suggest different levels of housing 1997 272,234 10.6% 27.2% affordability across the State. In Honolulu Honolulu 2003 292,003 10.1% 10.0% 17.6% County, the percentage of households paying 2006 303,149 8.1% 9.7% 15.2% I less than 30 percent of their income for shelter 2011 310,882 13.3% 13.8% 22.9% 2016 317,459 11.4% 11.9% 21.0% was 58.4 percent. The percentage paying more 1992 34,266 26.8% 25.9% than 40 percent, on the other hand, decreased 1997 39,252 10.4% 24.8% 6.2 percent between 2011 (30.6%) and the 2003 43,687 11.0% 8.7% 17 3% 1 present (24.4%). Maui 2006 49,484 7.7% 9.6% 15.3% 2011 54,132 10.7% 13.0% 19.2% 2016 55,059 9.8% 14.1% 21.4% e. Crowding and Doubling-up 1992 39,789 18.7% 26 0% 1997 46,271 7.9% 24 3% Crowding and doubling-up are frequently used Hawaii 2003 54,644 7.0% 9.3% 14.4% measures of housing condition. Both are 2006 61,213 6.9% 11.2% 15.9% accepted as indicators of housing issues. They 2011 67,096 8 4% 11.3% 17.2% are thought of as measures of pent-up demand 2016 66,989 7.4% 11.1% 16.0% I for housing and as a sign that household 1992 16,981 17 4% 26 3% formation may be constricted. 1997 18,817 9.1% 25.4% Kauai 2003 20,460 6.0% 12.5% 16.1% 2006 21,971 6.6% 11.9% 15.5% I We sometimes hear that Hawai`i's doubling-up 2011 23,201 10.5% 11.7% 18.1% rate is a cultural phenomenon caused by our 2016 23,369 8.9% 11 5% 19 2% propensity for extended family living. Our 1992 338,385 22.2% 30.3% relatively large household size supports that 1997 376,574 10.2% 26.5% idea. However, survey questions measured 2003 410,794 9.6% 10.0% 17.1% doubling up for financial reason only and show state 2006 435,818 7.8% 10.0% 15.3% substantial doubling rates for all ethnic groups. 2011 455,311 12 1% 13.2% 21 4% 2016 462,876 10.5% 12.0% 20.2% In past studies, crowding was measured using Source: Housing Demand Survey, 1992, 1997, 2003, 2006, the Census method (the ratio of persons in the 2011,2016 a Based on more than one person per room for 1992-2011, household to rooms in the unit they occupy). then 2 persons per bedroom for 2016. This year we are switching to the persons per b. More than one family group in a single housing unit (See bedroom definition, which we believe is the more Glossary) appropriate measure for housing planning. c. Before 2003, question asked if a household was crowded or doubled up After 2003, HHPS measured crowded and doubled up separately and then combined them Table 4 shows HHPS crowding and doubling-up data for the State and each of the counties. The doubling-up measure is a measure that includes having more than two generations in the household, having unrelated individuals in the household, or having same-generation relatives in the household. In all cases, the Housing Demand Survey shows that doubled-up persons are in the household because they cannot afford ACS,Table B25070, 2006-2014. to live elsewhere Hawaii Housing Planning Study,2016 Page 8 ©SMS, Inc December,2016 l; L The 1992 study followed a major price run-up focus on matters other than the age and during which high prices kept many would be condition of existing residential units. buyers from entering the market. The study conducted in 1997 was nearing the end of a very Statewide, the median year built for residential long market recovery during which incomes were housing units was 1978, which is slightly catching up with prices and crowding was younger than the national median build year of notably lower than in 1992. The 2003 measure 1977. Among the Counties, Maui's units are the was taken at the beginning of the next price run- oldest with a median build year of 1964 followed up. by Honolulu County (1975), Kaua'i County 0 (1984), and Hawaii County (1986). By 2006, Hawaii was at the peak of the largest price run-up in its history. During that period, Statewide, very few of Hawaii's housing units crowding and doubling remained low. In 2008, are in poor condition or substandard as defined the Great Recession began in the housing by the US Census Bureau (lacking complete market and the effects were dramatic. Yet, by plumbing and/or kitchen facilities). According to 2011, crowding seemed to have abated and the 2014 5-year estimate from ACS, less than evidenced a slight decrease from 2006. In 2016, one percent of occupied housing units Statewide levels of crowding appear to be on the rise have incomplete plumbing facilities, and 1 8 again, although the increase from 2011 is not percent have incomplete kitchen facilities. significant. Across the Counties, the rate of incomplete plumbing facilities ranges from a high of 2.0 Table 4 also shows that crowding and doubling- percent in Hawaii County to a low of 0.4 percent up behave differently in each of the counties. In in Honolulu County. The Counties also report a general, the rates are most volatile in the City low incidence of incomplete kitchen facilities and County of Honolulu. Maui and Kauai have ranging from a high of 2.6 percent in Hawaii similar profiles and are typically less crowded County and a low of 1.3 percent in Kauai than Oahu. Hawaii County has been the least County. volatile market. The pattern of change in crowding and doubling-up is generally the same Our housing units are smaller than are those in as other counties, but the rate of change is other American housing markets. For the State always smaller than for the other counties. and all of the Counties, the mean number of rooms per occupied residential housing unit was Hawai'i's crowding rate, as measured by national 4.9. Nationally, the average housing unit had 5.8 standards, is always among the highest For rooms in 2014. Despite Hawai'i's housing stock 2015, Hawaii was ranked first in crowding for having fewer rooms than the national average, owner-occupied units (6.4%) and second for other major housing markets in the country renter-occupied units (12.3%).8 report average room counts lower than Hawai'i's (New York, 4.2; San Francisco, 4.4; Boston, 4 5). f. Age and Condition of Units9 2. Housing Production Housing planners must take into consideration both the age and overall condition of units in the Hawai'i's housing stock, those units available to residential housing stock. As compared to other residents, was 368,122 units in 1990 and cities in the United States, Hawai'i's housing 477,520 units in 2014. That is an increase of stock is relatively young and in good condition 109,398 units (29.7%) over 25 years. That overall, suggesting that housing planning should amounted to about 4,376 units per year and an annual growth rate of 1.1 percent. ' 8 ACS 2015, Table B25014, Tenure by occupants per room, 5yr estimates. 9 United States Census Bureau (2014) ACS 5-Year ' Estimates, 2010-2014,Table S2504. Hawaii Housing Planning Study,2016 Page 9 ©SMS, Inc. December,2016 a. Housing Stock Growth, 1990-2014 demand and higher house prices by supplying J new units. The lag shown after 2000 reflects the If population rises and household formation time needed to bring units to market. That finding proceeds normally, additional housing units will is inconsistent with the often-heard claims that be needed to house Hawaii's residents. supply lags demand by substantial margins - up Housing planners typically measure housing to ten years - in Hawaii. However, those claims production first by tracking residential building usually refer to the time required to start larger permits and then measuring total units added to projects that may require land use or zoning the stock. Table 5 shows the number of building changes and would not be included in the permits approved by county planning building permit data.11 departments over the last 24 years. The present data may underestimate the lag, Table 5. Total Building Permits Issued, Counties however. Housing stock estimates (as well as and State of Hawaii, 1990-2014 numbers of added units) are in part an artifact of County State methods used to produce the Census estimates. Hawaii Honolulu Kauai Maui It appears that the U.S. Census Bureau, in 1990 4,720 17,123 2,312 3,534 27,689 developing annual housing unit estimates, uses 1995 2,707 11,956 1,054 1,514 17,231 data taken from authorized building permits. 2000 3,254 12,443 1,083 2,294 19,074 Therefore, the housing stock estimates we are 2005 5,436 15,174 882 2,348 23,840 using are defined, in part, by the permit counts. 1 2010 2,756 14,254 171 1,016 18,197 2014 4,811 18,541 187 1,267 24,806 Between 1995 and 2004, housing production in Source. State of Hewah Time Senes Data Book 2005-2014 Table Hawaii was at an all-time high and nearly 67,000 j 21 01. housing units were built throughout the State. The number of building permits approved in a Between 2005 and 2009, housing production given year is an indicator of the demand for new dropped sharply, primarily due to the Great housing units. While the annual count may be Recession. While the State's economy has ,o improved markedly since then, housing affected by a host of other considerations1° it is unlikely that building applications will be made or production remains low. In the past four years, approved without some expectation that there fewer than 20,000 housing units have been will be buyers for the units. constructed in Hawaii, despite the addition of about 50,000 new residents in about 15,000 The historical figures in Table 5 support that households. proposition. They rise and fall with the market. Large permit counts in 1990 and 2005 reflect Figure 4 combines the sources of information on boom markets. Low counts in 1995 and 2010 housing stock growth In 2014, there were 3,066j are consistent with the low demand in those residential building permits issued for new years. The 24,806 permits issued in 2014 housing units. In that same year, 2,688 housing suggest that demand has risen again. units were added to Hawaii's housing stock, which means that 88 percent of the units Authorized permits rise and fall with the local permitted were actually built. This is a vast housing market. Added units lag permits by improvement over 2008 when 4,115 permits about a year. In times of high market activity, were issued but only 1,323 housing units landowners and developers respond to higher constructed (32%). 10 These include availability of construction financing, I expectations for home mortgage financing, current 11 The data may underestimate the lag because housing zoning situations, land use issues, infrastructure stock estimates and added units are an artifact of 1 condition and financing, affordable housing methods used to produce Census estimates. Census requirements and other regulatory issues, project uses authorized building permits to estimate housing readiness, and other considerations that affect the units, so housing stock estimates are adjusted to the scheduling of permit applications. permit counts Hawaii Housing Planning Study,2016 Page 10 ©SMS,Inc December,2016 I IFigure 4. Building Permits & Added Units, State of to the development of housing in Hawaii Hawaii, 2000-2014 including the lack of "reasonably priced", 12,000 developable land; lack of major off-site Ie 10,000 infrastructure; high development costs; d \ government regulations; community opposition; a 8,000 and growing environmental requirements.13 We I C D 8,000 • • __ briefly recap the major sources of the supply o problem below. d 4,000 a jr� N" I Geographic Limitation: Hawaii lacks sufficient z 2,000 land near its major population centers. Consider 0 a fifty-mile circle around the central business I p0.�O^Q0'Oe?O0'cps)Ooh 0O1 Oc,a O^%O^^O^ry O^b O^a district of the largest cityin each of America's ti ti ti .1ti % ti .1 ti I. .i° ti i ti .1 g Year fifty states. Now subtract all open water or —Housing Units Added --Total Residential Permits wetlands within the circle and all lands with I slopes in excess of five percent (Rose, 1989). Source: Permits from Census Table 2au: New Privately As an island state, comprised of mountains rising Owned Housing Units Authorized. Added units from ACS from the ocean floor, Hawaii ranks lowest in housing unit data and Housing Model 2016 estimates. terms of the percentage of remaining available I land (Saiz, 2010). Geography becomes more b. Impediments to Production constraining over time. As an area is developed, there are ever fewer acres of undeveloped land. I We briefly recap some major barriers to housing Supply is attenuated and prices rise. (Hilber and supply below. Note that, for all of these, a Robert-Nicoud, 2010).14 Geographic constraints significant amount of research has been reported reduce housing supply by limiting investment in I in peer-reviewed journals to estimate statistically housing (Paciorek, 2011). significant correlation between the barrier and supply inelasticity and/or high housing prices. Lack of Major Off-Site Infrastructure: The I We are aware of no production barrier for which lack of major off-site infrastructure to support research exists that defines the net contribution development is cited as a major impediment to of specific elements of the barrier to its dollar or housing development. The Final Report & Iunit impact on production. Nor is there any Recommendations of the Affordable Housing research of which we are aware that defines the Advisory Committee, April 2006 notes that the mechanism by which those elements affect current infrastructure capacity is a significant housing supply inelasticity. Finally, no definitive barrier to providing more housing units in the I research has been conducted in Hawaii with urban core of Honolulu. All forms of public respect to these production barriers. To infrastructure are in dire need of maintenance, effectively address these issues would require up-grade and new installation. Roads, sewer, I considerable research that is outside the scope water, drainage, and schools have historically of the current study. been the responsibility of government to construct. Many of the required infrastructure I Hawaii's housing market is supply inelastic.12 improvements have been passed on to the An increase in demand does not lead to an developer, adding to the price of a house. A Joint increase in supply in a timely or efficient manner. Legislative Housing and Homeless Task Force I That leads to higher prices and affordability encouraged creative, innovative and cost- problems. Previous versions of the HHPS and other studies have identified major impediments 13 State of Hawaii, HHFDC, Consolidated Plan for Program Years 2015 Through 2019, May 15, 2015. I 14 Hilbert and Robert-Nicoud reported that a highly 12 A market situation in which any increase or decrease in significant independent variable in their analyses of the price of a good or service does not result in a housing prices in U.S. cities was the ratio of acres of Icorresponding increase or decrease in its supply. developed land to acres of developable land. Hawaii Housing Planning Study,2016 Page 11 ©SMS, Inc. December,2016 ib effective ways such as tax increment financing or be implemented as a way to bring order to the the establishment of improvement districts to development of cities and towns, a method of finance the construction of offsite infrastructure, protecting the people against arbitrary as well as the appropriation of capital development practices, and more recently, as a improvement project funds.15 means of providing affordable housing in the face of rising demand for luxury Construction Costs: In many markets, accommodations. There is a sufficient amount construction costs are a major part of the price of of evidence to suggest that these functions are a new house. There are large differences in still being produced by planners and regulators. construction costs across the U.S., and Hawai'i's But, as the proliferation of housing regulations construction costs are high. Rose and La Croix continues, however, some observers have had (1989), however, showed that the difference in cause to consider the extent of housing construction costs was not nearly enough to regulations to be a barrier to production, a explain the difference in housing costs across precursor of housing supply inelasticity, and a markets. Gyourko and Saiz (2006) also reported pathway to higher housing costs. construction costs were not significantly related to prices. The larger contributors to building Hawai'i's housing markets are more regulated costs were unionization, local wages, local than most other housing markets in the nation. topography, and the regulatory environment. Honolulu's score on the Wharton Residential Combined with Hawai'i's highly volatile housing Land Use Regulatory Index (Wharton Index18) is market, however, construction costs can affect the highest in the nation and David Callies individual projects. Construction costs can rise (2010) has painstakingly described the large sharply in construction boom periods and make number of individual regulations that affect tight-margin projects like workforce housing units housing development in the State. very difficult to complete.16 The cost of construction has been impacted by the high cost Government regulations and the process of of litigation and insurance. The Affordable implementing those regulations have been rli Housing Advisory Committee notes that identified as another major impediment to "everyone involved from accountant to mason housing production in Hawai'i. contractors have insurance costs that go into the price of their goods and services. They include: In August 2007, Hawaii accepted an invitation property, general liability, professional liability, from HUD to join the "National Call to Action for excess liability, unemployment, health, auto, Affordable Housing through Regulatory Reform" am workers comp, business interruption and even initiative. A statewide Affordable Housing terrorism to name a few."17 Regulatory Barriers Task Force, comprised of representatives from the counties, business, Government Regulations: Housing planning labor, developers, architects, non-profit service and regulation came into being and continue to providers, the state, and the legislature, was convened to address regulatory barriers to 15 Joint Legislative Housing and Homeless Task Force, affordable housing. The task force noted that "in W prepared by staff of the Senate Majority Office,with the context of building homes that are affordable, contributions from the House Majority Staff Office, government regulations often work against the "Report of the Joint Legislative Housing and Homeless goal of delivering more affordable housing. Task Force Pursuant to Act 196, Session Laws of Although government policies and regulations Hawaii 2005,"January 2006 are often intended to control or direct growth, 16Massive 'Aiea workforce housing condo project on hold target resources, and prioritize areas of (2016), Hawai'i News Now, June 2016. Download at importance, the unintended consequence is http://www.k5thehomteam com/story/32389776/massive often that these regulations add to the cost of -aiea-workforce-housing-condo-project-on-hold. 17 Mayor's Advisory Housing Advisory Committee, City and County of Honolulu, Final Report & 18 Gyourko, Saiz, and Summers, 2007. Index scores were Recommendations, April 2006 not calculated for other counties in Hawai'i. ' Hewai'!Housing Planning Study,2016 Page 12 ©SMS,Inc. December,2016 1 L building affordable homes. Many regulations are B. HOUSING DEMAND IN HAWAII in place to ensure health and safety and to protect natural resources. However, all 1. Historic Demand regulation has some direct or indirect effect on the supply and cost of housing.19 The task force identified fourteen regulatory barriers including a. Population and Growth Rates the duplicative and lengthy land use entitlement process, lack of consistency and synergy in state Demand for housing units begins with population and county agency reviews, impact fees and growth. Population grows when natural increase exactions, fiscal policy, and administrative (the excess of births over deaths) and net in- processes. migration combine and when new households are formed from older ones. When the number Hawai'i's land use system has not changed of households grows, new housing units are much since it was enacted over 50 years required to house them.21 ago. There is a shared sense that the State has an important role to play in land use in Hawaii Table 6 shows population change since 1990. and that the current land use review process During the nineties, Hawai'i's population growth offers a check on development. There are, rate of 8.8 percent was lower than in the however, deficiencies and system-wide previous decade. Between 2000 and 2010 weaknesses in how land use is managed. "In population growth increased, led principally by 2014, the State Office of Planning (OP), initiated net in-migration, to 10.1 percent for the decade, a review of the State's land use system in about one percent per year. response to concerns expressed over the years about the State Land Use District Boundary In the last five years, population growth has been Amendment process in Hawaii Revised Statutes 7.4 percent or approximately 1.5 percent per Chapter 205 and the State land use system as a year. It appears that the rate of growth is whole." OP's efforts in this review culminated accelerating slightly as the decade proceeds, with the preparation of the State Land Use and that the major component of change is still System Review Draft Report, which explores net in-migration. different ways to increase the effectiveness of the land use system without compromising the Population growth is consistent with economic original intent of the Land Use Law."20 Public recovery. In the process of household formation, comments on the draft report reflected a broad population growth is translated into household range of perspectives and preferences about the growth and then to increased housing demand. structure of the land use system. Following consultation with the Land Use Commission, OP Table 6 also shows that population growth has determined that additional research and data taken very different paths for each county. For gathering was needed to validate issues raised the County of Hawaii, the period from 1990 to in the draft report. 2000 evidenced significant growth of roughly 2.2 percent per year. Similar levels of population growth occurred in the following decade. ' Population growth has slowed significantly in the present decade, to 8.9 percent in the first five years. That is still over 1.7 percent per year and higher than the State as a whole. 19 State of Hawaii , Office of Governor Linda Lingle, 21 Standard demographic texts cover the topic in detail "Report of the Governor's Affordable Housing Imhoff et al. (see Appendix H) cover the impact on Regulatory Barriers Task Force," December 2008 housing modeling.The Hawaii Department of Business, 2° Office of Planning, State land use system review, Economic Development and Tourism reports figures on http://planning.hawau qov/state-land-use-system-review, the components of population growth See Hawaii Data ' paragraph 1. Book, annual. Hawaii Housing Planning Study,2016 Page 13 ©SMS, Inc. December,2016 t I Table 6. Total Population, 1990-2015 of population growth in Hawaii, is steadily 3 County becoming more important. Year Hawai'i Honolulu Kauai Maui State 1990 121,572 838,534 51,676 101,709 1,113,491 For the State as a whole, the out-migration 3 1992 131,630 863,959 54,439 108,585 1,158,613 exceeded in-migration and reduced the 1997 144,445 886,711 57,712 122,772 1,211,640 1999 146,970 878,906 58,264 126,160 1,210,300 population by almost a thousand persons per 2000 149,095 875,061 58,511 128,899 1,211,566 year during the nineties. In the decade between j 2003 156,340 888,026 60,061 134,871 1,239,298 2000 and 2010, in-migration was much higher 2004 160,170 894,406 61,070 137,136 1,252,782 than out-migration causing population growth in 2005 164,887 900,340 62,759 138,131 1,266,117 excess of 5,500 persons per year. So far this 2006 169,205 898,074 62,509 138,983 1,268,771 2007 169,082 904,783 62,162 140,507 1,276,534 decade the excess of in-migrants has produced 2008 172,464 903,231 62,800 141,778 1,280,273 a net 6,200 persons per year. 2009 172,370 902,564 63,033 142,274 1,280,241 2010 180,362 936,984 65,490 150,785 1,333,591 The steady gain in net migration over naturalJ 2011 182,997 944,287 66,306 152,964 1,346,554 increase at the State level is almost solely due to 2012 185,399 955,215 67,113 155,003 1,362,730 the components of change analysis for the City 2013 187,044 964,678 67,872 156,704 1,376,298 and County of Honolulu. Other counties do not 2014 189,382 975,690 68,745 158,887 1,392,704di 2015 196,428 998,714 71,735 164,726 1,431,603 exhibit the same pattern of growth. Honolulu lost %Chg.1990-2000 22 64% 4 36% 13 23% 26 73% 8.81% almost 47,000 people to net out-migration in the %Chg.2000-2010 20 97% 7.08% 11 93% 16.98% 10 07% nineties. Between 2000 and 2010, Honolulu's net I %Chg.2010-2015 8 91% 6 59% 9 54% 9 25% 7 35% migration accounted for 11 percent of total Sources: 1990 Census, 2000 Census, ACS 2003-2014; population growth. So far in this decade, 33 PEPANNRES 2015 percent of the increase in Honolulu's population J is due to the excess of in-migration. b. Components of Population Growth Going beyond the simple growth patterns of the J last twenty years in Hawai'i provides information that is relevant to housing analysis and planning. summarizes growth factors since 1990. il Net change in Hawaii's population is the population in the final year of a decade minus the population in the final year of the previous decade. Net migration is the number of people moving to the State minus the number of people moving out of the State. Natural increase is births minus deaths. Hawaii's population grew faster in the last i decade than it did in the nineties. The State added an average of about 10,000 persons per 1 year in the nineties, 15,000 per year in the last decade, and about 6,000 per year since 2010. In each decade since the nineties, natural I increase contributed more to the population growth than did net migration. In each decade, however, the difference was smaller. That is, net I migration, while still the lesser of the two sources Hawaii HousingPlanningStudy,2016 Page 14 I Y 0 SMS,Inc December,2016 I I Table 7. Components of Population Change, increase in average household size. In the last Hawaii, 1990-2014 ten years, Hawaii's statewide average household size increased by 2.8 percent from INet Natural Net 2.88 persons per household to 3.11. Change Increase Migration 1990 to 2000 Table 8 presents the number of households for I Hawaii 28,360 10,477 17,883 the State and counties since 1990, along with the DBEDT forecast to 2040. Honolulu 39,925 86,733 -46,808 1 I Kauai 7,286 4,601 2,685 Table 8. Number of Households, 1990-2040 Maui 27,737 11,301 16,436 County State 103,308 113,112 -9,804 Hawaii Honolulu Kaua'i Maui State I2000 to 2010 1990 41,461 265,304 16,253 33,145 356,163 Hawaii 36,402 9,914 26,488 1995 49,282 275,877 18,967 38,326 382,452 Honolulu 77,051 68,958 8,093 2000 52,985 286,450 20,370 43,507 403,312 I Kaua`i 8,628 3,517 5,111 2005 60,396 300,557 21,997 48,393 431,343 Maui 26,683 10,729 15,954 2010 67,096 304,827 23,240 51,281 446,444 I State 148,764 93,118 55,646 2015 70,668 311,136 24,569 54,437 460,811 2010 to 2014 2020 77,902 316,706 25,902 58,635 479,144 Hawai`i 8,973 3,723 5,250 2025 84,228 320,808 27,307 62,833 495,176 I Honolulu 39,631 26,529 13,102 2030 90,554 323,442 28,788 67,031 509,815 Kaua`i 3,404 1,279 2,125 2035 96,304 324,608 30,349 71,229 522,491 I Maui 8,249 3,815 4,434 2040 102,008 324,307 32,056 75,428 522,798 State 60,257 35,346 24,911 Source: Decennial Census 1990, 2000; ACS 1-year estimates 2005,ACS 5-year estimates 2010, DBEDT 2040 Projections 2015- Source: DBEDT Data Book, 2009, Table 1.59, 2010, Table 2040 I 1.56,and 2014,Table 1.59. In Table 9, we see all three of the population This kind of growth pattern tends to increase growth factors related to housing demand: total I demand at the lower end of the market. Many population, households, and household size. immigrants from the Pacific, for instance, have Ideally, if there were a simple 5 percent change fewer economic resources, less education, and in population, we would expect a 5 percent Ifewer job skills than the current population. It change in households, and a zero percent takes time for them to gain the economic footing change in average household size. If supply required to compete in Hawaii's housing market. were running ahead of demand, we would get a I c. Households and Household Size 5 percent increase in households, or perhaps even greater as pent-up demand is relieved. That would result in a zero or even a negative I We generally measure household formation in change in average household size. But if terms of the increase in households reported by demand runs ahead of supply, then a 5 percent the U.S. Census. Assuming a constant growth in population will produce less than five household size, the number of households percent growth in households (as pent-up I should increase at a rate similar to that of the demand increases and household formation is total population. Slower household formation delayed), and positive growth in average may be due to social change, economic household size. I recession, or a shortage of new housing units. Some would-be movers will remain housed within existing households. This will result in an I Hawaii Housing Planning Study,2016 _ Page 15 ©SMS, Inc. December,2016 O Table 9. Population Change by County, 2005-2015 those reported in 2010, suggesting that average %Change between 2005 and 2015 household sizes were increasing very slightly. Total Number Average This would not be unusual in a housing market Population of HH HH Size marked by low supply elasticity. Hawaii +19.1 +17.0 +0.3 Table 11.Average Household Size, 1990-2015 . ' Honolulu +10.9 +3 5 +8.8 11 m County o o Kauai +14.3 +11.7 +2.3 Hawaii Honolulu Kaua`i Maui State Maui +19 3 +12.5 +5.8 1990 2.86 3.02 3.09 2.99 3.01 3 State +131 +6.8 +7.9 2000 2.75 2.95 2.87 2.91 2.92 Source:Calculated from Table 6 and Table 8. 2005 2.77 2.91 2.85 2.86 2.88 Data for all four counties were consistent with a 2010 2.70 2.95 2.84 2.82 2.89 I housing market where demand was greater than 2014 2.88 3.03 3.03 2.94 3.00 supply. The situation in Hawaii County was 2015 2.78 3.21 2.92 3.03 3.11 I much closer to the preferred circumstances than Sources: U.S Decennial Census, 1990, 2000, 2010, ACS was found in the other counties: population 2005 (1-yr Estimate), 2014 (5-yr Estimate), PEPANNRES, growth and household formation grew at nearly 2015, DBEDT 2040 Projections the same rate, and average household size grew I by only one third of one percent. 2. Demand for Residential Property by The State's population growth was relatively Persons Living Out-of-State slow during the nineties and increased a bit The above data demonstrate that consistent during the last decade, largely in response to growth in the size of Hawaii's resident economic growth. The average household size population increases demand on the residential fell off a bit by 2003 and even more by 2006. It housing stock. Though most of the demand for then resumed faster growth, but did not quite residential real estate in Hawaii originates from reach the level seen in the years before 2000 the local population, Hawai'i's housing market is until the present. In 2015, the average also affected by demand from non-residents. household size for the State is 3.11 persons. This is a notable increase over the 2014 average Hawaii has a list of qualities that drive non- household size of 3.00. resident demand for our housing units. We have Table 10.Total Household Growth, 1990-2015 a temperate climate, beautiful beaches, and abundant opportunity for outdoor activities and j County entertainment. Chronic health conditions are less Hawaii Honolulu Kauai Maui State prevalent than the national average, wages are 1990-2000 27 8% 8.0% 25.3% 31 3% 13 2% higher, household incomes are higher than in other states, and our social welfare programs are 2000-2005 14.0% 4.9% 8 0% 11.2% 7.0% at least perceived as being more available. Hawaii's unique and welcoming culture is 2005-2010 11.1% 1 4% 5.7% 6.0% 3 5% attractive to many people who wish to vacation1 or have a second home in the islands. 2010-2015 5 3% 2.1% 5.7% 6.2% 3 2% Recent research by DBEDT combined with Source: Calculated from Table 8 tabulation of County Tax Map Key records and Average household size decreased slowly from Housing Demand Survey data point toward high 1990 through 2005 and between 2007 and 2009, rates of out-of-state ownership for residential depending on the county (Table 11). Census property in Hawaii. numbers reported for 2014 were higher than Hawaii Housing Planning Study,2016 Page 16 1 ©SMS,Inc December,2016 III IIDBEDT's 2015 study of home sales trends show a. External Demand and Vacancy Rates that more than one-quarter of residential units sold between 2008 and 2015 were purchased by Many units sold to out-of-state buyers were persons or agencies with out-of-state addresses. either second homes or timeshare units. They E The counties have been disproportionally made up the bulk of units in what the Census impacted by out-of-state sales in the last 8 years: calls vacant, held for seasonal, recreational or L 43 percent of Hawaii County's sales were made occasional use. We will call them "seasonal" to non-residents whereas only 15 percent of units. These units are removed from the Honolulu's housing unit sales were made to residential housing stock and are not available to L persons living outside the State. residents in need of a housing unit. Table 12. Out-of-State Sales, 2008 -2015 Figure 5.Vacant Units Held for Seasonal or Total In-State Out of State Occasional Use, by County, 2000-2015 L 16,000 Units Units Pct. Units Pct. y sold N 14 ,000 L A Hawaii 27,041 15,444 57 1% 11,597 42.9% V 12,000 5 Honolulu 88,756 75,202 84 7% 13,554 15.3% o r.,, L . Kauai 7,221 3,956 54 8% 3,265 45.2% D ° 18,000 Maui 21,364 10,325 48 3% 11,039 51.7% g°o $"000 N To State 144,382 104,927 72.7% 39,455 27.3% = N 6,000 L Source: DBEDT 2015 Residential Home Sales in Hawaii:Trends o 4 000 and Characteristics v L xi 2 E 2,000 Most out-of-state buyers (85.4%) were Mainland Z 6 residents. The other 14.6 percent were o international buyers. The purchase prices of 20002002 2004 2006 2008 2010 2012 2014 units bought by international buyers were, on —Hawaii Honolulu -Kauai Maui Laverage, 64.6 percent higher than prices paid by local buyers and 28.3 percent higher than prices Source Census 2000;ACS 1-yr estimates 2005-2006;ACS 3-yr estimates 2007-2008,ACS 5-yr.estimates 2009-2014 of units sold to mainland buyers. Other data L suggest that the larger share of the out-of-state buyers (64%) purchased multi-family units. Hawaii County saw the highest growth rate in seasonal units. Their 11,008 vacant, held for II Though there is variability across sources with occasional use units represent about 13.1 regard to the estimated number of units owned percent of the county's total housing units. by non-residents22, all sources indicate that In all, 6.3 percent of Hawai'i's housing units were II demand from out-of-state owners has always non-primary residences in 2014. By comparison, been significant and contributes to high housing the national average is about 2 percent. These prices in Hawaii. figures suggest that external demand for housing E units by non-residents creates a substantial set 22 of housing units that are not available as part of The HHPS estimate was calculated as the number of the residential housing stock. The loss of those residential properties owned by persons whose tax bills L are mailed to an address outside the state divided by units from the residential stock decreases the the total number of properties in the county tax records elasticity with which supply can accommodate DBEDT's estimate is based on the set of title searches changes In demand. conducted by Title Guarantee of Hawaii between 2008 and 2015. It was calculated as the number of residential properties sold to buyers with a pre-sale address outside of Hawaii, divided by the total number of titles L registered during that period. Hawai'i Housing Planning Study,2016 Page 17 ©SMS, Inc. December,2016 b. Impact of Out-of-State Sales on Needed Changes in demand are grounded in population Residential Units growth, household formation, changes in the .no number of families, and income distributions. External demand is an important consideration in Most of these items are accessible in published estimating total demand and for planning to data sources. The details of housing demand address the State's housing needs. The fact that require deeper investigation, however, and that 28 percent of all housing units were sold to out- has been the purpose of Housing Demand of-state buyers will surely attract the attention of Surveys since 1992. All of these and other ___ developers and property owners. factors are covered in this section of the report. Building, maintaining, and operating units held 3. Survey Demand Estimates for non-resident use contributes to Hawai`I's economy. It provides jobs and wages, revenue One objective of HHPS is to estimate demand to local businesses, and it contributes to the tax for housing units over the next five to ten years, r� base. However, building units to serve external and to use those forecasts to develop a number demand competes with the development of units and description of needed units for the State. for residential use as it increases the cost of HHPS has always included a housing demand land, labor, and construction materials. The net survey to improve demand estimates and result of the resource absorption by the out-of- provide details on would-be buyers and renters, state housing market is lower availability and their financial situations, and unit preferences. higher costs of housing units for local residents. Data collected in the Housing Demand Survey Vacant units are essential to a viable housing were used to produce demand in three steps, estimating raw, effective, and qualified demand. market as they create "swap space". Swap ..os space allows a household to transition to a new home without requiring another housing unit to a. Raw Demand become vacant at the same time. A market ,.,or without swap space would quickly experience Households were first asked when they would gridlock and cease to function. Every market make their next move to a new housing unit. needs an adequate number of vacant housing Some said they would never move from their units in the residential housing supply. current units. They had found the place they wanted to live in and they would stay there for Housing planners are aware that units designed the rest of their lives. Another group said they to be held for seasonal use have been built and might move, but had no particular plans to go mos will continue to be built in Hawaii at rates higher anywhere very soon. The rest said they would than other states, and that none of these units move and they would move sometime in the next can be expected to serve the housing needs of ten years. This group of households with plans to • o Hawaii's residents. As a result, the significant move in the near future were classified as impact of out-of-state sales must be carefully "movers" and provided our survey estimate of considered in estimating needed housing units, raw demand. By convention, raw demand is both ,.. and in framing housing planning discussions. the number of households that will move and the number of housing units they will need. mom rwr Hawai'i Housing Planning Study,2016 Page 18 ©SMS,Inc. December,2016 mil IP` L Table 13. HHPS Demand Survey Demand Estimates, by County, 2016 County Honolulu Maui Hawaii Kaua`i State Number Pct Number Pct. Number Pct. Number Pct Number Pct. Total Households 317,459 100.0% 55,059 100 0% 66,989 100.0% 23,369 100.0% 462,876 100 0% Will not move 127,082 40.0% 26,275 47 7% 33,653 50.2% 13,014 55.7% 200,024 43 2% Raw Demand 190,377 60 0% 28,784 52.3% 33,336 49.8% 10,355 44.3% 262,852 56.8% Move out of state 49,421 26.0% 6,340 22.0% 7,867 23 6% 1,754 16.9% 65,382 24.9% Will move, no plan 38,010 20.0% 4,875 16 9% 5,267 15.8% 2,156 20.8% 50,307 19.1% Effective Demand 102,946 54.1% 17,569 61.0% 20,202 60.6% 6,445 62.2% 147,163 56.0% Source' Housing Demand Survey,2016 Raw demand is households that plan to move "Will move out of state"is the number of households whose first location choice was out-of-state. "Will move, no plan" is the number of households who were unsure or refused to report when they expected to move. Out-of-state and no plan households are excluded from effective demand. In 2016, raw demand was 57 percent statewide, previous demand surveys. It differed slightly up from 40 percent in 2011. At 60 percent of all from one county to another (Hawaii and Kauai: households, the City and County of Honolulu had 38%, Honolulu: 29.4%, Maui: 31%). the highest raw demand. Other counties had similar levelso of raw demand (Maui: 52.3%, Reasons for Not Buying Hawaii: 49.8%, Kauai: 44.3%). For all movers (56%) to realized their expectation and move to a new housing unit, would result in 262,852 real We asked the 2016 Housing Demand Survey estate transactions -- the number of units that respondents who were interested in moving to a why home, but not interested in buying, would change hands during the period. the Y would not buy. Sixty-four percent of them told us that home prices were too high, or that it was too Reasons for Leaving the State expensive to buy right now (Table 14). The Demand Survey also asked respondents if Twenty-eight percent said they could not afford they would move out of the State on their next the down payment; 14 percent said they could move. About 22 percent of them said they would not afford the monthly payment; and 12 percent move out of state. That was lower than the 24 said they could not qualify for a mortgage loan. percent reported in 2011, but higher than the 18 percent reported in both 2006 and 2003 Less than ten percent (9.2%) said they preferred (Appendix Table A-13). to rent right now. Some of those were not going to be in Hawaii for a long time and they did not The Demand Survey also asked those who want to be tied down to any one place. Others wanted to move out of State why they were were not ready for the kind of commitment that leaving. Thirty-one percent of them said housing home ownership requires. was one of the problems causing them to move. That was slightly higher than the 30 percent reported in 2011 and higher than in any of our I I ' Hawai'i Housing Planning Study,2016 Page 19 ©SMS, Inc. December, 2016 I 1 Table 14. Top Six Reasons for Not Buying a Home, 2016 1 County Hawai`i Honolulu Kauai Maui State Too Expensive 47 5% 65.8% 73.1% 66.1% 64 1% Cannot Afford Down Payment 23.0% 30.8% 12.0% 23.0% 28.0% Cannot Afford Monthly Payment 14.8% 15.4% 8.2% 9.7% 14.3% Cannot Qualify For Loan 8.6% 12.6% 4.7% 13.2% 11.9% Do Not Want To Buy, Prefer To Rent 10.2% 10.1% 6.5% 4.4% 9.2% el Other 19.6% 15.0% 21.6% 19.6% 17.6% Source: Housing Demand Survey,2016 In 2016, fewer people wanted to move away Across the State, effective demand fell in each from Hawaii. Fewer were moving because of Housing Demand Study year from 1992 (48.4%) housing issues, and fewer were not buying through 2011 (30.3%). In 2016, statewide because of a lack of confidence in Hawaii's real effective demand jumped to 42.6 percent, nearly estate markets. There were still many families reaching the level observed in the late 1990s. moving out of Hawaii because they could not The long-term trend, marked by slower market afford to buy a home, and Table 14 suggests activity, turned upward in 2015. The 20-year low 111 that a high priced market forced prospective measured in 2011 occurred during a housing homeowners into rental units. But, perhaps, the market with very high prices and low inventories. end of the Great Recession has brought at least Such market conditions do not favor buyers. The a modicum of confidence to the market. increase in effective demand that we see in 2016 occurs at a time when home prices are high and b. Effective Demand inventories are low following an 8-year period of il low market activity. The situation suggests a A household that leaves Hawaii will not increase build-up of pent-up demand. These conditions demand for Hawaii housing units. They were might be expected to result in more people being 01 excluded from current demand. The estimate of interested in moving. effective demand included only respondents who would move within the State. Movers, defined as Historically, effective demand estimates for the residents who met the criteria for inclusion in the counties have been similar over time. Honoluluil effective demand estimate, were expected to County's effective demand has generally been generate market activity (buying, selling, or both) highest among the counties. Among the in the next several years. As such, the estimate Neighbor Island counties, effective demand has j of effective demand is the number of units likely been highest in Maui County and lower in to be affected as these movers enter the market. Hawaii and Kauai Counties. Table 15. Effective Demand for Next Five Years by County, 1992, 1997, 2003, 2006, 2011, and 2016 c. Qualified Demand Effective Demand Percent of households intending to move to a Qualified demand narrows the demand estimate ii housing unit in Hawaii in the next five tears , further by considering only effective demand 1992 1997 2003 2006 2011 2016 households that are financially prepared to Hawai'i 40.2 34.3 33.8 36.3 26.0 38 7 pursue their preferred tenancy and unit type. .1 Honolulu 51.7 47.3 38 9 33 2 31.3 44 9 This step eliminates households that do not have �j Maui 38 8 41 4 35 7 39 6 31 3 38.7 the financial qualifications to purchase or rent housing units in the current economy. Kaua`i 38 5 34 2 31 4 30 6 27 3 31 2 State 48 4 44 4 37 5 34.2 30.3 42.6 Based on this analysis, we estimate that 42 Source: Housing Demand Survey, 1997,2003,2006,2011,2016 percent of effective demand households are Hawaii Housing Planning Study,2016 Page 20 I ©SMS, Inc December,2016 I 6 financially prepared to acquire a different following an all-time low of 42 percent in 2011. residence. This is notably higher than in 2011, The shift away from homeownership in 2011 was (30%), 2006 (34%), and 2003 (38%). likely a reaction to the economic climate, I I difficulties obtaining financing, and delays for Differences exist between prospective buyers homeowners who had to a current unit to and renters with regard to their financial purchase a new one. It should be noted that a I I preparedness for a new home. Statewide, only preference for ownership does not always about 7 percent of households that plan to buy a translate into reality in the marketplace. About single-family unit were financially able23 to do so. 15 percent of survey respondents statewide who I I said they planned to purchase their next home Table 16. Qualified Demand for All Unit Types by conceded that they were not sure they would be County, 1992, 1997, 2003, 2006, 2011, and 2016 able to afford it and may have to continue 110 countyrenting. Hawaii Honolulu Maui Kauai State 1992 40.2% 51 7% 38.8% 38.5% 48 4% a. Households Planning to Buy II 1997 34.3% 47.3% 41.4% 34.2% 44.4% 2003 33.8% 38.9% 35.7% 31.4% 37.5% To evaluate financial readiness of households 2006 36.3% 33.2% 39.6% 30.6% 34.2% wishing to buy a housing unit in Hawaii in the lie � 2011 26 0% 31.3% 31.3% 27.3% 30.3% next five years, we examined their income, 2016 36.9% 44.0% 39.7% 35.1% 42.1% affordable monthly housing payment, and total Source: Housing Demand Survey, 1992, 1997, 2003, 2006, amount available for a down payment. These 2011,and 2016 elements were evaluated against a median eP Ills or Less than a fifth (19%) of households who priced home assuming a fixed rate, thirty year wanted a multi-family unit were financially loan, a four percent interest rate, and a twenty N' prepared to pursue their preferred housing. percent down payment. The results are outlined Finally, among households that expect to rent in Tables 17 and 18. As their next residence, 24 percent are financially able to make the median monthly rent payments Statewide, 18 percent of prospective buyer without allotting more than 30 percent of their households planning to purchase a single-family household income to cover that expense. home indicated they could afford to make the monthly mortgage payments. Twenty-six percent Iof these households reported that they had 4. Housing Preferences (Buyers & Renters) sufficient funds to make a twenty percent down payment. When both of these financial As in the past, buyer and renter preferences for qualifications were applied, 7 percent of housing unit characteristics were measured in households would be considered fully qualified.24 2016 The objective was to provide information on preferences to support a broad range of The situation among prospective buyers varies housing issue analyses over the next few years. by county. Prospective buyer households In this section of the report, we will briefly planning to purchase a single-family unit in describe the most salient of those preferences. Hawaii County were more likely to be able to Iafford the monthly payments but not have lir Forty-seven percent of households that planned adequate funds to put toward the down payment. to move said they would buy their next unit. Further, only 13 percent of intended buyers were i!!, Plans for home ownership were on the upswing, fully qualified to purchase their next home. r 23 Have sufficient funds for the down payment AND are able 1 e to make the monthly mortgage payment without allotting 24 Fully qualified households were able to afford the more than 30 percent of their household income to the monthly mortgage payments AND had sufficient funds housing payment. to make the 20 percent down payment. Id Hawaii Housing Planning Study,2016 Page 21 ©SMS, Inc December,2016 II The same set of financial qualification measures half times the percentage of households fully was applied to potential homebuyers who sought qualified to purchase a single-family home. to purchase a multi-family unit rather than a single-family home. Using the current median This analysis does not consider the impact of sales price for condominiums in each county, the maintenance fees attached to many multifamily financial readiness of these households was units. Maintenance and other fees can add as determined. As shown in Table 18, Hawaii much as $100 to $200 to monthly shelter residents planning to purchase a multi-family payments, seriously reducing the number of rather than a single-family unit are somewhat households who might qualify for purchase. more likely to be financially able to do so. 11 Because the results suggest that multi- Because the median price, and therefore the family ownership units may be an attractive monthly mortgage and down payment required, alternative for those households that wish to is lower for multi-family units, a significantly purchase their next home but cannot meet the greater percentage of Hawaii households would financial obligations that accompany a single- be able to make the monthly payments for a family unit. When households with a preference t, condominium than for a single-family unit. For for a single family home were asked if they the State, 48 percent of potential multi-family would consider a multi-family unit if a single- home buyers could afford to make the monthly family unit in their price range was not available, housing payment. Twenty-seven percent of more than half (54%) of prospective home these households have enough money for the buyers indicated that they would consider that down payment. After both criteria are applied, option. Those households willing to accept a 19 percent of households across the State multi-family unit were almost equally divided planning to purchase a multi-family unit would be between current homeowners (47%) and current Nub fully qualified to do so. This is roughly one-and-a renters trying to transition to home ownership (53%). ,I Table 17. Financial Qualification to Purchase a Single Family Home, Counties & State, 2016 Honolulu Maui Hawai'i Kaua'i State 11Median Sales Price $760,000 $607,000 $363,000 $581,000 $623,000 Down Payment Required $152,000 $121,400 $72,600 $116,200 $124,600 Monthly Mortgage Payment $3,628 $2,898 $1,733 $2,774 $2,974 Total Effective Demand Buyers 23,116 5,009 6,084 1,679 35,888 Can Afford Monthly Payment 11.5% 25.9% 34.4% 10.6% 17.8% Have Adequate Down Payment 26.5% 23 3% 24.3% 18.6% 25.9% �' Fully Qualified 4.5% 9.3% 12.7% 13.1% 7.1% Source. Median prices from Honolulu Board of Realtors(June 2016)and Zillow(May 2016). Housing Demand Survey,2016 Base is effective demand households that plan to purchase a SFD unit. Table 18. Financial Qualification to Purchase a Multi-Family Unit, Counties& State of Hawai`i, 2016 „ Honolulu Maui Hawai'i Kaua'i State Median Sales Price $405,000 $370,000 $330,000 $377,000 $386,000 Down Payment Required $81,000 $74,000 $66,000 $75,400 $77,200 Monthly Mortgage Payment $1,934 $1,766 $1,576 $1,799 $1,843 Total Effective Demand Buyers 10,473 664 391 80 11,608 Can Afford Monthly Payment 49.3% 50.9% 70.1% 70.0% 48.2% Have Adequate Down Payment 29.2% 23.0% 9.2% 76 3% 27.1% Fully Qualified 18.7% 20.9% 9.2% 56.3% 18.9% 11Source. Median prices from Honolulu Board of Realtors(June 2016)and Zillow(May 2016). Housing Demand Survey,2016. Base is effective demand households that plan to purchase a MFD unit. Hawaii Housing Planning Study,2016 Page 22 ©SMS,Inc. December,2016 I Ib. Households Planning equalhigher Rent to or hi her than the median rent amount. For 24 percent of prospective multi-family unit I Over three-quarters of the households planning renters, it would require less than 30 percent of to rent their next home cited financial reasons for their household income each month. their decision, including inability to afford a down I payment or monthly payment and that Just over one-fifth of prospective renters in purchasing a home in Hawai'i is just "too Hawaii County who desire to rent a multi-family expensive". These households were also asked unit earn enough to make the median monthly I if they would opt to purchase a home now rent payment comfortably. instead of renting if there was a unit available they could afford. Over 75 percent responded The remaining 46 percent of households I affirmatively. (21,282) planning to rent their next residence in Hawai'I would prefer a single-family dwelling. The financial qualification of Hawaii households Statewide, a greater number of those planning to Iplanning to rent their next home was evaluated rent a house indicated they could afford higher using the current average monthly rent rate for monthly rent payments than was supported by single family homes and multi-family units in the either their current rent payments or their annual State of Hawai'i and each county. Household income. I income, current monthly shelter payment, and affordable monthly rent amount were examined Thirty-seven percent reported that the median to determine the financial readiness of Hawaii's monthly rent payment or higher would be within I prospective renters. their budget. Only 28 percent were currently making shelter payments at or above that level. Among the approximately 50,000 households Further, annual household income figures I across the State that intend to rent their next suggested that less than one-quarter (24%) are home, 54 percent plan to rent an apartment or capable of making the median rent payment for a other multi-family unit. Among these households, single-family home without spending more than I 29 percent indicated that making the average 30 percent of their monthly household income for monthly rent payment would not be a problem. shelter. In addition, over 30 percent of these households I are currently making monthly rent payments Table 19. Financial Qualification to Rent a Multi-Family Unit, Counties and State of Hawaii, 2016 IHonolulu Maui Hawaii Kauai State Median Monthly Rent Amount $2,279 $1,922 $1,718 $1,877 $1,574 Security Deposit + 1st Mo. Rent $4,558 $3,844 $3,436 $3,754 $3,148 ITotal Effective Demand Renters 23,568 2,516 2,016 717 28,818 Affordable Rent Same or Higher 11 5% 16.8% 15.1% 14.8% 28.9% Current Rent Same or Higher 13 4% 19.3% 13.1% 12.9% 30.6% I Income-Based Qualification 10.5% 7 1% 21.2% 24.6% 24.4% Source: Median rents from RentRange®(Feb 2016)for all unit sizes. Qualified renters from HHPS 2016. Base is households that plan to rent their next MFD unit in the State of Hawaii. I *Self-reported affordable rent amount. I IIHawai'i Housing Planning Study,2016 Page age 2 3 ©SMS, Inc. December,2016 Ili Table 20. Financial Qualification to Rent a Single Family Unit, Counties and State of Hawaii, 2016 illi Honolulu Maui Hawaii Kaua'i State Median Monthly Rent Amount $2,657 $2,090 $1,431 $1,930 $2,084 Security Deposit + 1st Mo. Rent $5,314 $4,180 $2,862 $3,860 $4,168 j Total Effective Demand Renters 12,026 3,792 3,845 1,618 21,282 Affordable Rent' Same or Higher 23 7% 22.9% 38.2% 29.6% 36.5% Current Rent Same or Higher 27 2% 26.1% 27 0% 17.9% 28.0% 1 Income-Based Qualification 23.0% 10.7% 29 2% 15.1% 23.7% Source Median rents from RentRange®(Feb 2016)for all unit sizes. Qualified renters from HHPS 2016. Base is households that plan to rent their next SFD unit in the State of Hawai'i. Self-reported affordable rent amount. 5. Housing Preferences percent preferred an apartment or condominium, iiiand another seven percent chose a townhouse. Preference for single-fa mjiy hnmw once a. For Owned Units wain m ch hi•h- •• k -•• I** Islands, On O`ahu, renters were more interested in j Once again, most potential buyers statewide townhomes. (68%) preferred single-family detached homes. Single-family units are more important to buyers Across the State, renters first choice would be in Hawai'i (85%), Kaua`i (84%), and Maui larger units with two (43%) or three bedrooms 3 Counties (83%) than in Honolulu (61%). The (31%). Nearly all of the potential renters, County of Hawaii, with the lowest percentage of however, were willing to take units with fewer condominium units in the State, also showed the than three bedrooms, if necessary (83%). Again, til lowest preference for condominium units (5%). these figures suggest a willingness to accept smaller units than in the past. The number of About 40 percent of potential buyers said they bathrooms required was also relatively low, with al would be looking for at least a two-bedroom unit 69 percent reporting that they could accept one and 29 percent said they would need at least or one-and-a-half baths. three bedrooms. The willingness to settle for3 fewer bedrooms was higher than in the past, About 41 percent of potential renters said they perhaps reflecting their readiness to compromise would need less than 1,000 square feet of space on unit size in the face of high prices. The same in their next unit. An almost equal number of was true for the preferred number of bathrooms. renters reported a need for between 1,000 andII Half of buyers conceded that they would be 1,500 square feet (39%). willing to accept a unit with only one or one-and- a-half bathrooms Sixty-five percent of households that plan to rent their next unit indicated that they would like to Asked about the smallest unit they would accept, purchase a home in the future. Their reasons for nearly half of would-be buyers (46%) said they not doing so now most often included the high could live with 800 to 1,200 square feet. An cost of housing and insufficient funds for a down additional 16 percent said they could accept payment. On average, these households plan to units between 1,200 and 1,500 square feet buy a unit in about eight years. b. For Rented Units C. HOUSING PRICES j Households that planned to rent their next home The primary determinants of housing prices are were mostly current renters (87%). Among housing demand and housing supply. As I those who would rent their next unit, 43 percent preferred to rent a single-family house. About 47 demand increases, prices rise. If new units are supplied to the market, prices fall. As prices rise, Hawaii HousingPlanningStudy,2016 Page 24 I Y ©SMS,Inc. December,2016 I Iunits are supplied and demand decreases and and supply model.28 Gyourko, Mayer, and Sinai prices fall. As prices fall, supply falls off and (2013) advanced the argument that the standard demand increases. If demand and supply demand model may not hold for high-priced t continually work in this fashion, the price of housing markets. In those markets, a sharp housing will reach equilibrium. change in housing demand can speed up price growth rates and change the composition of local II1. Sales Prices populations. This simple model of price behavior doesn't work Gyourko et al. found that these so-called 1E the same way in every housing market. During "Superstar" cities had 60 percent higher house the first half of the last decade, a number of prices than other cities. They also had average researchers noticed that house prices in certain incomes that were 24 percent higher and 3.4 I regions had begun to exceed the cost of percent more high-income households than production by significant margins. Glaeser and other cities. Superstar home prices were Gyourko (2008) summarized their work, disproportionately affected when household L concluding that, with respect to house prices, income changed. When the national number of there were three general types of housing rich families increased, the price of housing in markets in the U.S.: (1) low-priced, low demand Superstar cities rose by 39 percent more than in z5 other cities. Between 1970 and 2000, home L markets25; (2) medium priced, high demand zs prices in those cities rose by 75 percent, so markets with high supply elasticity and (3) national income increase accounted for more high-priced markets with high demand and low I supply elasticity.27 Hawaii's markets are of type than 80 percent of the excess growth in 3 which we will refer to as "high-priced markets". Superstar cities during that time (p.185). Thkey have very high prices, highly volatile High house prices perpetuate price increases market activity, and a supply side that does not even without an increase in location value or a respond quickly to increases in demand. They change in the elasticity of supply. They lead to also have high productivity ratings measured by higher rents and greater population growth as higher wages and higher household incomes, higher-income households crowd out L higher amenities, and greater external demand. g lower- income households. They will alter income distribution, as higher-income buyers crowd out In high-priced markets, demand and supply do L not contribute equally to the house prices. Theo middle-income homeowners. Finally, it causes a Eicher (2008) looked at both factors in change in the price-to-rent ratio. Lower income Washington State and concluded that, between households will be crowded out, higher income I1989 and 2006, demand factors (population households will expect higher appreciation and growth and income) increased the cost of a will be more willing to accept higher home prices. house in Washington by $50,000. Supply factors Thus, high prices create increased demand. I (land use regulation, permitting delays, and Some newer research suggests that other statewide growth management) increased the correlates of high-priced housing are worthy of cost of a house by $200,000. more intense research, including tourism, r Recently, housing economists found that the income inequality, and liberal politics. behavior of high-priced housing markets has departed even further from the simple demand 111 25 For example, Buffalo, Rochester, Erie, Cleveland, Gary, Akron, and Detroit. 28 Gyourko et al. were working with the standard cross- I26 Examples are Houston and Dallas, Oklahoma City, sectional housingdemand model, which P y posits that Ames Iowa, Topeka Kansas,and Lincoln Nebraska. changes in price are caused by differences in the 2' Such as Honolulu, San Francisco, Los Angeles, economic value of living in one market or another,which Portland, Seattle, Chicago, Boston, New York, are in turn driven by differences in wages, amenities, 111 Washington, D.0 , and Miami. and fiscal policies. L Hawai'i Housing Planning Study,2016 Page 25 ©SMS, Inc December,2016 1 1 a. Impact of High House Prices The unique aspect of Hawaii's housing market II history is the length of time that prices remain The most distinctive characteristic of Hawaii's steady after a run-up. Prices drop, but by lesser housing market is high prices. Figure 6 shows amounts and at a slower pace than in other high- II single-family and condominium sales prices from priced markets. 1980 to 2015 in Honolulu. Prices are in current Table 21 shows median sales prices for single- dollars. family homes and condominiums in Hawaii IIbetween 2009 and 2016. More detailed home Our last two price run-ups are clearly indicated. prices are shown in the Appendix. As suggested In both cycles, housing prices more than doubled by Figure 6, this period was marked by II in a few years. Both periods of expansion ended increasing prices, but was far short of the rate quickly, after which prices dropped slightly, then increases expected during a run-up. held in place. The period of adjustment following the last run-up was nearly a decade long. The Across the State, the median sales price of a II 1 post-2008 recovery has been 7 years in the single-family dwelling increased 18 percent making. Prices regained their 2007 peaks by between 2010 and 2015. The increase in 2012 for condominiums and 2013 for single- condominium sales prices was slightly lower at imii family homes. 13 percent over the same period. Hawaii County experienced a significant increase in The intensity of the run-up periods is not unique single-family home prices during this period, with II to Hawaii. West Coast States, New England, an increase of 21 percent in the median sales New York, Washington D.C., and Miami have price. similar profiles. New York, Boston, and Los I Angeles have had higher home prices than Table 21. Median Home Sales Prices, Counties Hawaii in some recent years. San Francisco's and State of Hawaii, 2009 and 2015 price history is even more volatile than Hawaii's. County Hawaii Honolulu Kaua`i Maui State II Figure 6. Housing Prices in Honolulu, 1980-2015 Single-Family House Sales Prices (in thousand) 111800,000 ------ 2009 $277 $576 $469 $496 $495 SF Price 2010 $258 $599 $494 $459 $486 700,000 — 2011 $244 $577 $462 $435 $470 Condo Price 600,000 2012 $262 $624 $459 $469 $501 2013 $294 $646 $520 $527 $543 imoi 500,000 2014 $317 $673 $543 $568 $572 400,000 2015 $330 $699 $625 $585 $600 Multi-Family Condominium Sales Pricesinia 300,000 (in thousand) 2009 $285 $303 $314 $394 $313 200,000 2010 $254 $306 $269 $384 $311 _I 2011 $210 $302 $234 $309 $292 100,000 2012 $259 $316 $293 $354 $316 0 mnnnnmunnnminnnuunnnmmnnmmimommnminmm�nnnnn l 2013 $261 $333 $302 $372 $333 m r+ m ,• m , ' m ,� m ,-, m m r' m 2014 $283 $350 $344 $412 $352 ddddddddddt7dddd O m LA 00 0 M Ln ob 0 r' LA o0 0 cn LA 2015 $273 $363 $359 $411 $364 00 00 CO 00 al rn 01 al 0 0 0 0 1--1 .--I .-4JI ateI o, oma, a(, o, 0( ate( 0 0 0 0 0 0 0 Source UHERO Further details on home sales prices are shown in Appendix Tables D-14 and D-15. Source: UHERO i 3 Hawaii Housing Planning Study,2016 Page 26 3 ©SMS,Inc December,2016 L 1 These figures are supported by a recent report Figure 7. Average Rents, Counties and State of on residential home sales in Hawai`i29 that put Hawaii, 2009-2015 the average sale price of a single-family house $2,600 -Honolulu -Maui -Hawaii -Kauai -State I between 2008 and 2015 at $528,300 for the State. The average sale price for condominiums r, $2,400 in the same period was $328,000. $2,200 • Ic $2,000 �.. 2. Rents t :: re $1,800 I 'wA� The Rental Housing Study 2016 shows that p1,600 Hawaiiaverage contract rents were on the rise a $1,400 • from 2009 through the first quarter of 2016. The """' I data indicate that rents continue to rise for the 51,200 State and each of the four Counties. $1,000 2009 2010 2011 2012 2013 2014 2015 2016 I Table 22. Average Rent for All Units, Counties and State of Hawaii, 2009-2016 Source: RentRange®, 2009-2016. Dotted lines are linear trends fitted to each rent series. County I Hawaii Honolulu Kauai Maui State Although the U.S. Department of Housing and 2009 1,261 1,999 1,645 1,632 1,783 Urban Development's Fair Market Rents for each 2010 1,375 1,953 1,733 1,764 1,650 of the counties are lower than the average I 2011 1,353 2,076 1,673 1,860 1,662 contract rents, the percentage increases over the 2012 1,377 2,109 1,694 1,840 1,706 past year are very similar. The increases for 2013 1,427 2,106 1,668 1,804 1,781 Maui, Hawaii, and Kauai Counties ranged from I 2014 1,387 2,214 1,736 1,728 1,841 one to four percent, while the increase for 2015 1,331 2,417 1,675 2,093 1,964 Honolulu was ten percent. 2016 1,474 2,468 1,704 2,106 2,019 Analyses of the rents by unit type and size I Source: Rent Range, 2009-2016. Figures shown in current revealed that these increases were common U.S. dollars across all types and sizes of units. Between I The contract rent data suggest that, across all 2011 and 2016, increases in rent amounts were types (single-family and multi-family) and sizes larger for multi-family (21.5%) than for single- (one-bedroom through five-bedroom) of rental family (15.2%) rental units. I units, renters in Hawaii are paying more for their accommodations now than they were previously. Table 23. Average Fair Market Rent for All Units, Counties of Hawaii, 2009-2016 Figure 7 shows rent growth changes since 2009. County I For the State, the current average rent is 2.8 Hawaii Honolulu Kauai Maui percent higher than in 2015. Increases in nearly 2009 1,160 1,825 1,332 1,584 all of the counties were one to two percent over 2010 1,232 1,906 1,414 1,682 I last year. Only one of the counties, Hawaii, had 2011 1,280 1,904 1,470 1,749 a notable increase over the past year. Al[E.raae 2012 1,295 1,977 1,428 1,625 rents__for I-lawall COUntV�climbe 11 percent 2013 1,150 2,060 1,835 1,374 I between2015 and 2016. 2014 1,047 2,046 1,739 1,318 2015 1,268 2,034 1,330 1,321 II 2016 1,311 2,172 1,310 1,429 29 http://files.hawaii gov/dbedt/economic/datareports/ Source: Dept. of Housing and Urban Development, 2009- 2016. Current U.S. dollars. homesale/Residential_Home_Sales_in_Hawaii_May I2016.pdf Hawaii Housing Planning Study,2016 Page 27 I ©SMS, Inc. December,2016 ■r+ Table 24. Average Rent by Unit Type and Size, State of Hawaii, 2009-2016 ..r Single-Family Unit Multi-Family Units All SF All MF 1BR 2BR 3BR 4BR 5BR Units 1BR 2BR 3BR 4BR Units 2009 1,064 1,359 1,981 2,325 2,848 1,915 1,121 1,467 1,909 1,970 1,783 2010 1,073 1,425 1,815 2,246 2,227 1,757 1,032 1,386 1,777 1,866 1,650 2011 1,165 1,481 1,830 2,345 2,153 1,795 1,090 1,387 1,807 1,703 1,662 2012 1,086 1,476 1,803 2,134 2,456 1,791 1,101 1,420 1,792 2,083 1,706 2013 1,137 1,491 1,922 2,213 2,503 1,853 1,141 1,494 1,911 2,221 1,781 2014 1,093 1,490 1,864 2,223 2,610 1,856 1,218 1,605 2,057 2,415 1,841 2015 1,182 1,590 2,032 2,600 2,693 2,020 1,250 1,645 2,126 2,559 1,964 2016 1,212 1,537 2,085 2,719 2,784 2,067 1,275 1,719 2,174 2,672 2,019 %chg (2011- 4.0% 3.8% 13.9% 15 9% 29.3% 15.2% 17.0% 23.9% 20.3% 56.9% 21.5% 2016) Source. Rent Range, 2009-2016 Figures are current U.S. dollars. Further details are shown in Table E-10 through E-13 in the Appendix. 3 The average rent for a two-bedroom single- must be a sufficient number of units to family unit increased by 4 percent from 2011 to accommodate all households and an appropriate J 2016, and monthly rent for the same size multi- mix of unit types and sizes in the appropriate family unit increased by 24 percent during the locations. Perhaps the most significant challenge same period. Similarly, the average amount paid in housing Hawaii's people is the high cost of J to rent a four-bedroom single-family unit went up housing across the state. While the multi-million by $373 (16%) between 2011 and 2016. In that dollar homes sought by wealthy international same time, the average rent for four-bedroom buyers will nearly always be supplied by the multi-family units jumped by $970 (57%). market, the number of homes that are affordable to lower income households is limited This trend is not unique to Hawaii; rents were up for all major metropolitan areas. Honolulu is a. Employment and Affordable Prices consistently ranked near the top of the list of America's high-rent cities and, in 2016, our There are numerous definitions of affordable average rent was second only to San Francisco. housing and many approaches to describing theJ With the recent improvement in the overall impact of affordability on the population. We have already discussed the shelter-to-income economy, rentership has increased as more kids ratio and its role in estimating affordability. move out of their parents' basements and into rental apartments. This leads to falling rental Households with very high STI ratios are said to vacancies and increasing rents. With many of be living in unaffordable units. Areas with high the would-be first-time buyers unable to afford average STI ratios are less affordable than those current housing prices, homeownership has with lower ratios. dipped in exchange for increases in rentership. In recent years, the measure of the wage and j salary income needed to rent a median-priced 2- 3. Affordable Housing bedroom apartment has attracted the attention of many. The measurement was developed by the j Simply having one housing unit per household National Low-Income Housing Coalition (NLHC) with additional vacant units to ensure a and is available in the Out Of Reach Report reasonable vacancy rate does not ensure that all annually. A summary of findings for 2016 are households will be adequately housed. There presented in Table 25. Details appear in Table E-6 in the appendix. 3 Hawaii Housing Planning Study,2016 Page 28 ©SMS,Inc. December,2016 I IP Table 25. FY16 Housing Wage, Hawai`i 2016 The taxonomy classifies all housing units, Hourly wage necessary to occupied and vacant, as affordable or Iafford a 2-bedr000m rental unaffordable to those households within specific as unit at HUD Fair Market HUD household income guidelines. By virtue of Rent, 2016 the HUD guidelines, classified housing units are I I State of Hawaii $ 34 22 affordable and adjusted for household size and Hawaii County $ 22.96 geography. We applied the procedure to Hawaii household prices and rents in Public Use I Honolulu County $ 38.17 Microdata Sample (PUMS) data for 2014, using Kauai County $23.81 guidelines for 30 percent, 50 percent, 80 Maui County $ 24.73 percent, and 100 percent of AMI for each county. I I Source. NLIHC Out Of Reach Report,2016 Results are presented in Table 26. Less than Compare Hawaii's Housing Wage ($34.22) with half of the housing stock statewide (49 8%) was affordable to households earning 80 percent of I the average wage of a renter in the state ($14.53), and it is understandable that there are HUD AMI. Affordable units were most limited in many households with very high shelter-to- Maui County, with just 48.6 percent of the income ratios. Notice, also, the large differences island's housing affordable to low income Ibetween the City and County of Honolulu and households. The housing stock on Kauai the other counties. Finally, the NLIHC measure included the largest percentage of affordable allows us to compare our rent wage with others units (53.3%), and 49.9 percent of units were ,iwacross the nation. Hawaii's 2016 rent wage is affordable in the City and County of Honolulu. is imi the highest among the States and the Honolulu rent wage is the seventh highest among all the The range across the counties, however, was II counties in the nation. less than five percentage points, clearly indicating that about half of all the affordable units in Hawaii are affordable to households with IIb. Affordable units in the current housing incomes below 80 percent of the HUD median. stock Across the state, 21.5 percent of available units For housing planning, we prefer a definition of were affordable to households earning 50 I affordable housing units recently developed by percent of the median AMI. An additional 28.3 the Urban Institute (UI).30 They defined percent of all units were affordable to affordable housing units as units with a monthly households earning between 50 percent and 80 laI i✓ mortgage or rent payment that would require no percent of AMI. Finally, 58.8 percent of the more than 30 percent of the monthly household housing units in Hawaii were affordable to income for a household earning a specified households with incomes at the area median 1 l percent of the HUD Area Median Income (AMI). income. Unlike other measures of affordability, which rp, measure the condition of households or persons in households, UI affordability measures a No affordability as a condition of the housing stock, IIRthe number of existing units with shelter prices Ili affordable to households with varying levels of resources. I! 30 Leopold, Josh, Liza Getsinger, Pamela Blumenthal, Katya Abazajan, and Reed Jordan (2015). The housing affordability gap for extremely low-income renters in i2013, Urban Institute Research Report,June 15,2015. 'ii! Hawaii Housing Planning Study,2016 Page 29 ©SMS, Inc December,2016 gal ilk Table 26. Affordable Housing Units by Occupancy, Tenure, and County, 2014 No ot State I Hawai'i I Honolulu I Kaua'i I Maui TOTAL HOUSING STOCK 477,515 69,458 321,661 24,955 61,395 TOTAL UNITS WITH PAYMENTS 380,914 49,960 261,682 19,220 50,021 % affordable at 50% AMI 21.5% 20.3% 22.1% 24.1% 18.7% No r_ % affordable at 80% AMI 49.8% 49.4% 49.9% 53.3% 48.6% % affordable at median AMI 58.8% 54.1% 60.2% 61.3% 59.2% II RENTAL UNITS Occupied 179,636 18,816 132,483 7,616 20,690 affordable at 50% AMI 32.6% 32.5% 32.8% 41.4% 27.9% I • affordable at 80% AMI 66.8% 71 1% 65.3% 67.8% 68.4% cYo affordable at median AMI 71.2% 75 5% 68.9% 75.3% 80.7% Vacant 21,117 2,636 8,927 1,969 7,585 I % affordable at 50% AMI 34.5% 48.6% 39.3% 23.0% 26.8% % affordable at 80% AMI 70.4% 79.4% 76.2% 59.2% 63.4% % affordable at median AMI 78.1% 86.6% 82.4% 69.7% 72.1% I OWNERSHIP UNITS Occupied 174,062 26,272 117,679 9,044 21,067 cYo affordable at 50% AMI 18.5% 9.1% 8.9% 11.0% 7.2% % affordable at 80% AMI 30.4% 30.9% 31.0% 33.2% 25.0% I I affordable at median AMI 44.3% 35.6% 49.0% 41.0% 34.4% Vacant 6,099 2,236 2,593 591 679 affordable at 50% AMI 10.0% 15.5% 8.8% 4.1% 1.7% cYo affordable at 80% AMI 34.8% 48.4% 30.6% 25.9% 13.6% II IIIA affordable at median AMI 47.0% 53.5% 51.3% 34.3% 28.5% ALL UNIT TYPES I ' Occupied 353,698 45,088 250,162 16,660 41,757 • affordable at 50% AMI 33.7% 36.9% 33.4% 39.2% 29.5% • affordable at 80% AMI 56.5% 57.2% 56.5% 61.9% 53.5% II% affordable at median AMI 61.4% 63.5% 61.2% 65.2% 58 7% Vacant 27,216 4,872 11,520 2,560 8,264 cYo affordable at 50% AMI 29.7% 34.2% 32.4% 24.8% 24.8% • affordable at 80% AMI 57.5% 68.3% 54.6% 54.0% 56.2% % affordable at median AMI 61.8% 73.9% 58.7% 58.1% 60.1% Yu Units with No Housing Payment 96,601 19,498 59,979 5,735 11,374 Source SMS estimates from ACS 5-year data 2014. "Housing stock" includes occupied housing units and vacant plus I I available units. Units with no payment include owner units with paid mortgages and units occupied without payment of cash rent. In every county, many more rental units than The UI measure of affordable housing in a I ownership units were affordable to households geographic area has advantages and with incomes below the AMI. Seventy-one disadvantages. The major advantage is that it percent of occupied and 78 percent of vacant provides a measure of affordability that is tied to r ea rental units were affordable at 100 percent of individual housing units rather than an estimate AMI. Comparable figures for ownership units based on the characteristics of occupants. were 44 and 47 percent. At the median income Planners know how many units are affordable or obi level, the percent of currently occupied housing and even how many of those are vacant and units and currently vacant housing units that available. Housing planning decisions can be were affordable were very similar at 61 percent. guided by the desire to increase the number and O,lb types of affordable units in specific areas. r lb Hawaii Housing Planning Study,2016 Page 30 ©SMS, Inc. December,2016 li di 1 Its largest disadvantage is that it is very detailed. In 2014, 30 percent of the owned housing units Rather than describing affordable housing units in Hawaii were affordable to households earning as those priced below $400,000, planners would 80 percent of HUD AMI (30.4%). There was little 111 need to specify target area, unit type, income variation among the counties. target, and whether the units in question are occupied, vacant and available, or both Rental units were significantly more likely than ' ownership units to be affordable to low-income It is possible to generate an affordability households. Statewide, two-thirds of the rental measurement for households with incomes housing units were affordable to low income ' below 30 percent of AMI, or for households with households (66.8%). Once again, the incomes above 180 percent of AMI. There is percentage of affordable units in Honolulu was also a potential for comparing the number of lowest among the counties (65.3%). ' households (families) with specific income levels to the number of units affordable to those Vacant units across the state maintained the families based on income and household size. pattern found for occupied housing units. ' Compared to occupied rental units, a slightly As discussed in the demand section of this higher percentage of vacant rental units was report, households may be able to afford to deemed affordable (70.4%). Similarly, close to make the monthly payments for a housing unit, 35 percent of vacant ownership units (34.8%) ' but cannot purchase a home because they lack were affordable, versus 30.4 percent of occupied sufficient funds for the down payment. It is also ownership units. important, therefore, to examine the supply of affordable ownership versus rental units. Figure 8. Percentage of Occupied Housing Units ' that were Affordable at 80% AMI, 2010—2014 70% 65% 60% Y_ 55% sa ' o Q 50% 45% Hawaii Honolulu Kauai -Maui 40% ' Y2010 Y2011 Y2012 Y2013 Y2014 Source SMS estimates from ACS 5-year data 2010-2014 Hawaii Housing Planning Study,2016 Page 31 ©SMS, Inc. December,2016 1 I III. HOUSING FORECASTS,, 2015-2025 3 The focus of the HHPS is on planning — using Market history is apparent in the supply line, with housing market information to develop courses its pattern of rapid growth and longer adjustment of action in housing development over the next periods. A notable drop in housing production is j few years. Planning's future-oriented viewpoint evident in the 2009-2010 growth rate following requires more than information on past the Great Recession in 2008 (Figure 9). performance. It requires a forecast of how the j housing market will function in the future. The forecast suggests continued slow growth in Hawaii's housing market. Specifically, it predicts A. HOUSING SUPPLY slow production rates between 2016 and 2020. The percentage of growth during this period We measured supply in terms of housing units ranges from 0.88 to 1.08 percent annually added each year with separate estimates for single-family and multi-family units. For past Changing any of the underlying assumptions will years, added units were entered as the alter the forecast. Increasing population growth, difference between housing unit counts for two decreasing unemployment, and declining interest adjacent years. Supply forecasts were based on rates will all work toward increasing demand and past performance of the housing market, the need for more housing units. Slower growth population growth, and household formation (a in any of those assumptions would decrease the function of household size over time). need for new units. I 1. Modeled Supply B. HOUSING DEMAND Estimatedproduction of new housin units for We estimate demand in terms of new household I Hawaii between 1990 and 2040 isgshown in formation.31 Estimating demand involves Figure 9. Historical data were taken from determining the number of housing units that will decennial census and ACS data, as well as be required to house the net number of new authorized county building permits. households each year. The estimates are calculated for a given population (or projected population, in the case of a forecast), the Figure 9. New Construction, State of Hawaii, population residing in households, and 1990-2040 loo _ 5% assumptions about the average household size ,000 -HousJng Unit Growth Rate (household formation). Demand estimates e0o,000 _ —Total Housing Units -- assume that the characteristic conditions of our 496 housing stock, the workings of our housing r 500.00° ec market, and the accumulated impact of past j p 3% I market inefficiencies, are maintained throughout eo 400,000 a the next 25 years. Finally, any demand estimate = 300,000 D reflects the number of units required to house population growth but does not speak to whether 200000 the needed units will be built. 1% 100,000 _ .. _ _ 1 _ . 31 Note: The discussion of demand in the previous section o „rrrI' n rn-rrn rnitir ��frrr„ liii�n r���� o% was based on the Demand Survey where "demand" is b, F, f i� o o E g N N N g M gi identified byhousingconsumers. Data from past I C, C, O, O, 0 0 0 0 0 0 0 0 0 0 0 0 0 Demand Surveys have been incorporated in the Source: Hawaii Housing Model, 2016 Housing Model. What appears here is the end result of supply and demand characteristics of the local housing market I Hawai'i Housing Planning Study,2016 Page 32 ©SMS, Inc December,2016 I I1. Modeled Demand Assumptions persistent feature of demand, we find no evidence that it must necessarily continue. The housing demand estimates utilize population Some major components of past run-ups, I estimates that conform to those presented by including falling interest rates, major increases in DBEDT in their latest population forecast. The external demand, and the bubble and bust of the most recent version is the 2040 Series. last run-up are not in evidence for the next five I years. Hence, we accept the short increase in Figure 10 presents household growth estimates demand for the next period and the slower and for the State housing market between 1990 and less volatile growth to the year 2040. I 2040. The total number of households is expected to grow between 2016 and 2040, but at Obviously, changes in model assumptions would a slower rate than in the past. The average alter results Increasing employment would push I growth rate is projected to fall to 0.65 percent up household incomes, shortening the current annually between 2020 and 2030, then to dip to adjustment period and perhaps increasing the an average of 0.45 percent per year from 2030 volume of the next rise in demand. Increasing through 2040. Slower growth in the number of interest rates would change the new forecast Ihouseholds is primarily a function of slower significantly, as well. population growth. I Figure 10.Total Households, State of Hawaii, 2. Demand Estimates 1990-2040 600.000 __ 5% The estimate of housing units needed in Hawai'i I �Household growth rate for the next ten years is shown in Table 27. The —Households figures in the table are the number of units a% needed between 2015 and 2025, inclusive. v I 9 aoo,000cc L3% L Housing demand estimates recently released by N DBEDT32 focused on the number of new housing 300'00° a units required to accommodate new households 2% N added to the population during a specific period. 200'000 The demand estimates are independent of r 1% supply estimates and do not specify that demand I 100.000 uj, u' – units will be built. oi,r „ i11JJJI1IJIIJHIUacs In Hawal I, we generally agree to use the official pp M *.8 N U1 r1 Q P` O m ,O 01 N J1 pppp I 01 01 01 01 O O O .ti .ti .ti N N N N M 0 e-, 01 N o N N N N N N N 00000000000 N N state population estimates unless there is a .r - .-1 N N N N N N N N N N N N N N Source. DBEDT long range forecasts 2040 tactical reason for producing an independent forecast. The DBEDT forecast for housing I The average household size is expected to be demand were deemed appropriate for 3.00 persons per household by 2025 To some expressing the need for new units in Hawaii in extent, household size is limited by smaller unit the near future. For Hawai`i County, DBEDT I sizes, but the primary causes are demographic. estimated housing demand between 2015 and In-migrant household sizes are larger than those 2025 to be 19,610 units, 16,292 of which were from households formed by natural growth and required for new households and the remainder out-migrant households are often relatively for vacancies and seasonal units. Ismall. As noted earlier, the Hawaii housing market has been cyclical over the last 40 years. We have I had three major market expansions followed by 32 Department of Business, Economic Development & periods of post-expansion adjustment. While the Tourism. 2015 Measuring housing demand in Hawai'i, cyclical nature of the housing market has been a 2015-2025. DBEDT,* Research and Economic Analysis IDivision,April 2015. I Hawaii Housing Planning Study,2016 Page 33 ©SMS,Inc. December,2016 C. NEEDED UNITS BY INCOME LEVEL the income qualifications for service under most HUD programs. Table 28 shows the same The number of new units that would have to be forecast distributed according to the survey built during the ten-year period between 2015 income in each county as measured in the and 2025 to meet new demand generated by Housing Demand Survey. As identified by the changing demographic and economic conditions Housing Demand Survey, the 2014 median is 64,693 (Table 27a). Some of those units will household income for the State was $72,868. be produced by Hawai`i's housing industry The median was slightly higher for the City and (public and private) and some will not. County of Honolulu ($73,859). The median income for Maui and Kaua'i counties were Table 27a summarizes the housing demand for approximately equal ($59,799 and $58,868, the State and its four counties from 2015 through respectively). At $44,876, the annual median 2025. Table 27b presents the needed units by household income for Hawai`I County was well HUD income guidelines. HUD guidelines define below the State median. . Table 27a. Housing Demand by Income Classification, Counties & State of Hawaii, 2015-2025 HUD Income Classification (%of Area Median Income) Less 30 to 50 to 60 to 80 to 120 to 140 to than 30 50 60 80 120 140 180 180+ Total State of Hawaii. 15,511 12,507 6,352 9,458 8,291 5,378 1,695 5,501 64,693 Honolulu 6,105 4,414 2,364 4,115 4,075 2,130 867 1,778 25,848 J Maui 2,947 2,775 1,414 2,393 1,626 1,493 500 801 13,949 Hawaii 4,966 3,917 2,292 2,200 2,193 1,295 122 2,624 19,609 J Kaua'i 1,493 1,401 282 750 397 460 206 298 5,287 Income Classifications Less $100k More than $30k to $45k to $60k to $75k to to than $30k $45k $60k $75k $100k $150k $150k Total State of Hawai'i 16,998 13,691 6,984 10,293 9,054 5,853 1,820 64,693 Honolulu 6,556 4,740 2,539 4,419 4,376 2,287 930 25,848 Maui 3,127 2,944 1,500 2,539 1,725 1,584 530 13,949 Hawaii 5,733 4,522 2,646 2,540 2,532 1,495 142 19,609 Kaua'i 1,582 1,485 299 795 421 487 218 5,287 Source: Housing Demand Survey and DBEDT Housing Demand 2015-2025 J Hawaii Housing Planning Study,2016 Page 34 ©SMS,Inc. December,2016 L LTable 27b. Housing Demand by HUD Income Classification, Counties & State of Hawaii, 2015-2025 HUD Income Classification(%of Area Median Income) More LLess than than 30% 30-50% 50-60% 60-80% 80-120% 120-140% 140-180% 180% Total State of Hawaii 15,511 12,507 6,352 9,458 8,291 5,378 1,695 5,501 64,693 IOwnership Units 5,611 4,503 2,584 5,404 5,468 4,669 1,446 4,787 34,472 Single-Family 4,821 3,432 2,239 4,453 3,459 3,549 1,025 3,744 26,722 Multi-Family 790 1,071 345 947 2,009 1,120 423 1,045 7,750 I Rental Units 9,900 8,004 3,768 4,054 2,823 709 249 715 30,222 Single Family 6,023 4,226 2,371 2,941 1,680 430 157 534 18,362 Multi-Family 3,877 3,778 1,397 1,113 1,143 279 92 181 11,860 IHonolulu 6,105 4,414 2,364 4,115 4,075 2,130 867 1,778 25,848 Ownership Units 1,526 1,629 1,073 2,495 2,784 2,046 672 1,501 13,726 I Single-Family 918 868 932 1,877 1,036 1,300 451 977 8,359 Multi Family 608 761 141 618 1,748 746 221 524 5,367 Rental Units 4,579 2,785 1,291 1,620 1,291 84 195 277 12,122 I Single-Family 1,887 550 461 882 539 30 129 213 4,691 Multi Family 2,692 2,235 830 738 752 54 66 64 7,431 I Maui Ownership Units 2,947 2,775 1,414 2,393 1,626 1,493 500 801 13,949 1,079 824 351 1,151 1,308 1,292 469 766 7,240 Single-Family 1,022 783 234 1,022 1,112 1,032 368 610 6,183 Multi-Family 57 41 117 129 196 260 101 156 1,057 IRental Units 1,868 1,951 1,063 1,242 318 201 31 35 6,709 Single-Family 1,295 1,226 771 1,050 239 156 17 30 4,784 Multi-Family 573 725 292 192 79 45 14 6 1,926 IHawaii 4,966 3,917 2,292 2,200 2,193 1,295 122 2,624 19,609 I( Ownership Units 2,466 1,430 1,067 1,394 1,200 1,082 112 2,270 11,021 I Single-Family 2,348 1,256 981 1,252 1,153 973 48 1,930 9,941 Multi Family 118 174 86 142 47 109 64 340 1,080 Rental Units 2,500 2,487 1,225 806 993 213 10 355 8,589 it- I Single-Family 2,086 1,903 981 671 722 117 1 262 6,743 V Multi Family 414 584 244 135 271 96 9 93 1,846 I Kauai 1,493 1,401 282 750 397 460 206 298 5,287 fly, Ownership Units 540 620 93 364 176 249 193 250 2,485 ' r Single-Family 533 525 92 302 158 244 158 227 2,239 I Multi-Family 7 95 1 58 18 5 37 25 246 1 Rental Units 953 781 189 386 221 211 13 48 2,802 Single-Family 755 547 158 338 180 127 10 29 2,144 I Multi-Family 198 234 31 48 41 84 3 19 658 Source: Housing Demand Survey and DBEDT Housing Demand 2015-2025 I I I Hawaii Housing Planning Study,2016 Page 35 0 SMS, Inc. December,2016 j Table 28. Housing Demand by Income Classification, Counties and State of Hawaii, 2015-2025 Income Classifications More $30k to $45k to $60k to $75k to $100k to than il LT$30k $45k $60k $75k $100k $150k $150k Total State of Hawaii 16,998 13,691 6,984 10,293 9,054 5,853 1,820 64,693 Ownership Units 4,785 6,425 2,805 6,769 7,052 5,105 1,530 34,472 ill Single-Family 4,215 4,615 1,821 4,841 5,497 4,463 1,269 26,722 Multi-Family 570 1,810 984 1,928 1,555 642 261 7,750 Rental Units 12,213 7,266 4,179 3,524 2,002 748 290 30,222 111111 Single-Family 6,791 4,884 2,700 2,088 1,153 533 213 18,362 Multi-Family 5,422 2,382 1,479 1,436 849 215 77 11,860 Honolulu 6,556 4,740 2,539 4,419 4,376 2,287 930 25,848 Ownership Units 1,029 2,470 1,193 3,257 3,134 1,930 712 13,726 Single-Family 874 1,551 440 1,595 1,844 1,462 592 8,359 Multi-Family 155 919 753 1,662 1,290 468 120 5,367 Rental Units 5,527 2,270 1,346 1,162 1,242 357 218 12,122 1 Single-Family 1,394 1,698 331 464 478 169 157 4,691 Multi-Family 4,133 572 1,015 698 764 188 61 7,431 Maui 3,127 2,944 1,500 2,539 1,725 1,584 530 13,949 il Ownership Units 904 876 619 1,580 1,257 1,490 514 7,240 Single-Family 782 690 532 1,387 1,055 1,358 379 6,183 J Multi-Family 122 186 87 193 202 132 135 1,057 Rental Units 2,223 2,068 881 959 468 94 16 6,709 Single-Family 1,590 1,545 659 454 450 86 0 4,784 Multi-Family 633 523 222 505 18 8 16 1,926 Hawaii 5,733 4,522 2,646 2,540 2,532 1,495 142 19,609 J Ownership Units 2,363 2,446 833 1,561 2,407 1,322 89 11,021 Single-Family 2,133 1,898 696 1,494 2,344 1,287 89 9,941 Multi-Family 230 548 137 67 63 35 0 1,080 iiii Rental Units 3,370 2,076 1,813 979 125 173 53 8,589 Single-Family 2,900 1,020 1,595 930 72 173 53 6,743 Multi-Family 470 1,056 218 49 53 0 0 1,846 Kauai 1,582 1,485 299 795 421 487 218 5,287 Ownership Units 489 633 160 371 254 363 215 2,485 Single-Family 426 448 153 365 254 356 209 2,239 Multi-Family 63 157 7 6 0 7 6 246 Rental Units 1,093 852 139 424 167 124 3 2,802 Single-Family 907 621 115 240 153 105 3 2,144 Multi-Family 186 231 24 184 14 19 0 658 I Source: Housing Demand Survey and DBEDT Housing Demand 2015-2025 I Hawaii Housing Planning Study,2016 Page 36 I ©SMS, Inc December,2016 I t1. Types of Units Needed account for their willingness to accept alternatives or their financial qualifications make Tables 27 and 28 show the distribution of their preferred move. As was noted in the prior Ineeded units by county, tenure and unit type for section on qualified demand, not every the next ten years. They have been estimated household is financially prepared to pursue their for each of eight market levels following U.S. preferred housing situation. IDepartment of Housing and Urban Development A portion of demand survey respondents who (HUD) income guidelines. indicated theirpreference to purchase their next t The DBEDT Housing Demand 2015-2025 report residence conceded that they might have to rent was used to develop the total number of needed instead. Similarly, several households that intend units by county and for the State, as a whole. to buy a single-family home when they move The distribution of needed units by tenure, type, noted that they would consider buying amulti- and market level was developed from Housing family dwelling if they could not find a single- Demand Survey data. family unit they could afford. Finally, a I percentage of the survey respondents who The analysis employs the assumption that indicated that they would be purchasing their needed units are distributed according to the next unit also reported that their current financial effective demand estimates from the survey. situation was incompatible with that goal The detail produced in this analysis will be useful (currently living in public housing, receiving in a variety of housing planning efforts in the next Section 8 assistance, or with no money for a ten years. It is relevant, reliable, and crucial to down payment). I housing planning. Additionally, units were not included in the Effective demand includes only Hawaii residents needed housing unit counts that would be I who are planning to move to a unit in the State of needed to accommodate those respondent Hawaii in the next ten years. The analysis for households that are currently doubled-up (and Tables 27 and 28 did not account for people who are, in reality, two households). I are currently doubled-up for economic reasons. Rather than simply a re-allocation of the needed Not surprisingly, in a very high-priced housing units by tenure or type, the number of units I market like Hawaii's the number of needed units needed to house those households that are is relatively high. The lion's share of the needed currently doubled-up or include hidden homeless units, however, is concentrated at the lowest persons would be in addition to the 64,693 units HUD income levels. This finding suggests that needed statewide. Ithe market is more effective in producing high- end units than low-end units. Inefficiencies are Similarly, housing units that might result from exacerbated in periods of rapid market homeless persons re-entering the housing I expansion when fewer low-end units are built. market are not included in Tables 27 or 28. By More middle-market and low-end units are built definition, homeless persons are not included in during periods of market adjustment. housing demand estimates derived from data on I households or housing units. While the Housing One conclusion of the 2016 modeling exercise Demand Survey did make provision for including supports major conclusions of every housing homeless persons by incorporating cell phone t study and blue-ribbon housing task force interviews, very few homeless persons were conducted in Hawaii for the last twenty years — identified in the survey this year. what we need is more affordable housing. Applying any one of these possible adjustments IThe estimates in the two tables above reflect the to the needed units tables will result in a shift in preferences of Hawaii's likely movers, but do not the total number and type of housing units needed to accommodate Hawaii's residents by I Hawaii Housing Planning Study,2016 Page 37 ©SMS,Inc December,2016 3 2025. For the reasons detailed above, the Considering just the units needed for elderly j needed units tables cannot be regarded as the households, about one-third (1,889 units) are final statement on the number and type of units needed for low- and moderate-income required to house Hawaii's residents between households (80% AMI or less). For these, the 3 now and 2025. pattern is different across counties. In Kaua'i County, only 8 percent of the units needed for 2. Units for Elderly Housing elderly households are in the lower income range. Close to 40 percent of the needed elderly Analysis was also conducted to identify the units for Honolulu, however, are for households subset of total needed units that would be earning 80 percent AMI or less. required to accommodate elderly households, Of the units needed for elderly households that is, households with one or more persons 60 statewide demand is evenly split between years of age or older, no children under the age ownership and rental housing units. This was of 18, and no persons other than immediate similar across all the counties except for Hawai'i family. Of the 64,693 units needed for County, where the demand for ownership households between 2015 and 2025, just under represents 67 percent of the needed units. 9 percent were for elderly households statewide (5,639 units; Table 29). All other needed As was found for the tenure of the units needed housing units, referenced here as "family units" for elderly households, the demand for single- would be for the use of all other types of3 households. family versus multi-family units was almost evenly distributed. Of the 5,639 needed elderly Close to six out of ten units are needed for units, there was demand for 2,690 (48%) single- elderly households are in Honolulu County family dwellings. Demand for single-family units (3,213 units). Hawaii County needed 19 percent was slightly lower among elderly households in of the elderly units, followed by Maui County with Honolulu (45%) and Maui (45%) and slightly 17 percent. The fewest units needed to higher among elderly households° in Hawaii accommodate Hawai'i's elderly households were County (67%) and Kaua I County (53/o). on Kauai (8%). I I I I 1 1 Hawaii Housing Planning Study,2016 Page 38 ©SMS,Inc. December,2016 L LTable 29. Housing Demand by HUD Income Classification, Elderly Persons, Hawaii, 2015-2025 HUD Income Classification(%of Area Median Income) More ILess than than 30% 30-50% 50-60% 60-80% 80-120% 120-140% 140-180% 180% Total State of Hawaii 770 201 188 730 674 1,078 497 1,501 5,639 I Ownership Units 185 77 117 232 533 466 188 1,008 2,806 Single-Family 185 46 51 227 445 95 24 541 1,614 Multi-Family 0 31 66 5 88 371 164 467 1,192 IRental Units 585 124 71 498 141 612 309 493 2,833 Single-Family 52 124 3 140 0 558 0 199 1,076 Multi-Family 533 0 68 358 141 54 309 294 1,757 L Honolulu 703 25 66 465 450 738 240 526 3,213 Ownership Units 170 25 66 171 389 275 36 327 1,459 LSingle-Family 170 0 0 171 378 39 0 25 783 Multi Family 0 25 66 0 11 236 36 302 676 Rental Units 533 0 0 294 61 463 204 199 1,754 I Single-Family 0 0 0 0 0 463 0 199 662 Multi Family 533 0 0 294 61 0 204 0 1,092 I Maui 46 93 11 178 167 107 63 282 947 Ownership Units 0 19 0 61 123 24 16 173 416 Single-Family 0 13 0 56 46 0 16 136 267 I Multi-Family 0 6 0 5 77 24 0 37 149 Rental Units 46 74 11 117 44 83 47 109 531 Single-Family 46 74 0 56 0 83 0 0 259 tMulti-Family 0 0 11 61 44 0 47 109 272 Hawaii 0 18 108 84 45 111 108 577 1,051 L Ownership Units 0 18 51 0 21 111 82 420 703 Single Family 0 18 51 0 21 0 0 336 426 Multi-Family 0 0 0 0 0 111 82 84 277 I Rental Units 0 0 57 84 24 0 26 157 348 Single Family 0 0 0 84 0 0 0 0 84 Multi-Family 0 0 57 0 24 0 26 157 264 IKauai 21 65 3 3 12 122 86 116 428 Ownership Units 15 15 0 0 0 56 54 88 228 I Single-Family 15 15 0 0 0 56 8 44 138 Multi Family 0 0 0 0 0 0 46 44 90 Rental Units 6 50 3 3 12 66 32 28 200 I Single-Family 6 50 3 0 0 12 0 0 71 Multi Family 0 0 0 3 12 54 32 28 129 Source: Housing Demand Survey and DBEDT Housing Demand 2015-2025. I it I Hawai'i Housing Planning Study,2016 Page 39 ©SMS,Inc December,2016 I IV. HOUSING ISSUES A set of housing issues associated with the confirmed plans to reduce the number of soldiers general housing market activity in Hawaii were based at Schofield Barracks by 1,200. 3 selected for special attention in 2016. Those included the impact of the military on housing in Figure 11. Active Military Personnel, State of Hawaii, the impact of the visitor industry on Hawaii, 1983-2015 residential housing, homelessness as a housing 55,000 issue, and descriptive information on housing for persons with special needs. 50,000 45,000 A. HOUSING THE MILITARY •.. 40,000 .......... The military presence in Hawaii has been 35,000 discussed at length in the state, especially with reference to our housing issues. In this section 30,000 ' we summarize the salient issues that been bought forth over the last several years. 25,000 20,000 ' 1. Military Population m `^ ^ m `^ :OA ffi8848 � � i3; � � 88800 .-� .-� �+ .-� .+ N N N N N The military are an important part of Hawaii's Source. Defense Manpower Data Center, Office of the 3 population. In 2015, there were 46,764 service Secretary of Defense, U.S. Department of Defense. personnel and 64,119 military dependents living According to the Army's 2020 Force Structure in Hawaii, abouto 7.8 percent of the population. Realignment, Schofield Barracks and Fort J Nearly all (98.7%) were located on0 ahu. Shafter could change dramatically over the next Among the states, Hawaii had the 7thhighest several years. The Army will potentially move number of military personnel and dependents 16,000 troops out of Schofield and another 3,800 per capita, behind California, Virginia, Texas, troops from Shafter by 2020. North Carolina, Georgia, and Florida. The other services have also been affected. The From the end of World War II to 1990, the Marines are currently in a holding pattern while number of military personnel in Hawaii grew their status is being reviewed at each budget slowly and steadily. Significant drawdowns cycle, but under sequestration. The total force began in 1990 and lasted through 1999. The could be reduced from 184,000 to 175,000. The j count remained stable at about 35,000 through Air Force, the smallest branch of the US military, 2007 and in recent years has been rising rapidly is also subject to personnel cuts. to a high of about 53,000 personnel in 2013. 3 The military's impact on housing demand In the past four years, the number of military depends on the number of military personnel and personnel has been declining. In July 2015, the dependents housed off base. About 65 to 70 Army announced plans to cut 40,000 soldiers percent of military service members nationwide and 17,000 civilian personnel from its payroll live off base in private sector housing.34 Applying over the next two years, a reduction that will that figure to Hawaii's 2015 military population affect all its domestic and foreign posts. While would produce a need for about 31,500 housing the full impact on Hawaii is unknown, the Army 34 Military Housing Privatization. FAQs Office of the Deputy Under Secretary of Defense, Installations and Environment, downloaded March 20, 2016, from 33 Table 12.03-Selected Labor Force and Commuting http://www.acq osd mil/housing/fags htm#2. Characteristics, by Geographic Area ' Hawaii Housing Planning Study,2016 Page 40 ©SMS, Inc December,2016 I Iunits, or 6 percent of the state's housing stock. all support the conclusion that MPHI contributed Locally, military sources from all branches of the significantly to housing production on O`ahu armed forces offer a lower estimate, reporting between 2005 and the present. During the last I that roughly 22,000 military personnel and ten years, civilian housing stock growth rates families live in off-base housing.35 averaged about one-half of one percent per year. Military housing stock grew by an average of 5.9 I While these estimates differ significantly, it is percent per annum during the same period. clear that the military presence in Hawaii affects demand for housing; at least on O`ahu. Their 3. Basic Allowance for Housing I numbers represent external demand for housing units that causes upward pressure on housing The net impact of the demand and supply on prices and rents, especially in a market with O`ahu's housing prices and rents is further I major limits on supply. shaped by the military's support of personnel who prefer to live off base The Basic Allowance External demand will decrease if the military's for Housing (BAH) is an allowance given to plans for reduction are realized. That will tend to military personnel who do not reside in I reduce housing prices and rents on O'ahu, government quarters or barracks. A frequent especially in areas near large military bases. lament is that the military drives up rental rates on O`ahu.37 To evaluate this claim, several I 2. Military Housing factors must be considered. If Hawaii's military population generates Overall, the BAH has been increasing over the I additional demand for housing units on Oahu, it past 20 years, with notable increases from 2013 also adds to the Island's housing supply. Prior to to 2015. Table 30 displays the BAH for Oahu 1996, the military's contribution to the housing from 1998 through 2016 for the lowest ranking ' stock was limited to the number of on-base enlisted military personnel and the highest- housing units available to the troops and their ranking military officers, with and without families. Since its inception, however, the Military dependents. As the majority of military service Housing Privatization Initiative (MHPI) has personnel in 2016 are classified as levels E-3 to I greatly increased the contribution of the military E-6 (77.3%)38, the average BAH for those to the housing stock of the host state. personnel (Table 30) will apply to most military I Between October 2004 and September 2010 stationed in Hawaii. the MHPI added 17,169 housing units to the In 2016, the BAH for the most junior enlisted housing stock in Hawai`i.36 During 2004-2005, personnel on O`ahu ranged from $1,959 (without I the 9,250 new units constructed by the military dependents) to $2,613 (with dependents). For accounted for 61.3 percent of the state's new the highest-ranking military officers, BAH was housing units for that period. Similarly, of the between $3,447 (without dependents) and 12,821 units added to Hawaii's housing stock in $4,161 (with dependents). Three points of I 2007-2008, 7,675 were built as a result of MHPI comparison deserve attention here. projects (59.9%). The final 244 MPHI units built in 2010 accounted for just 6.3 percent of the new I units built that year. There are several summaries of unit production I under the MHPI. The number of units to be produced differs from source to source and from year to year. Regardless of the source, however, I 37 http://www pressreader.com/usa/honolulu-star- ss Living Hawaii How Military Policies Drive Up Rents on advertiser/20160111/281509340177725/textview; Oahu. Eric Pape. Civil Beat, June 17,2015 http://www civilbeat.com/2015/06/living-Hawaii-how- 36 MilitaryHousing Privatization, op.cit, downloaded March military-policies-drive-up-rents-on-O'ahu/ 20, 2016 http://www.acq osd mil/housing/state hi.htm. 38 https//www dmdc.osd.mil/appj/dwp/dwp_reports.tsp I Hawaii Housing Planning Study,2016 Page 41 ©SMS,Inc December,2016 Il Table 30. Basic Allowance for Housing, 2000-2016 J Hawaii Basic Allowance for Housing (BAH) Lowest Ranking Enlisted (E-1) Highest Ranking Officer(O-7') Without Dependents With Dependents Without Dependents With Dependents ri 2000 $721 $871 $1,479 $1,705 2001 $794 $1,031 $1,739 $1,816 2002 $801 $1,113 $1,887 $2,010111 2003 $917 $1,279 $2,093 $2,277 2004 $917 $1,315 $2,139 $2,408 2005 $1,161 $1,698 $2,436 $3,127 2006 $1,355 $1,768 $2,724 $3,388 2007 $1,491 $1,925 $2,860 $3,419 2008 $1,669 $1,985 $2,824 $3,455 2009 $1,555 $1,949 $2,686 $3,401 2010 $1,572 $2,001 $2,799 $3,201 2011 $1,512 $2,016 $2,988 $3,549 2012 $1,461 $1,860 $2,964 $3,423 2013 $1,680 $2,172 $3,204 $3,933 3 2014 $1,956 $2,607 $3,684 $4,218 2015 $2,190 $2,922 $3,858 $4,347 2016 $1,959 $2,613 $3,447 $4,161 Source: Department of Defense, Defense Travel Management Office, downloaded from http://www.defensetravel.dod mil/site/bahCalc.cfm, 3/3/2016. il First, it seems that the BAH will allow military Second, it is likely that the impact of the BAH on members to pay higher rental rates than other O`ahu housing prices occurs primarily in II Hawaii residents. Based on a 2014 O`ahu neighborhoods near large military bases. In median household income of $73,581, a monthly 2016, the vast majority of military personnel on housing payment of $1,840 would be Oahu were stationed at one of four bases: J affordable39 for non-military households. Kaneohe Bay, Schofield, Pearl Harbor, or Hickam. The 2016 median rent40 for a two- The BAH is intended to cover more than monthly bedroom unit near Kaneohe Bay41 was $2,000 rents, however. BAH is calculated to include the (mean=$2,301). Near Schofield Barracks the costs of rent, refuse collection, water and sewer, median rent for a two-bedroom unit was $1,500 common area grounds, facility care, electric, gas, (mean=$1,537). Near Hickam Air Force Base and other heating costs, and renter's insurance. the median rent was $1,400 (mean=$1,507) and We might expect it to be somewhat higher than around Pearl Harbor the median rent was $1,700 contract rents paid by civilian households. With (mean=$1,742). Even the lowest level military that in mind, the BAH for enlisted personnel was personnel can comfortably afford a rental unit $117 higher than the affordable rent in 2016: not near their duty station. The BAH available to overly alarming. The BAH for enlisted personnel officers would allow them to select even larger with dependents was $773 higher than civilian rental units with more amenities. rents. At the top end of the BAH, the allowance was more than double the average local rent. j 40 https://www.rentometer.com/results/132ed2Krldw 41 Zip Code 96863. For Schofield Barracks we used Zip ss Assumes the monthly rent payment is no greater than Code area 96857, 96853 for Hickam AFB, and 96860 30 percent of monthly income. for Pearl Harbor. Hawai'i Housing Planning Study,2016 Page 42 ©SMS,Inc. December,2016 L IThird, there is a claim that the BAH has risen With respect to demand, the military presence in faster than median gross rents42 on O'ahu. Hawaii increases demand for housing and in a Figure 12 shows the average BAH for E-3 supply-inelastic market will push prices up. I through E-6 personnel alongside O`ahu median Military personnel and their dependents gross rents from 2000 to present. The dotted increased by 5 percent in 2016 and generated linear trend lines indicate that both the average the need for about 22,000 housing units in I BAH amounts and the median gross rental rates O`ahu's civilian housing market. increased over time, but the BAH increased at a greater rate. With respect to supply, military housing unit production has been greater than production in Figure 12. Average BAH, E-3 through E-6 Military the civilian sector. New units have increased Personnel and Median Gross Rents, City and O'ahu's housing stock by as many as 15,000 L County of Honolulu, 2000-2016 units. That would generally work to reduce $3,000 housing prices. L $2,500 Military price supports for personnel and dependents will push prices upward if they run ahead of the local housing market. The BAH $2,00o probably increases prices. It has increased at a.. greater rate than local housing prices at least $1,500 since 2000. After 2012, the rate of growth nearly doubled and it was not until 2016 that any ' $1,000 adjustment occurred. BAH If the planned force reductions occur, demand I Rent Amount $500 willdecrease and reduce upward pressure on Linear(BAH) price. Supply, however will continue to increase Linear(Rent Amount) according to the MHPI contracts, further $0 N M v 1D CO01 O r N M v reducing rent inflation. In additi I o on, the severity O O O 0 0 0 0 0 O 0 0000000000000000 N N N N N N N N N N N N N N N N 0 of the planned force reductions may trigger the Source For median gross rent, Decennial Census 2000, Tenant Waterfall Policy43, opening military units I ACS 1-year 2005-2006, ACS 3-year estimates for 2007- to households that are currently housed in the 2008, ACS 5-year estimates for 2009-2014. For BAH, see community. That will further alleviate demand http://www.defensetravel.dod.mil/site/bahCalc.cfm and reduce prices. I The BAH is recalculated each year based on current rental rates and inflation or cost of living increases. That means military households get I higher BAH in most years. Because they can pay more, landlords charge more, which causes the BAH to continue to climb in a cycle that Icontinues to drive rents upward. In summary, the military presence in Hawaii has important impacts on Hawai`i's housing market. 43 This policy stipulates that, in order to maintain i occupancy rates and financial viability of on-base privatized housing, the property managers have the ability to open units to households other than active duty I service members and their dependents. This may include military members who would typically live in 42 Because theyinclude utilities, gross rentsprovide a barracks, retired military personnel, civilian personnel, more reasonable comparison with BAH than do contract and the general public. 1 or asking (advertised) rents. I Hawaii Housing Planning Study,2016 Page 43 ©SMS, Inc December,2016 B. HOMELESSNESS IN HAWAII Social historians point out that low-end housing units began to disappear from housing markets HHPS first included homelessness in its list of during the eighties. We lost single-room housing issues in 2003. Originally intended to occupancy (SRO), rooming houses, dilapidated gather descriptive information, the homelessness homes, as well as temporary housing units and component is now a major part of the study. informal or squatters' housing. Units were lost to the new housing movements of the eighties -- From the start, HHPS has viewed homelessness deterioration, abandonment, destruction, as a housing issue. We followed early redevelopment, gentrification, and more stringent researchers who said homelessness grew out of regulations and codes. All worked toward problems affecting housing markets, not poverty eliminating low-end housing units, drove up the or disenfranchisement (Tucker 1991). They quality of the housing stock, and increased defined homelessness as "a housing shortage housing prices. It was about that time, during the complicated by poverty" (Wright and Lam, 1987). mid-1980s, that homelessness surfaced as a These structuralists wrote that homelessness public issue (Shlomo, 2000). was caused by the loss of affordable rental housing units and growing numbers of poor Some also believed that the plight of the poor3 people in large cities. The high rates of personal worsened at this time — that unemployment disabilities of homeless people serve as lightened their wallets, and their buying power selection factors, filtering disadvantaged persons slipped (Shlomo, 2000). The issue was not that into the homeless classification. They are not there were more poor people or that people who r/ the causes of homelessness. were not poor before suddenly became poor. Rather, low-end housing units disappeared and Later, as Point-in-Time counts became available the poor were without units to rent. and homeless shelters provided convenient, captive populations for social scientists and Another group of structuralists answered those health professions, the literature turned toward who believed that homeless persons were studies of various pathologies that existed there. homeless because they had physical or mental Main (2008), for instance, argued that policy impairments, or were dependent on drugs or makers must give greater weight to personal alcohol. Pathologies, they wrote, were more disabilities of homeless persons. prominent among the homeless because the market sorting mechanism relegated more of By the middle of the last decade, however, the them to the homeless state. But, as Wright and tide turned back to the structuralist principles. Rubin (1991) argued, "Even if there was a way to B.A. Lee et al. (2003) was the first to test stabilize the mentally ill homeless, or treat the alternative causes of homeless -- local housing alcoholic and drug-addicted homeless, or markets, economic conditions, demographic reintegrate the estranged homeless with their composition, the size of the safety net, and families and friends, almost all would still be climate, as precursors of homelessness. They poor. As poor people, they would then face the found that median rent level was the dominant same housing problem that all poor people face factor, followed by the percent of single-family — an insufficient and dwindling supply of low- households. Fertig and Reingold (2008) found income housing." that local housing and labor market conditions dominated. They recommended providing low- In Hawaii, homelessness is affected first by our income housing as a solution. Donald Linhorst high-priced, volatile, housing market with its very (2015) tested deinstitutionalization and low- high demand and inelastic housing supply. income housing shortage as causes of HHPS 2016 continues to adopt the position that homelessness. He found deinstitutionalization housing is the primary driver of homelessness was not a sufficient cause for homelessness and and that poverty and pathology are secondary called upon mental health policy makers to take issues (see HHPS 2006, 2011). That viewpoint is a lead role in developing affordable housing. also reflected in Hawai'i's primary source of housing planning, the Consolidated Plan (HHFDC 2010). Hawaii Housing Planning Study,2016 Page 44 ©SMS, Inc December,2016 L LHomelessness has recently ecome one of the There have also been changes to the general most visible issues in the State. In 2015, The approach to homelessness and the programs People's Pulse44 reported that homelessness needed to address the problem. Specifically, Lhad risen 11 percentage points to become the most programs in Hawai'I and across the nation second most serious problem facing our society have adopted the Housing First model for the (economic conditions remained the top issue). In continuum of care. Housing First posits that I the first six months of 2016, the topic was homeless persons in need of services are best prominent in the news, the focus of deliberations served by providing housing first, then services. at the State Legislature and in County Councils, I and occupied the attention and resources of The philosophy was consistent with state and county administrative agencies. homelessness as a housing problem. The two major new programs used to address Housing C Finally, Housing First policies adopted by HUD First were rapid rehousing and permanent and homeless programs across the nation are supportive housing. Rapid rehousing is an effort consistent with homelessness as a housing to provide financial assistance and services to issue. prevent individuals and families from becoming Ehomeless and help those who are experiencing 1. Definition homelessness to be quickly re-housed and stabilized. Permanent supportive housing IThe definition of homelessness has been refined provides ongoing shelter with appropriate a bit since the last HHPS. HUD has added four services for persons with higher acuity. This was categories of homelessness in its recent Final consistent with the realization that some of our Rule Defining Homeless.45 citizens have problems that will render them incapable of providing for their own shelter. 1. Individuals and families who lack a fixed, I regular, and adequate nighttime residence There were also changes to the homeless data including an individual who is exiting an system. HUD made improvements to the institution where he or she resided for 90 national Homeless Management Information I days or less and who resided in an System (HMIS)46 and Hawaii significantly emergency shelter or a place not meant for revamped the local HMIS. The improvements human habitation immediately before were applauded even though they may cause I entering that institution; minor series discontinuity. At the same time, changes to definitions, treatment theories, 2. Individuals and families who will imminently program design, and even the data needed to lose their primary nighttime residence; plan and evaluate homeless programs, are not I new. They have been a familiar part of the 3. Unaccompanied youth and families with homeless services network since the eighties. children and youth who are defined as I homeless under other federal statutes who 2. Homeless Persons and Families do not otherwise qualify as homeless under this definition; and There are two primary sources for counts of I 4. Individuals and families fleeing, or attempting homeless persons in Hawai'i. The annual Point- to flee, domestic violence, dating violence, 46 The Homeless Management Information System is a I sexual assault, stalking, or other dangerous, centralized electronic data system to which homeless life-threatening conditions related to violence service providers receiving State or Federal funds against an individual or family member. submit intake and exit data on clients they serve. HMIS includes data on those individuals who accessed some I form of homeless service, including prevention and outreach services. The Homeless Service Utilization Report, produced by the Center on the Family at the 44 http://www.omnitrakgroup.com/pdf/PulseWinter2015.pdf University of Hawaii and the Hawaii Department of 45 McKinney-Vento Homeless Assistance Act. HUD's Final Human Services (DHS), provides information on Rule implementing the new definition at 24 CFR Part 91, homeless persons served in shelter and outreach 582 and 583 Definition above reflects the changes. programs during the year I Hawaii Housing Planning Study,2016 Page 45 ©SMS,Inc December,2016 I in-Time (PIT) counts47 are gathered in an annual What sets us apart even more is the rate of21 one-night survey of homeless shelters and other growth in homelessness. Across the nation, the locations where homeless persons are known to number of homeless people has been congregate. The other source is the Homeless decreasing steadily since 2009. In Hawaii, I Management Information System (HMIS), which however, homelessness has been growing gathers monthly data on homeless persons who during that period. In 2015, only 14 states had are in shelters or are encountered at other positive homeless growth rates. Hawaii was 6th locations across the State.48 on the list behind New York, Oregon, Alaska, gil South Dakota, and Wyoming. Even the District According to the Point-in-Time Count, there were of Columbia's homeless growth rate was down in 7,620 homeless persons in Hawaii on any given 2015. night in 2015 (Table 31). The 2015 State count was up from 2014 by about 10.1 percent. All of Figure 13. Homeless PIT Count, U.S. and Hawaii, that growth was due to an increase in 2009-20153 unsheltered homeless persons (24%). In 2015, 8000 8000 Hawaii had the highest per capita rate of o 7500 — . 7500 homelessness among the 50 states – 53.7 o —Hawaii i3 persons per 100,000. N 7000 7000 N In Honolulu County, the nightly count was 5,126, E 6500 6500 0 which accounted for approximately 67 percent of = 6000 6000 m the total number of homeless persons in Hawai`I. vi55005500 N About 58 percent were sheltered and 42 percent 1 were sleeping outside. The number of homeless 500011111111 5000 r` oo CA0 ry m ct Ln persons in each of Hawai I s four counties is o 0 0 r .1 .,+ .-, .� r+ shown in Table 32. N0 0 0 0 0 0 0 0 Table 31. Homeless Persons by County, 2009- Source: National Alliance to End Homelessness, The State 2015 of Homelessness in America,2016, Figure 1.3, p.9. 1 County Hawaii Honolulu Kaua`i Maui State 2009 936 3,638 205 1,003 5,782 2010 599 4,171 273 791 5,834 2011 566 4,234 336 1,052 6,188 2012 617 4,353 402 874 6,246 1 2013 557 4,556 346 876 6,335 2014 869 4,712 378 959 6,918 2015 1,021 5,126 336 1,137 7,620 Source:State of Hawaii Homeless Point-in-time Count 2015 I 4 7 I See,for example, State of Hawai'i Homeless Point-In- Time Count 2015, State of Hawaii, Department of Human Services, Homeless Programs Office,April I 2015,fora detailed description of the methods, definitions,and results of the count. 48 See, Yuan, Sarah, Hong Vo, Kristen Gleason, and Javzandulam Azuma. 2016. Homeless Services I Utilization Report, 2016, University of Hawaii at Manoa, Center on the Family, 2015. Hawaii Housing Planning Study,2016 Page 46 I ©SMS,Inc December,2016 L ITable 32. Homeless PIT Counts, State and Counties of Hawaii, 2009-2015 Year Pct Change IL 2009 2010 2011 2012 2013 2014 2015 2014-2015 Sheltered 3,268 3,535 3,632 3,726 3,745 3,813 3,666 -0.9% O'ahu 2,445 2,797 2,912 3,035 3,091 3,079 2,964 -3.7% C Maui 422 392 394 420 421 445 505 13.5% Hawaii 321 286 229 170 160 211 220 4.3% Kaua'i 80 60 97 101 73 78 88 13.5% I Unsheltered 2,514 2,299 2,556 2,520 2,590 3,105 3,843 O 23 8% Oahu 1,193 1,374 1,322 1,318 1,465 1,633 2,162 32.4% Maui 581 399 658 454 455 514 632 23 0% E Hawai'i 615 313 337 447 397 658 801 21 7% Kauai 125 213 239 301 273 300 248 -17.3% Total 5,782 5,834 6,188 6,246 6,335 6,918 7,620 10 1% Oahu 3,638 4,171 4,234 4,353 4,556 4,712 5,126 8 8% Maui 1,003 791 1,052 874 876 959 1,137 18.6% Hawaii 936 599 566 617 557 869 1,021 17.5% I Kauai 205 273 336 402 346 378 336 -11.1% Source: State of Hawaii PIT Counts, 2009-2015. ETable 33. Homeless Service Clients by County, FY 2008-2015 Year Pct Change 2008 2009 2010 2011 2012 2013 2014 2015 2014-2015 Sheltered 6,733 7,501 7,649 8,299 8,507 8,699 8,574 8,844 3.1% O'ahu 5,075 5,311 5,678 6,211 6,305 6,234 6,039 6,364 5.4% IMaui 1,189 1,116 1,017 1,154 1,297 1,557 1,488 1,345 -9.6% Hawaii 420 679 623 622 574 565 746 783 5.0% Kaua'i 49 395 331 312 331 343 341 352 3.2% IUnsheltered 6,777 7,506 7,997 8,266 7,804 7,415 7,608 8,030 5.5% O'ahu 4,167 4,987 5,368 5,225 4,949 4,837 4,391 4,755 8.3% I Maui Hawaii 1,446 1,293 1,163 1,580 1,407 1,328 1,488 1,384 -7.0% 763 846 1,092 1,098 1,063 832 1,401 1,514 8.1% Kauai 401 380 374 363 385 418 328 377 14.9% ITotal 12,445 13,717 14,653 14,200 13,980 13,853 14,283 14,954 4.7% Oahu 8,412 9,422 10432 9,781 9,650 9,693 9,548 10,257 7.4% Maui 2,201 2,204 2,069 2,492 2,358 2,277 2,332 2,206 -5 4% IHawaii 1,204 1,421 1,555 1,422 1,336 1,184 1,770 1,829 3.3% Kaua'i 618 670 597 595 636 699 632 662 4.7% I Source: HMIS, Homeless Service Utilization Report,2009-2015 I I I Hewer'Housing Planning Study,2016 Page 47 ©SMS,Inc December,2016 I 3. Homeless Persons Served b. Characteristics According to Hawaii's HMIS, our homeless In general, homeless persons and families are services programs served nearly 15,000 somewhat less established or advantaged than3 unduplicated individuals in 2015. HMIS counts the general population. They are younger, less persons seeking services needed to deal with likely to be married, have lower incomes, and are their homelessness. So, while PIT counts tell us somewhat less likely to be employed full-time. J that there were 7,620 homeless people in the HMIS data show their number to include more State on a given day during the year, HMIS tell males than females (57% vs. 43% in 2015). us there were 14,954 persons who were ] homeless during the year (Table 33). Table 34 presents the 2015 data on the ethnic background of homeless persons in Hawai'i. The a. Numbers two largest groups represented in 2015 were Caucasians and Hawaiians or Part-Hawaiians. The number of individuals served by homeless Based on the rate of homeless persons per service programs statewide was up about 4.7 1,000 members of each population, Marshallese percent over 2014, following a 3.1 percent and other Micronesians contributed3 increase the year before. The increase was less disproportionately to the number of persons than the 10 percent we saw in the PIT counts, served that year. but was consistent with the pattern that has Table 34: Ethnic Background of Homeless Ir characterized homelessness in Hawaii for the Persons, FY 2015 past decade Homeless Pct. of Rate I Statewide, homeless service programs served Ethnicity persons, 2015 Pop. per 14,954 individuals. Among these, 42 percent Num. Pct. 2015 1,000 were people in families and 58 percent were Caucasian 4,378 29 3 44.3 6.9 I unattached individuals in 2015. The numbers Pacific Islander 7,609 50.9 27.2 19.5 have been rising since 2009 and increased by Native Hawaiian 4,554 30.5 21.6 14.7 3.6 percent between 2014 and 2015. In the City Marshallese 877 5.9 0.5 119.3 I & County of Honolulu, there were 6,364 Other Micronesian 1,361 9.1 1.1 90.4 sheltered persons served in 2015, up 5.4 percent Other Pac.lslander 817 5.5 4.0 14.3 since 2014. Asian 1,497 10 0 67.8 1.5 I FilAbout 47 percent of services were delivered to Other 821 5.5 25.8 2.2 .1 8,030 unsheltered homeless persons. Roughly Other Asian 676 4.5 3.7 5. 28 percent of those were in families, and 72 Black 827 5.5 3.7 15.53 percent were unattached individuals. The Native American 267 1.8 2.9 6.5 Other 376 2.5 1.8 14.6 numbers have been relatively stable since 2009, Total 14,954 100 100 14.6 but increased by 5.6 percent in 2015. Source: Homeless Services Utilization Report, 2016, p. 5; ACS 2015, Table 602019 for populations; Ethnicity alone or The general pattern of PIT count and HMIS in any combination by selected groups. statistics were very similar between 2011 and 2015. Numbers have been rising and began HMIS also gathered information on the living rising at a faster pace after 2013. situation before homeless people enter shelters (Figure 14). More than 60 percent of them were I on the streets (unsheltered homeless persons) before they entered the shelter. I I Hawaii Housing Planning Study,2016 Page 48 I ©SMS, Inc December,2016 I Figure 14. Location Before Entering Shelter, 2015 The HHPS defines hidden homeless persons as those who are doubled up for economic rather than social or familial reasons. We exclude 14% households sharing accommodations because they prefer to live as extended families. 16% ■Unsheltered The method of estimating the number of hidden •Institutional homeless is complicated and based on several ■ Doubled up Housing Demand Survey questions. Most ' 63% 7% I1 other important was the question: "Is there anyone living in your home who would like to move out but does not have the resources to buy or rent their own place?" Respondents who answered About 16 percent of sheltered homeless people affirmatively were asked how many individuals in came directly from standard housing situations. the household fit that description. Results are Nearly all of those were doubled-up with family shown in Table 35. or friends. In the City and County of Honolulu, 2015 counts Of the 14,954 homeless persons served in 2015, for hidden homeless and at-risk50 of L HMIS tells us that 5,717 (38%) were newly homelessness were 26,562 and 96,818 homeless this year. The remainder were either households respectively. The number still in the program from last year or had been decreased since 2011 by about 0.6 percent and housed and then returned to the homeless state. 3.4 percent, respectively. Of those 5,717 newly homeless persons, about In all four counties, hidden homeless and those ' 63 percent had been living as unsheltered at risk of homelessness were more likely to be homeless persons. Smaller proportions had people who were younger, non-Asian, relatively been doubled up (16%) and 14 percent had recent arrivals to our state, and persons with been housed in other public institutions (prisons, fewer economic resources. The at-risk group hospitals, shelters, etc.). included a disproportionately higher number of Many homeless persons provided a zip code for individuals who had been in Hawaii less than 10 their former residence. Using those data, we years. As expected for households with hidden estimated that 615 homeless households came homeless, the average size of the households directly from an out-of-state location to become was 4.5 persons statewide. homeless in Hawai'i (about 4% of all homeless persons).49 Hidden homeless households were once again likely to be living in units owned by a member of 4. Hidden Homeless the household. That is, it was more common to be doubled up with family members than with According to the U.S. Census, doubled up unrelated individuals. This should not be taken households are households in which more than as evidence that hidden homeless households one family shares accommodations. That are financially more stable than other includes multigenerational families (two or more households. In 2015, we again found that more hidden homeless respondents wanted to move in families or groups of persons related by birth, the next five years (43.4% compared to 30%). ' marriage or adoption) and unrelated families Further, hidden homeless households had lower (two or more families or groups whose members income per household member and were less are not related by birth, marriage, or adoption). ' 50 Households in which members would become homeless 49 3,077 newcomer households provided a valid zip code in less than three months if they suddenly lost their for their former residence. 10 76 percent of these primary source of income. Also called "precariously provided zip codes from outside the State of Hawai'i and housed," these people are three monthly paychecks 10 76 percent of 5,717=615. away from homelessness. ' Hawai'i Housing Planning Study,2016 Page 49 ©SMS, Inc December,2016 I likely to have incomes in excess of $25,000 per percent of Hawaii households reported that 3 person (45.3% compared to 22%). losing three or more paychecks in a row would force them out of their homes without recourse. 5. Risk of Homelessness That was lower than the 24 percent recorded in 2 2011. Those households were then asked what In 2016, demand survey respondents were also they would do if they were forced to move out of asked how long they could stay in their current your homes. Results are shown in Table 36. residence if they were to lose their primary source of household income. About 20.9 Table 35. At-Risk and Hidden Homeless Households, State and Counties of Hawaii, 2016 At-Risk of Homelessness Hidden Homelessness Households Not at risk Households at risk Not Hidden Homeless Hidden Homeless of homelessness of homelessness Households Households Hawaii 78.4% 21 6% 95 0% 5.0% Honolulu 80.1% 199% 94.1% 5.9% I o Kauai 74.4% 25.6% 94.0% 6.0% U 1 Maui 76.1% 23.9% 94.2% 5.8% State 79.1% 20.9% 94.3% 5.7% Source: HHPS Demand Survey,2016. Table 36. Expected Condition if Forced to Move Out of Housing Unit, by County, 2016 County ii; Hawaii Honolulu Kaua`i Maui State 1. Would be homeless, unsheltered 21.6% 19 9% 25 6% 23.9% 20.9% J 2. Would seek help from family,agencies 22.4% 24 8% 25 4% 26.3% 24.7% 3. Would depend on other resources, persons 34.3% 30 3% 31 2% 34.7% 31.5% 4. Don't know what I would do 21.6% 25.0% 17 8% 15 1% 23.0% Source: HHPS Demand Survey, 2016 3 Other respondents were confident they would home was a possibility, but said they did not get help from family and friends, or from know where they would go or how they would government or private agencies. They might handle the situation. temporarily need shelter or financial assistance, but they would not become homeless People classified as at-risk of homelessness were paying low rents or had no mortgages. A third group told us there was no way they Many were already doubled up or expected to be would become homeless or need assistance. doubled up the next time they move. Often, they They said that losing the income of the chief were "less established" single parents, members I wage earner would not mean they couldn't stay of unmarried couples, or had very young in their housing unit. They had other resources, children. They included disproportionately high including savings, investments, or other real numbers of widowed and divorced persons, and estate they could use. more of them were found in counties other than Honolulu. The last group said they did not know what they would do. They did not deny that losing their Hawaii Housing Planning Study,2016 Page 50 I ©SMS, Inc December,2016 L LTable 37 shows the statewide percentages for Homeless households flowed into the homeless hidden homeless and at-risk of homelessness population from one of four sources. households as reported in HHPS since 1992. L There were 450,299 households in Hawaii in Table 37. At-Risk and Hidden Homeless 2015. About 96,818 (20.9%) were at risk of Households, State of Hawaii, 1992-2016 becoming homeless. About 5,163 of those Hidden Homeless Households at risk households were admitted to the system last Households of homelessness year. That would be equivalent to 5.3 percent of 1992 4.7% 29.7% households at risk. Perhaps that puts some perspective on the high number of households at 1997 6.8% 18.1% risk we have seen in the past. 2003 4.2% 12 7% 2006 4.3% 19.6% Another stream begins with 43,732 persons, or 2011 6.3% 24.3% an estimated 31,821 households, living in group 2016 5.7% 20 9% quarters in 2015. Some group quarters I Source HHPS 1992, 1997, 2003, 2006,2011, and 2016. institutions such as prisons, hospitals, nursing homes, and foster homes release clients who have no place to live at the time they are 6. Homeless Strategy released. In 2015, there were 738 such persons LAfter reviewing homeless data from the Census recorded in the HMIS. That was about 2.3 andpercent of the total group and perhaps 4.9 ACS, HUD PIT Counts, Hawaii HMIS, and percent of the system caseload for the year. 1 HHPS 2016, it was clear that we had no shortage of data on homelessness in Hawaii. There were 24,911 migrants from outside the Our objective for 2016 was to put some broader state last year. We estimate that might be about context to these numbers, to link them together 6,643 households. Of those, 615 persons in 369 I in a system that might assist planners in households entered the homeless system. That developing needed units estimates for housing was about 2.4 percent of the in-migrants and 4 first programs. The system flowchart in Figure percent of the people receiving homeless 15 may provide a starting point for that effort. services in 2015. Again, the perspective is valuable. We had heard from some The object at the center of the chart is the group stakeholders that there were zero immigrant I of homeless persons who received services from homeless persons in the Hawaii system. Others the State's homeless services providers in 2015. felt that more than 50 percent of our homeless They were 14,954 individuals in 10,014 clients were from outside the state. Ihouseholds who were served by HMIS that year. I I I I L I Hawaii Housing Planning Study,2016 Page 51 ©SMS, Inc December,2016 I i¥ 7 I ± ) m c CA { { $ II \ 7 [ 3 § E � 7 {a ) ® $ § _ < a& \ f \ � o < ° AL° R * » $ . Q & - an \ » s ! m " 0 a { / \ § *@ � � � � � . - � o - • C1, \ \ 0 - � 2 0 ! \ a (@ J _ k \ k / &� ) \ E 0 7 7 E , oa f t D t. 0 &� s � / In o - — Tu ) \ \ / � ` c » � ® .0 � ® e2 k � ) £ [ v) 0- _ • §d RS a) m . 0 a) m� \ CO _ \ E \ k % HI, e\ / / �� ® � \$ � o \ \@ \k / � \ / z % � G 2 # » & o /\ o » -5 + .x 7 o � w CL \ ( 0 � k � 1212 » 3 il © \ ) } \■ 0c § Ec _ c $ & — ■ \ 664 f = = 69E �2 o 1 _� I o ° � � 7k n c { E n0_ \ cc ._ \} @ @ \ \ � �0 / a o ) t / \ to o � � f0 7 / % « R§ o 0= to cm - %22 / & 2 ` ) '-8.,-t. 0 B01 r0 2 R § 0 u = = 1�E � -C } \ ca � <- CD J § Q ( \ _ j ® »3 CI bp cu - k % \ \ — « _ $ / _ 111 _ - ) / % o \ \I If LL u Ea c 2 f 13 , R cn • E@ _ ) E ) � k a \ s_ f = fm 7> & 15 = uiA U\ \ § \ 0i JS ` 1 I I IFinally, about 8,142 individuals were either 5. About 1,027 homeless households left the continuing clients from the previous year, or system to take up residence with family and persons who had left the homeless programs friends. I and returned in 2015 The actual number of returnees was 3,362, which represents a The number of households exited to churn factor of about 23 percent. The permanent housing in 2015 is the sum of I objectives of Housing First programs include groups 2 through 5 above. reducing the treatment period for homeless people and reducing recidivism. These clients Table 38. Homeless Households Exited to I might be thought of as targets for program Permanent Housing, 2015 improvement in the near future. Households _ Number Percent I During the 2015 program year, 7,601 Total homeless households 10,014 100 0 homeless persons in an estimated 5,090 Exited to permanent housing 3,257 32 5% households exited the homeless system. That Rental with subsidy 904 27.8% Iwas about 50.8 percent of the total client load Rental without subsidy 1,253 38.5% for 2015. The objective of homeless services programs under the Housing First strategy is Family and friends 1,027 31.5% to get people housed, reduce the time it takes Permanent supportive 73 2.2% I to get them housed, and to reduce recidivism. Source. HMIs 2015, p. 12 The 2015 counts would be good benchmarks for those objectives. Homeless programs a. A Planning Application I dispersed their caseload as follows. In 2015, Hawaii Homeless Services 1. There were 7,353 homeless individuals Programs took in 5,717 new homeless I who remained in the homeless services persons in about 3,831 households. We programs at the end of the year. Over the exited 7,601 homeless persons in about course of the year, 7,601 persons were 5,100 households — about 51 percent of the I released from the system. Of those who total caseload. Among those, 4,860 homeless exited the program, 4,680 persons in 3,257 persons in 3,257 households were exited to formerly homeless households went to permanent housing. Those 3,257 households Ipermanent housing situations. That group were about 64 percent of all the homeless represented 61.6 percent of the 2015 households in the system during the year. It caseload, and 32 5 percent of those exiting was about 33 percent of the exited the system. households. U2. About 334 households moved directly into If we were to continue to exit 51p ercent of permanent housing without being assigned to the caseload each year and permanently I other homeless services programs. These house 33 percent those, we would grow the cases were the direct outcome of the rapid homeless population by 6 percent every year. rehousing programs across the State The sum of new homeless households and I recidivist households is greater than the 3. Exactly 3,184 homeless households were number permanently housed at this time. moved into permanent housing from the I emergency shelters and transitional housing If, programs. on the other hand, we chose to increase the percent of households exited from 51 to 65 percent, we would hold the homeless I4. A smaller number, 73 individuals were services caseload about even every year. exited to permanent supportive housing Alternatively, if we changed the percent exited to permanent housing from 64 to 75 percent, I we would reduce the system caseload by 3.3 Hawaii Housing Planning Study,2016 Page 53 ©SMS,Inc. December,2016 1 I percent per year. If we do both, we could • 28 units of public housing or publicly reduce the homeless services program assisted housing without services, that is, caseload by 10 or 11 per cent per year. subsidized housing; In fact, it is more accurate to say that the • 38 rental units without services and homeless services program caseload would without rental assistance, that is, standard be reduced by 11 percent in the first year. rental housing units; The success of the programs in reaching Housing First objectives would likely be • 32 occupied housing units willing and able compounded, reducing caseload by an to accept additional friends and family increasing percentage each year. On the members, that is, some capacity for other hand, the success of the program may doubling-up ; and attract new cases each year, growing the caseload and offsetting program gains. • 7 units of permanent supportive housing, Solving this planning problem is possible with housing units with substantial and ongoing the existing data, but would require dynamic services for persons with physical or modeling that is outside the scope of this mental disabilities. project. It is likely, however, that this kind of program success would generate a need for b. A Note on Funding additional housing units each year. So how many housing units would be needed? Data reported by HUD show $11.4 million for homeless services in 2015 — down 2.2 In 2015, all of the homeless households percent since 2014. Other data suggest that exited to permanent housing went into four Hawaii received notably less than the 50- types of housing units: (1) rental units without state average support for homelessness from subsidy, (2) rental units with subsidies, (3) the Federal government.51 Hawaii received units shared with family and friends (where $10.4 million to serve 7,620 homeless they will be doubled up), and (4) permanent individuals in 2016, or $1,365 per homeless supportive housing units. Assuming a similar person. By comparison, Connecticut received homeless population in 2016 and homeless $8,464 per homeless individual. A services programs that operate in a similar subsequent report52 estimated that, if manner as in 2015, and assuming an spending per person were equal for all states, adequate supply of the four types of units, the Hawaii would have received an additional forecast is straightforward. For every 100 $11,095,440 in 2016. homeless families exited to permanent1 housing we would need (see Table 38): I I 51 National Homeless Information Project. (2016) Special update: state-by-state ranking of homeless assistance "per capita" funding, March 27, 2016 at http.//www.nhipdata.org/#. ' 52 National Homeless Information Project. (2016) An analysis of the allocation of federal homeless funding, March 2016. ' Hawai'i Housing Planning Study,2016 Page 54 ©SMS,Inc December,2016 I I C. TOURISM AND HOUSING create jobs, and generate income54; and (2) if you choose the visitor industry as a way to run In 2016, we take up the relationship between the your economy, you can expect high housing I visitor industry and housing for the first time. We prices55 and other problems.56 Fitz (2006) do so at the request of both the visitor industry, showed that tourism leads to an increase in through the Hawaii Tourism Authority (HTA), second homes57, which increases property taxes I and the State and County Housing Offices who and Biagi, et al. found that higher housing prices are sponsoring the HHPS again this year. lead to issues in affordability, displacement, and gentrification.58 These research findings will not I Hawaii has a thriving visitor industry because it surprise anyone in Hawaii's visitor industry. has many amenities — a pleasant climate, scenic beauty, great beaches and water sports, good In Hawai'i, the academic literature has not I visitor products and infrastructure, a well-trained produced much on the direct impact of tourism and experienced labor force, a pleasant lifestyle, on the housing market. The popular press, on and a host culture that provides a foundation for the other hand, has recently taken up the topic. I hospitality and our Aloha Spirit. The Individually Advertised Units Study (SMS, 2014) estimated that there were 22,000 vacation The visitor industry has been Hawaii's number rental units in Hawaii. The report was one industry since replacing sugar and pineapple I production in the nineties. It provides about 54 Gunderson, Ronald J. and Pin T. Ng. 2005. Analyzing 165,000 jobs per year, accounts for a substantial the effects of amenities, quality of life and tourism on percent of the GSP and contributes $1.9 billion regional economic performance using regression I each year in Hawaii State General Excise Taxquantiles, Regional Analysis&Policy,vol 35, no. 1. and the Transient Accommodations Tax. 55 Reeder, Richard J. and Dennis M. Brown. 2005 Recreation, tourism, and rural well-being. United States Department of Agriculture, Economic Research I Most residents understand the value of tourism Services, Economic Research Report Number 7, to our economy.53 They also know tourism can August, 2005 See also Ko, Dong-wan and William P. generate low-wage jobs and is subject to the Stewart. 2002. A structural equation model of I volatility of international travel markets. A strong residents' attitudes for tourism development, Tourism Management, Vol. 23, pp. 521-530, 2002. See also, visitor industry may also bring higher population Affordable homes and tourism are election issues in growth, greater external housing demand, and Midhurst, Midhurst and Petworth Observer, (UK), April Ihigher housing prices. The whole situation can 13,2015. be exacerbated by large expenditures for 56 Carlino and Saiz (2008) used visitor arrivals as a destination advertising. measure of consumer preference for local amenities. They found: (1) amenities were linked to population and I job growth; (2) "beautiful cites" attracted more skilled What is of interest to us here is the impact of the employees; (3) growth in visitor arrivals was related to visitor industry on the residential housing market accelerated housing price appreciation, especially in in Hawaii. Do rising room rates affect residential supply-inelastic markets; and (4) local investment in I rents? Do very high visitor room rates lead to a physical amenities resulted in increased demand for visits. They saw this as evidence of a self-perpetuating loss of residential housing stock? cycle of tourist development housing appreciation. 57 Fitz, Richard G. (1982) Tourism, vacation home I 1. Traditional Relationship development and residential tax burden: A case study of the local finances of 240 Vermont towns, American Journal of Economics and Society, Vol 41, No, 4, pp. The traditional relationship between tourism and 375-385, October 1982. I housing markets starts with tourism's benefits to 58 Biagi, Bianca, Dionysia Lambin, and Alessandra local economies. Virtually all sources agree: (1) Faggian. 2012 The effect tourism on the housing tourism is a good way to turn non-economic market, in Uysal, M., et. al., (eds), Handbook of Tourism and Quality-of-Life Research: Enhancing the Lives of I assets into exports, improve the economy, Tourists and Residents in Host Communities, International Handbooks of Quality-of-Life, Springer 53 Hawai'i Tourism Authority, Resident Sentiment Survey, Science+Business Media B.V. 2012. I 2015, p 7 Hawaii Housing Planning Study,2016 Page 55 ©SMS, Inc. December,2016 I 2 interpreted by Civil Beat to claim that the majority 10,768 in 201562, or about 34 percent per year. 3 of individually advertised units were illegal.59 The Individually Advertised Units Study (SMS, The debate went on to include claims that "Some 2014) estimated that there were 22,000 vacation people complain that illegal rentals have caused rental units in Hawaii that year. VPI 2 housing prices to soar and have torn apart Supplemental Studies63 used a different method communities where residents know all their to show that Individually Advertised Units (IAU) neighbors".60 In addition to these public reaction counts may have been as high as 27,000 in 3 stories, some data appeared, noting that, "at 80 2015. percent occupancy, the average Airbnb rent in 2015 would bring in $5,900 per month." That is VPI supplemental studies show that short-term nearly 3.5 times the average rent for a residential IAUs are located in nearly all communities in 3 rental unit in 2015.61 Hawaii, suggesting that residential housing stock may have been affected. The same What concerns us here is one particular part of studies also show that the units are heavily visitor industry operations in Hawaii -- the concentrated in visitor destination areas. number of rental properties being used for short- Because regulation and permitting of vacation term rentals to transient parties. Short-term rentals is under each county's jurisdiction, 3 means rental contracts for 30 days or less. counties have differing permitting requirements Transient parties include visitors from out of and may prohibit short-term rental units outside state and over-night-or-longer interisland visitors. specific districts. 3 These types of rental units have been discussed 2. Foundational Data using a variety of names. In this report, we will 3 use the term Vacation Rental Units (VRU). Hawai'i's tourism economy has been growing VRUs include single-family detached and multi- impressively for the last seven years. Visitor family dwelling units. As used here, VRUs arrivals grew by 32.9 percent since 2009 (Table 3 include single-family rentals, multifamily 39). Throughout the period of rapid growth, the condominium rentals, and bed and breakfast pattern of visitor accommodations use remained properties. Some VRUs started as visitor relatively stable. The percent of visitors who 3 accommodations units and others may be stayed at commercial visitor accommodations transformed residential housing units. In units grew by only two percent in seven years. Hawaii, as in other visitor destination areas, The rest, (those who stayed with friends and VRUs are subject to regulations, registrations, relatives or aboard cruise ships) dropped sharply3 business taxes, and tourist taxes. In addition, in 2008-2009 and the segment was much slower like other visitor communities, there are claims to recover after 2010. that some VRUs operate illegally, in violation of 3 zoning codes or tax responsibilities. Table 39 presents data for the recovery period Regardless of the nomenclature, there is little following the Great Recession. Between 2005 doubt that the number of VRUs in Hawal`i has 62 been increasing. The Visitor Plant Inventory The Hawaii Visitor Plant Inventory is an annual count of visitor accommodations units conducted by HTA The (VPI) shows an increase from 2,438 in 2005 to study develops a list of visitor properties and then surveys them to measure the number of rooms available 59 Cooke, Sophie, Report indicated O`ahu's illegal vacation to visitors. Obtaining an accurate list of VRUs has been rentals outnumber permitted ones, Honolulu Civil Beat, increasingly difficult and VPI has acknowledged that December 24, 2014. VRU counts may be underestimated. i] 60 Riker, Marina. 2015, State, City looking to crack down 63 Individually Advertised Units in Hawaii. (SMS, 2014) A on illegal vacation rentals, Honolulu Civil Beat, March estimated the number of VRUs from rental units 10,2015. advertised on vacation rental booking sites. In 2015, the 61 Honolulu rental market: Affordable rental housing study supplemental study was published as part of VPI 2015 update, 2014, prepared by Ricky Cassiday for Following HTA's lead, we will refer to vacation rental Department of Community Services, City and County of units measured in VPI as VRU and individually Honolulu, December 30, 2014, p. 115. advertised vacation units as IAU. I Hawaii Housing Planning Study,2016 Page 56 ©SMS, Inc December,2016 1 and 2009, the number of visitor arrivals dropped growth rate over five years. Most of the growth from 7.4 million to 6.4 million (-13.4%). Between occurred before 2012 and occupancy rates have 2009 and 2015, visitor arrivals grew from 6.4 been relatively steady for the last three years. million to 8.5 million (32.9%). The recovery was Moreover, even if the traditional visitor completed by the middle of 2012 and, thereafter, accommodation unit numbers suggest some loss growth continued at a rate of 4.5 to 5.0 percent of market share to VRUs, the share of revenue ' per year. may not have been affected. Average daily hotel room rates rose from $177 to $240 during the The number of visitor parties that used traditional same period, a growth of 36 percent. ' commercial visitor accommodations units (hotels, condominium hotels, and timeshare Finally, Table 39 presents data on the median units) grew on a par with visitor arrivals -- from monthly rent for residential housing units in ' 5.3 million in 2009 to 6.9 million in 2015 (31% vs. Hawaii. The median rent rose from $1,654 in 33% for arrivals). The percent of parties using 2009 to $1,888 in 2015 -- a 14 percent growth traditional visitor accommodations units grew rate over five years. Therefore, as the post- more slowly throughout the recovery period with recession recovery proceeded, growing visitor a growth rate of about 2 percent over five years. arrival numbers were met by rising visitor rents (ADR). Residential rents grew by about a third There was a significant increase in demand for of the rate in the visitor industry. A property vacation rental units (including B&Bs). The owner considering the prospects of renting to percent of parties that used these units nearly visitors rather than residents might have been doubled between 2009 and 2015 (5.4% to convinced by the numbers. There was a ' 10.7%). The VRU growth rate was almost 8 substantial difference in what could be charged percent during the recession (2005-2009). for a room night - perhaps 3 to 4 times the local Furthermore, the growth rate for use of VRUs by residential rate. In addition, there was a ' Hawai'i's visitors outpaced the use of traditional potential for even higher rents in the future as visitor accommodations during this period. visitor rental rates grew much faster than residential rates. Hotel occupancy rates rose from 65 percent to 79 percent during the recovery for a 21.7 percent ' Table 39. Hawaii Visitor Industry Statistics, 2008-2015 2008 2009 2010 2011 2012 2013 2014 2015 %Chg. Visitor Arrivals (x1,000) 6,713 6,420 6,917 7,174 7,867 8,003 8,184 8,534 32.9% ' Number of Parties (x1,000) Percent Use Commercial Unite 2,964 2,899 3,102 3,282 3,497 3,510 3,662 3,915 35.0% 87.7 87 6 88.0 88.8 89.4 89.7 89.6 89.4 2 1% Percent Use Traditional Unitsb 82.1 82.2 82.4 82 6 83.0 82.5 81.9 80.9 -1.5% ' Percent Use VRU 5.5 5.4 5.6 6.2 6.4 7 1 7 8 10.7 98.1% Hotel Occupancy Rate 70.5 64.9 70.7 73 3 76.9 76.6 77.1 79.0 21.7% Average Daily Room Rate $201 $177 $174 $190 $205 $230 $243 $240 35.6% Average Residential Rent Rates 1,654 1,607 1,645 1,734 1,717 1,761 1,888 14.1% a. The percent of all visitor parties that used any type of commercial visitor accommodations units. Excludes those who ' stayed with family and friends and those who remained aboard a cruise ship. b. The percent of all commercial accommodations user parties that use traditional visitor accommodations units - hotels, apartment hotels,condominium hotels, hostels, or timeshare units. Sources. DBEDT, HTA Annual Reports, Rent Range Hawaii Housing Planning Study,2016 Page 57 ©SMS, Inc December,2016 1 I 3. Recent Research The solid line represents the VPI counts for3 VRUs between 2005 and 2015. The line marked This study brings new data to the subject. A set with circles is an SMS estimate of the VRU data of questions sponsored by HTA were included in from 2005 through 2013. The two points at the2 the demand survey and there was a separate end of that line (dark squares) are the number of survey of out-of-state property owners. The IAUs in Hawaii according to the supplemental demand survey queried Hawaii property owners studies conducted in 2014 and 2015. The line3 on the use of their real estate as rental property marked with diamond shapes is the number of and asked whether they rented to visitors. The visitors who reported using a VRU (including B&Bs) between 2005 and 2014. The line out-of-state property owners' survey asked represents the duplicated64 count of visitors by similar questions of a sample of owners whose place of stay. The figures include stays in more tax billing address was outside of Hawaii. It also than one type of unit while in the islands. About borrowed data from the most recent visitor 5.8 percent of visitors in 2013, for example, J research by HTA. stayed at more than one type of unit. a. Estimating VRU from Visitor Data The supplemental study estimate is a better J match than the VPI counts for visitor reports of The HTA Visitor Plant Inventory (VPI) provides VRU usage. The circle-marked line is the more historical data on accommodations units realistic estimate for IAUs. The data suggest available to house Hawai'i's visitors. Table 39 that the growth rate for VRUs may have been summarized some of the trends in VPI visitor relatively high in recent years, and that the high accommodations between 2005 and 2015. rate of growth began sometime after 2010. It Figure 13 shows the two recent estimates of the was a recovery phenomenon. number of VRUs and IAUs compared with the use of VRUs reported in HTA's Basic Data The estimated number of IAUs in Hawaii in 2015 Series, the data that form the foundation of was 27,177 as reported in VPI. As HTA noted, visitor data in Hawaii. the figure may be overestimated65 and should be reduced to 17,000. Therefore, the best estimate Figure 16. Estimated VRU and IAU Inventories of the number of VRUs in Hawaii in 2015 was Available in Hawaii, 2005-2015 between 17,000 and 27,000 units The lower 30,000 – — figure may be closer to the actual number of residential IAUs in Hawaii because online3 25,000 !i _ booking sites are including more commercial visitor rental units than they did in the past. I • 20,000 - __• _• b. Estimating VRUs from Survey Data • 15,000 -- – • ° © Two important data sources developed in HHPSJ 10,000 i 2016 were used to estimate the number of VRUs _moo/ in Hawaii. The first was the Housing Demand ,� E�, 5,000 ----------------_ - J i., G' FA A visitor party that stayed in a hotel and a B&B during their stay would be counted twice, once in the hotel Ln '.o N. oo rn o N m v in count and once in the B&B count. o o 0 0 0 c--1 –I c-1 r-+ '-I o o o 0 0 0 0 0 0 0 0 65 The Supplemental Studysuggests the estimate maybe N N N N N N N N N N N pp gg mOa•VRU users overstated, noting "Because of the lack of unique VPI VRU Inventory identifying information associated with each vacation I Supplemental IAU Inventory rental unit listed on the booking sites, it is currently not possible to identify and eliminate much of the double Source Visitor plant Inventory, 2015 and triple counting that occurs when a property is listed on multiple booking sites." I Hawaii Housing Planning Study,2016 Page 58 ©SMS, Inc December,2016 I Survey. In that survey of over 5,000 Hawaii advertised at the time Internet downloads were resident households, we asked homeowners if made; (b) the number of units not advertised on they rented rooms to visitors, if they owned online booking sites, and (c) the number of residential property other than their current unduplicated units advertised on booking sites residence, and if they rented to visitors on short— not included in the supplemental studies 67 term contracts. Units not advertised' The Out-of-State The second source was the Out-of-State Property Owners Survey shows that about 19 Property Owners Survey in which we asked percent of out-of-state rental property owners did about 1,200 out-of-state property owners a not use an on-line booking site to advertise their similar set of questions to help in estimating the properties. They would not be available to the number of VRUs they might add to the inventory. supplemental studies. Adjusted for unadvertised Combining those data, SMS developed an units, the low estimate of 21,000 units would analysis model in which the 1,200 Out-of-State increase to about 24,990 units. surveys represented about 72,639 out-of-state property owners and the 5,000 Housing Demand Units advertised on sites excluded from Survey respondents represented about 450,000 Supplemental Studies: The 2015 supplemental resident households. The results show that there study used four online booking sites: VRBO, were 45,075 units available for short-term rental FlipKey, Airbnb, and Clearstay. Those four sites to visitors in 2016. That figure includes at least accounted for 84.3 percent of the sites named by some commercial visitor rental units. The our survey respondents.68 Adjusted for the non- Supplemental Studies estimated commercial coverage factor, the new estimate for 2016 units to be about 37 percent of the total units would be 28,913 units. advertised. If we apply that figure to the 45,075 units measured in the HHPS surveys, the Units not advertised on a specific date. Not estimated number of non-commercial VRUs in all properties are advertised on the online Hawaii in 2016 would be 28,397. booking sites every day. The number of properties advertised on any given day is c. Adjusting the Estimates unknown and the supplemental surveys will likely underrepresent the total population of units. The We then considered the two important estimates HHPS survey population included all properties available: 17,000 from the supplemental studies 2015 and 28,397 from the HHPS surveys advertiregardlesssedof how. However, itmany ditimesd not they were measure the conducted in 2016. We adjusted the 2015 owners' advertising habits and provided no way supplemental study estimate to 20,714 in 2016 to adjust the VRU count. based on recent growth rates in these units.66 The locus of decision-making issue: One of We rounded the estimates to 21,000 and 28,500. the unanticipated findings of the Out-of-State Then we adjusted for differing definitions and Survey was that many property owners did not procedures. The supplemental studies measured know how their units were rented. About 55 IAU as the number of units offered for rent by on- percent of them used a rental agent and more line booking sites at a specific point in time. The than half of those had little information about Out-of-State Survey measured VRUs as the how the units were advertised, how bookings ' number of properties rented to visitors on short- were made, what types of visitors were renting, term contracts. Supplemental study estimates and what rental contracts were being made. We assumed these "unaware" respondents had would be short of the Out-of-State Survey renter profiles similar to those of property owners estimate by: (a) the number of units notI who reported rent details. That may have been s5 See for example, Stulberg, Ariel. Airbnb probably isn't driving rents much, at least not yet, FiveThirtyEight, 67 VPI 2015, p 63. August 24,2016. 68 Out-of-State Property Owners Survey, 2016. Hawaii Housing Planning Study,2016 Page 59 ©SMS, Inc December,2016 optimistic. Property managers have told us that We did only one cross sectional study, so we rental agents are more likely to rent, more likely don't know if property owners' behaviors are to list on booking websites, and more likely rent changing from survey data. Data from VPI and on short-term contracts. the Census suggest that growth in visitor use has been high and shows no sign of slowing. In summary, the estimated number of VRU properties in Hawaii available to visitors differs considerably depending on the source. The c. The Shared Economy adjusted number from the VPI supplemental studies is about 29,000 and the estimate from The HHPS Housing Demand Survey also asked the HHPS surveys is about 28,500. questions related to the "shared economy"69 as 3 part of VRU use in Hawai'i. Among all Hawaii 4. Impact on Housing homeowners, 12,337 (4.7%) rented rooms in their homes to non-family members. Of those, Estimating the impact of VRU growth requires about 2,029 (16.5%) rented rooms to visitors. that we bring two data sources together — data That would mean that the shared economy describing Hawaii's housing stock and data affects about 0.4 percent of Hawaii's housing describing the visitor accommodations inventory. units. That is consistent with sharing data Reconciling the two was a challenge available from Airbnb. They report that more than 75 percent of Airbnb's Honolulu clients rent J the entire property. a. Housing Unit Counts In 2015, there were 532,413 housing units (up d. Impact on Residential Rents 2.4 percent since 2010), and 477,293 available Some studies have suggested that there is a to the local resident market (up 0.7% since relationship between greater use of vacation 2010). The housing stock has not been growing rentals and higher housing prices. The National as fast as the total housing units recently. Association of Realtors (NAR) blogs that VRUs There were 51,120 vacant units not available to increase rents, decrease affordability, and draw residents in 2015, and that was up 19.9 percent developers' attention to the top of the market. since 2010. Most of those (35,197) were units Local researchers report that VRUs exacerbate held for seasonal, recreational, or occasional use the affordable housing problem by reducing our (up 9.0 percent since 2010). Growth in the housing stock and driving up rents, which in turn inflates demand for investment properties at the components that include visitor units occurred 7° primarily after 2010, again suggesting it was a high end of the market. 76 phenomenon. Figure 14 brings together some foundation data for visitor and residential rents in Hawaii over b. Units Used for Visitor Rental the last nine years. For the visitor data, we took the average daily room rate (ADR) for all Speculation is that the increase in visitor arrivals, the slow growth of the visitor plant, the pressure J of visitor demand for units in the community, and 69 Forbes. (2016). Also called collaborative consumption the advance of Internet booking sites decreased or the peer economy, owners rent out something they the size of the residential housing stock. The are not using, such as a car, house, or bicycle to a HHPS surveys found that there were between stranger using these peer-to-peer services. 28,500 and 29,000 housing units being rented to http//www forbes.com/pictures/eeji45emgkh/airbnb- visitors on short-term contracts in 2016. snapgoods and 12 more pioneers of the share ' eco no my/#3608f0f97226 70 Usborne, Isis and Benjamin Sadoski 2016. The hidden cost of hidden hotels: the impact of vacation rentals in Hawaii, in UNITE HERE Local 5, May, 2016, p.8 Hawaii Housing Planning Study,2016 Page 60 ©SMS, Inc. December,2016 I , I Icommercial properties." Figures shown here are We did, however, compare residential contract six times the ADR to accommodate the scale of rent rates in different neighborhoods. If tourism the graph. The graph compares the six-day rate affects resident rents then we might expect I with the monthly rate for residential housing. differences across geography. Specifically, The objective was to compare rates of change neighborhoods nearer resort developments over time. For the residential figures, we chose might have higher rents and faster growth than in I the contract rent rates for all rental units in the neighborhoods that are more distant from resort State.72 We added the hotel occupancy rate as areas. Neighborhoods farther from resorts might a rough demand indicator. not be affected by hotel room rates. Figure 17. Hawaii Visitor Room Rates and We identified zip code areas with major resorts Resident Rates, 2008-2016 and labeled them "visitor destination areas" I $2,500 - 100% (VDA) Other zip codes were categorized as "other, residential". �� - 80% $2,000 The City and County of Honolulu has the highest I `°'zi - 60% average monthly resident rent ($2,261), the $1,500 v highest rental growth rate (26.1%), and the highest six-year rate of growth in ADR (47%). I 4e" cc - 40% E Other than those observations, strong patterns �' $1,000 o are not revealed in the marginal data and the 3 - 20% rankings of the other counties are different for I each of the variables in Table 40. c $500 IIIIII 0% °C o 0 0 N mr-i .1 ul t.° However, the relationship between rents in I o 0 0 0 0 0 0 0 0 neighborhoods near resorts and those further Average 6-Day Room Rate away is the same in all four counties. In all Residential Rent Rate counties, residential rent rates in VDAs are higher than rents in other neighborhoods. In Source: Hospitality Advisors; Rent Range 2016 figures every county, rental growth rates were higher in are for first quarter only. VDAs than in other neighborhoods. Across all I counties, the VDA rental growth rate was always During the Great Recession, visitor rates fell and much closer to the ADR growth rate was the resident rents were stable. After 2009, rents in case for non-VDA neighborhoods. The results the residential market rose steadily at a rate of are consistent with the proposition that t about 3 percent per year. Visitor rates also rose, increasing residential rents are related to but at a faster rate than resident rates. Some increasing visitor rent rates in Hawaii. observers have interpreted the 2015 drop in visitor rates as a "leveling off' of ADR. First quarter 2016 data suggest it may have been an anomaly. IThe fact that any two data series rise at similar rates does not mean they are causally related, of course. Proving that would require a more Icomplex econometric analysis - one that is beyond the scope of this project. 71 DBEDT Data Book 2015 includes rates for hotels, condo hotels, and timeshare units We used Hospitality Advisors reports for 1st quarter 2016 estimate 72 Rent Range, average monthly rent for all rental units. I Hawai'i Housing Planning Study,2016 Page 61 ©SMS, Inc December,2016 j Table 40. Residential Contract Rent for Visitor and Non-visitor Areas by County, 2010-2015 IIII Average Monthly Residential Rent %change in ADR, Geographic Area 2010 2015 %Change 20.10-2015 ill Hawai'i County $ 1,281 $ 1,502 17.2% Visitor destination areas $ 1,438 $ 1,760 22.4% 24.4% Other, residential areas $ 1,217 $ 1,427 17.2% 1 Honolulu County $ 1,793 $2,261 26.1% Visitor destination areas $ 1,987 $2,563 29.0% 47.0% Other, residential areas $ 1,757 $2,205 25.5% I Kaua'i County $ 1,407 $ 1,700 20.9% Visitor destination areas $ 1,397 $ 1,741 24.6% 41.7% Other,residential areas $ 1,414 $ 1,669 18.1% I Maui County $ 1,709 $ 1,753 2.6% Visitor destination areas $ 1,824 $ 1,935 6.1% 39.9% Other, residential areas $ 1,644 $ 1,651 0.4% I ADR=average daily room rent. Sources: Rent Range and Hospitality Advisors I I I I I I I I I 1 Hawaii Housing Planning Study,2016 Page 62 I ©SMS,Inc December,2016 L D. SPECIAL NEEDS HOUSING IN HAWAII or not in the labor force.73 Persons with substance addiction were more likely to be Beginning in 2011, the HHPS identified housing- unemployed than employed full- or part-time.74 L related issues among persons belonging to eight Victims of domestic violence missed twice as special needs populations in Hawaii. Many many workdays than average employees. members of special needs populations live in Those who had been abused were absent from I existing households and are cared for by family work for an average of 7 days at a time.75 For members. They may receive some public part-time employees, this resulted in a services in the process. Others are housed in considerable loss of income. I residential service programs or other group quarters. These persons usually require Persons exiting incarceration were at a substantial levels of service delivered onsite. As considerable employment disadvantage. Many I such, persons with special needs may create had less than high school diplomas, lacked demand for housing that is separate from, and in adequate job training or work experience, and addition to, the rest of the residential housing often suffered from physical disability or mental I market. illness. There was also a bias against hiring former prisoners. As a result, it was difficult for Populations with special needs include: exiting offenders to obtain steady work at pay rates high enough to afford market-rate rents.76 I • The elderly (age 62 and older) and frail elderly (elderly with physical or mental limitations that Though most of them do not require support in Emay interfere with their ability to independently daily living, exiting offenders without the perform activities of daily living) economic means to secure housing will move • Exiting offenders into transitional housing. Transitional housing for • Persons with alcohol and/or other drug addiction exiting offenders often provides substance abuse • Disabled persons treatment, reintegration counseling, and support I • Persons living with HIV or AIDS services that encourage adherence to terms of • Persons with severe mental illness release and promote successful reintegration • Victims of domestic violence I • Emancipated foster youth into the community. Young adults who exit the foster care system 1. Demand for Special Needs Housing cannot usually depend further on their foster families and most need to secure their own Persons in one or more special needs housing when they age out of the foster system. populations often experience challenges in There are state and federally funded programs to r obtaining or retaining housing. Low incomes, facilitate transition from foster care to high need for supportive services near or in the independent adulthood. However, young people residential context, and the temporary nature of exiting foster care are less likely than average to I much of special needs housing may impede have a high school diploma and many have special needs persons from securing adequate affordable housing. I 73 Substance Abuse and Mental Health Services Administration (2014).Behavioral Health Barometer, Hawaii a. Economic Barriers to Accessing Housing " Substance Abuse and Mental Health Services Administration, Results from the 2013 National Survey on Drug Use and Health.Summary of National Findings. Persons in special needs groups are often ,5 Rothman, Hathaway, Stidsen, & de Vries (2007) How unable to afford adequate housing due to low employment helps female victims of intimate partner violence. Journal of Occupational Health Psych, 12,p 136 rates of employment or employability. For 76 Urban Institute Justice Policy Center(2008). Employment After I example, more than 90 percent of persons in Hawaii who were served by the Public Mental Prison A Longitudinal Study of Releases in Three States. October,2008 http//www.urban org/sites/default/files/alfresco/publication- Health system in 2013 were either unemployed pdfs/411778-Employment-after-Prison-A-Longitudinal-Study-of- IReleasees-in-Three-States PDF Hawai'i Housing Planning Study,2016 Page 63 ©SMS, Inc December,2016 I difficulty finding employment that would qualify c. Special Needs Housing is Often them for market-rate rentals." Temporary b. Need for Special Services If a person with special needs is able to secure3 affordable housing with access to needed Although public housing, Section 8, and other support services, the challenge shifts from similar housing support programs help to becoming housed to staying housed. mitigate the economic-barriers to accessing Housing in residential service programs - from housing, many special needs persons may need domestic violence shelters to prisons - is, by its access to support or treatment services nature, temporary. After a designated period, delivered at or near their residence. persons in most special needs housing are Frail elderly, persons with advanced terminal expected to move into permanent housing. If illness, severe mental illness, or severe physical they have not secured a permanent residence at disability may be unable to live alone due to an another location, they must continue to pursue inability to perform activities associated with daily temporary housing options or risk homelessness. living. The inability for some persons to live Further, many agencies that provide supportive independently results in the need for shelter in temporary housing to special needs groups are group quarters or facilities that provide daily funded by private donors or government living support and that can provide or facilitate 3 programs. They can provide housing support access to necessary medical treatment. only as long as their funding exists. As an Similarly, persons with substance addiction will example, in 2016, the Department of HousingJ often enter residential facilities where treatment and Urban Development (HUD) cut funding to and counseling are integrated into the residential programs that provide temporary or emergency context. During long-term residential treatment, shelter services across the country. The cuts an addicted person will go through the course of were the result of a reconfiguration of funding treatment for addiction as well as receive allocation that places greater emphasis on the counseling, job training, and other support provision of permanent supportive housing for services.78 Upon the completion of residential homeless persons. In Hawaii, eight programs treatment, persons recovering from substance that provide transitional or temporary housing to of addiction may move into sober houses, many of3 specialsneeds groups had funds longer t be able to which are expected to be transitional in nature. programs y operate. Others must find other funding Victims of domestic violence require shelter that mechanisms in order to continue to provide provides protection from abusers and that special needs housing assistance. facilitates access to childcare services, financial and employment support services, and d. Special Needs Persons in Need of counseling. Housing Estimating the number of persons in special needs populations who need housing is j challenging for a variety of reasons. li First, even if we have a population estimate for a " Hawaii Kids Count(2012). Issue Brief. Improving Outcomes for special needs category, there is rarely any count Youth Transitioning Out of Foster Care of persons in that category who need housing. http//www.yeshawaii.org/wp-content/uploads/2015/09/TUES- HawaiiKidsCountBrief.jpg 78 National Institutes of Health, National Institute on Drug Abuse 79 Nakaso, D (May 20, 2016). HUD cuts funds to programs for (2012) Principles of Drug Addiction Treatment. A Research- homeless with HIV/AIDS, mental illness Honolulu Star Based Guide(3rd ed) Advertiser Hawaii Housing Planning Study,2016 Page 64 ©SMS, Inc. December,2016 L LU.S. Census estimates of the frail elderly and Table 41. Special Needs Group Sizes persons with disabilities say nothing of housing Special Needs Group Number Source need (all such persons are sheltered in existing (Statewide) Persons Lhouseholds) and breakdowns of the group Elderly-Related lilt quarters population are unpublished. Elderly(60+) (2014) 316,555 2014 ACS Elderly(60+)with any • L Second, many agencies that provide services for Disability(non- 94,776 2014 ACS persons with special needs are not required by institutionalized) (2014) contract or charter to provide housing. The result Elderly(60+) living alone 53,689 2014 ACS (2014) w is that service agencies may be unable to Age 65+receiving Aid to provide accurate information on housing needs Aged, Blind& DisabledHawaii DHS Data within their target populations. In fact, unless (average per month) 915 Book 2015 housing is specifically listed among information Substance-Abuse Related and referral services, these agencies cannot Substance abuse Judiciary Report provide evidence on the number of their clients offenders in treatment 4,336 to Legislature who actually receive housing services. programs(2014) 2016 Session Substance Abuse &Mental Health Third, co-occurring disorders are common Persons with Substance 37,221 Abuse(2014) Services Admin Behavioral Health among persons with special needs. In one study, Barometer, I 40 percent of persons with mental health Hawaii 2014 problems also report substance use problems.80 Domestic-Violence Related About 65 percent of incarcerated persons meet Domestic Violence Hawaii DHS Data the diagnostic criteria of substance abuse.81 Victims/Survivors Served 7,338 Book 2015 E Victims of domestic violence are more likely than (2012) average individuals to have HIV, severe mental Domestic Violence Hawaii DHS Data Victims/Survivors 769 Book 2015 I health difficulties, or substance dependence, provided Shelter(2012) stemming from their abuse.82 Summing housing Family members of need across all special needs populations is Victims/Survivors 648 Hawaii DHS Data Book 2015 likely to inflate an estimate of housing need. provided Shelter(2012) Number of Bed Nights for Victims/Survivors and 42,576 Hawai'i DHS Data Finally, many special needs persons are Book 2015 family members(2012) homeless and thus duplicated in point-in-time or CDCP, HIV other counts of the homeless discussed Persons living with 131 Surveillance elsewhere in this report. AIDS/HIV(2014) Report 2014 Substance Abuse Although there are challenges in estimating the persons with Severe ,695 &Mental Health 58Services Admin number of special needs persons who need Mental Illness(2014) Behavioral Health Baromter, housing, attempting to estimate the size of this Newawaii l 20 H 2014 I population is critical to ensuring the availability of Foster Care Children adequate funding for special needs housing Exiting because of 71 Hawai'i DHS Data support. As such, Table 41 presents some Emancipation (2015) Book 2015 I estimates of the number of persons in each special needs population. The counts are duplicated across categories and not every The table above illustrates the challenge of III person with a special need requires housing. determining the size of special needs groups and the size of the number of people currently being Substance Abuse and Mental Health Services Administration(2016) served. To better identify future needs for 81 Mental and Substance Abuse Disorders residential services with wrap-around services, a I The National Center on Addiction and Substance Abuse (2010) Behind Bars Il•Substance Abuse and America's Pnson Population. new approach needs to be developed. Ideally, 82 World Health Organization (2013) Global&Regional Estimates of this approach will correspond to the types of care Violence Against Women. Prevalence of Health Effects of Intimate facilities that are available. One example may 1 Partner Violence and Non-Partner Sexual Violence • Hawai'i Housing Planning Study,2016 Page 65 ©SMS, Inc December,2016 I be that instead of counting aged individuals as a on Hawai'i Island, one on the island of Maui, and group, we can identify the characteristics of six on Oahu. It is unclear how many beds or adults age 65+ who use the services of a vacancies for each of these facilities.85 residential care facility versus a skilled nursing3 facility, etc. Once these characteristics are "Developmental Disabilities Domiciliary Homes" grouped by type of facility, we can better are described under Chapter 333F of Hawai`i il estimate total demand. Revised Statutes-Services for Persons with Developmental Disabilities or Mental e. Inventory of Special Needs Housing Retardation. These homes provide twenty-four hour supervision or care, excluding licensed 3 In this section, we deal with the challenges in nursing care, for a fee, to not more than five trying to assess the system capacity for housing adults with mental retardation or developmental persons with special needs. We include the data disabilities. There are 42 of these facilities 1 on type of facilities and vacancies on record. statewide: one on Hawaii Island, three on Maui and 38 on Oahu. The number of beds and the 3 Eight facilities statewide offer temporary shelter occupancy rates for these facilities are for survivors of domestic violence. The capacity unknown. of these shelters vary because they have a "no "Community Care Foster Families" serve the turn away" policy meaning they will aged and disabled persons by providing housing, J accommodate as many survivors and family supervision, direct care, and management of members as necessary. Stays at these facilities resident's non-medical and medical service can last as long as 120 days. During their stays, needs. As shown in Table 42 below, there are staff members work with survivors to find an appropriate longer-term residence.83 492 homes with 1,203 beds statewide. Theseii homes serve a mix of Medicaid and private pay j A "Special Treatment Facility" is a facility that patients. Maui and Kauai have higher vacancy provides a therapeutic residential program for rates of 55 percent and 52 percent, respectively. care, diagnoses, treatment or rehabilitation Hawaii Island and Oahu have significantly lower vacancy rates of 36 percent and 38 percent, services for socially or emotionally distressed respectively.873 persons, mentally ill persons, persons suffering from substance abuse, and developmentally Table 42. Community Care Foster Families disabled persons. There are 27 facilities in the State: four on Hawaii Island, one on the island Community Care Foster Families of Maui and 22 on O'ahu. It is unclear the O'ahu MauiHawai'i Kaua'i State number of beds or vacancy level for each #of Homes 408 28 45 11 492 facility 84 Capacity(#of beds) 981 65 128 29 1203 J Medicaid Open Beds 171 16 27 7 221 "Therapeutic Living Programs" (TLPs) are a long Private Pay Open Beds 201 20 19 8 248 term (up to 6 months) residential program for Open Beds as a%of 38% 55% 36% 52% 39% Ili adults with severe and persistent mental illness, Capacity who do not need the care of a specialized treatment facility. The primary goal of the Table 43 shows the number, capacity, and program is to assist clients in meeting their basic vacancies for Adult Residential Care Homes needs until they are able to transition in to a (ARCH). more independent living option of their choice. I Support is flexible, focused, and based on 85 State of Hawaii Department of Health, Office of recovery. There are 10 TLPs statewide: three Healthcare Assurance, State Licensing Section 1 86 State of Hawaii Department of Health, Office of 83 Hawaii State Coalition Against Domestic Violence Healthcare Assurance, State Licensing Section 84 State of Hawaii Department of Health, Office of 87 State of Hawaii Department of Health, Office of Healthcare Assurance, State Licensing Section. Healthcare Assurance, State Licensing Section I Hawaii Housing Planning Study,2016 Page 66 ©SMS, Inc. December,2016 I I I Table 43. Adult Residential Care Homes, Hawaii, personalized support services designed to as of May 5, 2016 respond to individual needs. Statewide there are No. Vacancy 15 facilities with a 2400 bed capacity.89 Eighty I Homes Capacity Vacant Rate percent of the facilities and 81 percent of the ARCH I 218 964 526 53% system capacity are located on Oahu. ARCH II 4 109 85 78% I Total 222 1,093 611 56% Table 45. Skilled Nursing and Intermediate Care Facilities, Hawaii, 2016 EXP 231 1,133 620 55% Number l ARCH II- Exp 31 440 263 60% Facilities Capacity Total Exp 262 1,573 883 56% State 50 4,401 Grand Total 484 2,666 1,461 56% Hawaii 9 886 I Source: State of Hawaii, Department of Health, Office of Honolulu 33 2,828 Health Care Assurance, State Licensing Section, Updated May 13, 2016. Kauai 5 333 I ARCH I and ARCH II are intended to serve Maui 2 344 Lana`i 1 10 adults with minimal service needs, providing Source: State of Hawaii, Department of Health, Office of assistance with activities of daily living. EXP and Health Care Assurance, as of June 23, 2016 I ARCH II-EXP provide 24-hour assistance with activities of daily living. These two programs also Hawaii's Skilled Nursing and Intermediate Care provide skilled nursing services, if needed Facilities (ICF) provide types of care similar to I Statewide there are 484 licensed ARCH homes those provided by ARCH homes, but are housed offering 2,666 beds. As of the last report noted in larger facilities (Table 45). ICF provides 24- above, 56 percent of these beds were vacant. hour assistance with activities of daily living and I Vacancy rates are relatively low on Hawaii care provided by licensed nursing and Island and higher on the other three islands.88 paramedical personnel on a regular long-term Other details for the State and counties are basis. Skilled nursing facilities provide skilled I provided in Tables D-1 through D-5b in the nursing and related services to residents who appendix. require 24-hour medical or nursing care or rehabilitation services. Statewide 50 facilities Table 44. Assisted Living Facilities, Hawaii, as of offer this level of care with 4,401 beds 90 Sixty- IMay 13, 2016 six percent of the facilities and 64 percent of the Number capacity are located on O'ahu. I Facilities Capacity State 15 2,400 Table 46 shows the number of Intermediate Care Facilities for Individuals with Intellectual Hawaii 1 220 Disabilities. Statewide there are 18 facilities with I Honolulu 12 1,936 an 88 bed capacity.91 Kauai 1 100 Maui 1 144 I Source: State of Hawai'i, Department of Health, Office of Health Care Assurance, State Licensing Section, Updated May 13. 2016. 89 State of Hawaii Department of Health, Office of Health I Care Assurance, Medicare Facilities, as of June 23, Assisted Living Facilities (Table 44) serve the 2016. purpose of providing a combination of housing, 90 State of Hawai'i Department of Health, Office of Health meal services, health care services, and Care Assurance, Medicare Facilities, as of June 23, 2016 I88 State of Hawaii Department of Health, Office of Health 91 State of Hawaii, Department of Health, Office of Care Insurance, State Licensing Section, Updated May Healthcare Assurance, Medicare Section I 13, 2016 Hawaii Housing Planning Study,2016 Page 67 ©SMS, Inc. December,2016 I 2 i Table 46. Other Intermediate Care Facilities, elderly households across the state. Because Hawaii, 2016 the elderly population is almost evenly split Number between elderly (50 3%) and frail elderly Facilities Capacity (49.3%), the needed units are divided in the State 18 88 same manner. This results in 2,836 units needed for elderly households and 2,803 units Honolulu 14 67 needed for frail elderly households. Among Maui 4 21 elderly households, 5.6 percent require special Source: State of Hawai'i, Department of Health, Office of amenities92 in their home so 159 of the 2,836 Health Care Assurance, as of June 23,2016 needed units would need to include these Combining Community Care Foster Families, specialized features. Similarly, 4.9 percent of 2 ARCH, Assisted Living Facilities, SNF and ICF frail elderly households require special amenities there are 8,638 beds providing different levels of in their home so 137 of the 2,803 needed units 3 care. Because only Community Care Foster must include these features. Families and ARCH provide vacancy numbers it is difficult to determine if there are too many or Developmentally Disabled too few of this type of residential care in Hawaii. 11 Based on the results of the 2016 Housing Demand Survey, 14.5 percent of households in f. Needed Units for Special Needs Population Hawaii have a member with a physical disability. j It was assumed, therefore, that the same Acknowledging the many challenges outlined proportion of the total demand for households above in determining the number of housing (64,693) would be required to serve the units needed to accommodate Hawaii's special physically disabled population (9,381 units) As needs population, Table 46 provides the was found for elderly households, only a small estimated number of units needed between 2015 percentage of physically disabled households and 2025. (4.3%) have a need for special features in their home. Approximately 403 of the 9,381 needed Table 46. Needed Units for Special Needs units would have to include these amenities. Population, Hawaii, 2015-2025 2016 2015-2025 Persons with HIV/AIDS Require Special Needs Needed Unit Included in the special needs analysis are3 Subpopulation Population Units Amenities households in which at least one members has Elderly 137,043 2,836 159 HIV/AIDS. Based on information obtained from Frail Elderly 105,722 2,803 137 Gregory House, Hawaii's statewide HIV/AIDS1 Severe Mental Illness 58,695 housing agency, approximately 38 families per year exit their bridge housing programs into Developmentally Disabled 55,503 regular units. Between 2016 and 2020, this Physically Disabled 78,300 9,381 403 would suggest a need for 190 housing units, about 5 of which would need to be equipped with Alcohol or Drug special amenities. Several factors suggest that Addiction 37,221 HIV/AIDS 131 190 5 this needed units estimate is likely to be low. Domestic Violence Gregory House currently has 36 families on their wait list, some or all of whom are in need of Victims 7,338 Exiting Programs (prison 1,500 and housing. Further, Phocused reported 117 &foster care) 71 unsheltered homeless with HIV/AIDS so units to As noted in Table 29, there are 5,639 units 1 needed over the next ten years to accommodate 92 Such as grab bars ramps, railings, grab bars and emergency call systems. I Hawaii Housing Planning Study,2016 Page 68 ©SMS,Inc December,2016 I ' accommodate those persons would be in Information System (HMIS). The HMIS has addition to the needed units estimate. been in development since the mid-nineties and has benefitted from the national model of the 2. Recommendation HMIS at HUD. It would be ideal if HMIS could be used as a model for avoiding some of the pitfalls As the population of Hawaii continues to grow of developing the Hawaii Special Needs and age, an identification of the demand for, and Management Information System. The previous inventory of, special needs housing will become section of this report described how HMIS can more important. Even as we recognize that not be used to set objectives, make definitions, ' every individual that has a special need will monitor progress, and develop more effective require a specific housing option, over time a strategies and tactics for housing Hawaii's better tool for forecasting and tracking this people. population will be in order. With respect to measuring the size and severity Specifically, Hawaii should develop an annually of housing problems, static, ad hoc, and periodic ' updated, county-by-county, cross-agency studies such as this one have many dataset containing at least an estimated of the shortcomings. The most vexing of those number of people in special needs groups and shortcomings is that these studies do not the number of persons entering, served by, and increase the amount, value, or relevance of data ' exiting each agency (by source and destination). in the system. A comprehensive management The dataset should also include the number of information system does not have that problem. residential units (beds, rooms, apartments) We strongly recommend that the State and ' available at each agency, and the occupancy County agencies serving persons with special rate for the year. The base information would be needs begin the process of developing such a about 12 to 15 variables and experience system for Hawaii. ' suggests that number will grow according to the information needs of the system. ' A similar information system exists in Hawaii today -- the State's Homeless Management 1 Heweri Housing Planning Study,2016 Page 69 ©SMS, Inc. December,2016 I E. HOUSING AND NATIVE HAWAIIANS There were about 462,876 households in Hawaii multi-family dwellings such as townhomes, in 2016. Of those, about 73,437 (15.9%) were duplexes, condominiums or apartments. Native Native Hawaiian households.93 Approximately Hawaiian households were far less likely than 60 percent of Native Hawaiian households lived non-Native Hawaiian households to live in in the County of Honolulu and 21 percent resided condominiums (3.8% v. 12.8%). in Hawaii County Maui County was home to 14 percent of Native Hawaiian households and the Over half (54%) of all Native Hawaiian remaining 5 percent lived on Kaua'i. households owned their current residence. This was slightly lower than in 2011 (57%) but is 3 In eight of out ten Native Hawaiian households, consistent with the overall decline in the head of household had lived in Hawai'i all homeownership. Homeownership among Native their life, compared to 36 percent in non-Native Hawaiian households varied somewhat by Hawaiian households. Native Hawaiian county, with those living in Maui County having households were larger than non-Native the highest rate of homeownership (66.4%) and Hawaiian households (average persons per those in Honolulu being the least likely to own household of 3.6 v. 2.6) and were less likely than their home (49.1%). Sixty percent of Native non-Native Hawaiian households to be single Hawaiian households in Hawaii County and 59 member households (13% v. 26%). The median percent of those on Kaua'i owned their current1 household income among Native Hawaiian residence. The median monthly mortgage households in 2015 was $59,316. The median payment made by Native Hawaiian households household income among non-Native Hawaiians was $1,689, versus $1,973 for non-Hawaiian was 23 percent higher at $73,129. So Native households. Native Hawaiian households were Hawaiian households have lower median also less likely than other households to have incomes supporting a greater number of paid off the mortgage on their current residence household members than non-Native Hawaiian (19.1% v. 30.9%). households. The percentage of Native Hawaiian and non- Consistent with the findings on household Native Hawaiian households renting their current income, Native Hawaiian renter households were residence was approximately equal (39.3% v. more likely than non-Native Hawaiian renter 37.4%). The median monthly rent paid by Native households to be living in public housing (19.6% Hawaiian households ($1,352) was also very v. 12.8%). They were also more likely to be similar to that of non-Native Hawaiian recipients of Section 8 rental assistance (13.1% households ($1,391). v. 5.9%). Roughly 9,500 Native Hawaiian renter households fell into one of these two assistance Eleven percent of Native Hawaiian households categories. surveyed were living on Hawaiian Homestead Land (7,843 households). Among these Nearly three-quarters of Native Hawaiian households, one-third were also on the wait list households lived in a single-family dwelling to receive a DHHL award (2,623 households). (73.6%) versus 61 percent of non-Native An additional 13,569 Native Hawaiian Hawaiians. An additional 24 percent lived in households who did not live on Hawaiian Homestead Land were also on the wait list for a DHHL award94. 93 According to definitions used for the study, a Native Hawaiian household is one in which at least one person identified as Hawaiian or Part-Hawaiian resides The figures will not match Census or ACS data which define a Native Hawaiian Household as one in which the householder (head of household) is all or any part 94 The counts reported from the survey differ from DHHL Hawaiian The unweighted sample size for Hawaiian wait list, as the survey counted households and the wait households for the 2016 Demand Survey was 2,230. list captures all unique individuals. Hawaii Housing Planning Study,2016 Page 70 ©SMS, Inc December,2016 1 L The average household size among Native Among those planning to leave the State, 37 Hawaiian households was notably larger, 3.63 percent mentioned housing as a reason for their persons, than among non-Native Hawaiian decision. households (2.62 persons). Native Hawaiian households were slightly more likely than other When they move, 46 percent of Native Hawaiian households to be crowded (10.9% v. 10.4%) and households expected to purchase their next much more likely to be doubled up (24.8% v. home. The majority of these prospective buyers 9.6%). Similarly, a notably larger percentage of would prefer a single-family home (81%) with Native Hawaiian households than non-Native three (45%) or four (33%) bedrooms and two Hawaiian households included hidden homeless (69%) or three (19%) bathrooms. persons (14.1% v. 4.2%). On average, Native Hawaiian households In addition, the Demand Survey indicated that planning to buy their next home had $24,440 22.4 percent of Native Hawaiian households available for the down payment. This was less would be considered at risk for homelessness. than half the amount non-Hawaiian households Among non-Hawaiian households the reported having available for a down payment comparable figure was 20.6 percent. These ($59,225). A larger percentage of Native households reported they would become Hawaiian (8.5%) than non- Native Hawaiian homeless if they lost their primary source of households (4.2%) reported that they had no income for more than three months. funds available for a down payment. Hawaiian households planning to purchase their next The Housing Demand Survey included an home could afford to make a median monthly estimated 608 Native Hawaiian households mortgage payment of $1,680, while non- Native (0.8%) who are currently homeless. When asked Hawaiian households can afford to pay much where they stayed last night, 39 percent of those higher monthly housing payments ($2,643). who provided a response indicated that they slept outside or in a car and 27 percent stayed Among Native Hawaiian households not with friends or family members for the night planning to buy their next home, more than 8 out of 10 indicated that it was simply too expensive In addition, the Demand Survey results indicated to purchase a unit in Hawaii. Like buyers, many that 46 percent of Native Hawaiian households households planning to rent would prefer a would be considered at risk for homelessness. single-family home (47%) with two (34%) or These households reported they would become three (46%) bedrooms and one (49%) or two homeless if they lost their primary source of (43%) bathrooms. The median monthly payment income for more than three months. affordable for Native Hawaiian households that plan to rent their next home was $1,350 (vs. When asked how soon they planned to move to $1,377 for non-Hawaiian households). a different home, 53 percent of Native Hawaiian ' households indicated that they would probably never move (42% of non- Native Hawaiian households). Thirty percent reported that they ' plan to move within the next five years, with an additional six percent planning to move in six to ten years. When they move, Native Hawaiian households were most likely to remain on the same island (69%) and only 9 percent would relocate to another island in the State. Eleven percent of these Native Hawaiian households, however, planned to leave Hawaii when they move. Hawaii Housing Planning Study,2016 _ Page 71 ©SMS, Inc December,2016 I Table 48. Demand and Housing Preferences, households that earned 80 percent or less of the I Native Hawaiian and Non-Native Hawaiian HUD AMI (6,719 units). Approximately 9 percent Households, 2016 of the needed units would be required to house Hawaiian Non-Hawaiian Native Hawaiian households earning more than2 Households Households Total 180 percent of AMI annually. Total Households 73,437 389,439 462,876 3 Effective Demand Across the State, units needed to house Native Movers 22,422 124,740 147,163 Hawaiians were almost evenly divided between Plan to Buy 46.2% 49.7% 49.1% ownership (52%) and rental units (48%) Among Affordable the counties, slight differences were identified. j Monthly Housing Hawaii County had the highest demand for ownership units among Native Hawaiian Payment households (68%), followed by households Buyers $1,680 $2,643 $2,631 currently living on Maui (55%) and Kauai (54%). Renters $1,350 $1,377 $1,372 The demand for rental units was higher than for ownership units in the county of Honolulu (54%). Finally, we have prepared a table of needed units for Native Hawaiian households (Table 49). Statewide, of the units needed to accommodate Of the demand for 64,693 housing units between Native Hawaiian households, demand for single- 2015 and 2015, approximately 10,530 will be family dwellings was roughly 60 percent (6,191 J needed by Native Hawaiian households. The units). Again, the demand for single-family majority of these needed units were for Native versus multi-family units varied by county. Of Hawaiian households in the County of Honolulu needed units on Hawaii and Kauai, single-family J (60%). Far fewer units would be needed for homes were in highest demand (85% and 76%, Native Hawaiian households in Hawai'i County respectively). More than 70 percent of the units (20%), Maui County (15%), and Kaua'i County for Maui County were single-family dwellings. j (5%). For Native Hawaiian households in Honolulu, Roughly two-thirds of the 10,530 units would be however, only 59 percent were single-family needed to accommodate Native Hawaiian units. j I 3 I I I I Hawaii Housing Planning Study,2016 Page 72 I ©SMS,Inc. December,2016 1 1 ITable 49. Housing Demand by HUD Income Classification, Native Hawaiian, Hawaii, 2015-2025 HUD Income Classification(%of Area Median Income) I More Less than than 30% 30-50% 50-60% 60-80% 80-120% 120-140% 140-180% 180% Total I State of Hawaii Ownership Units 2,068 2,285 703 1,663 1,167 1,211 457 976 10,530 545 905 420 974 827 930 231 667 5,499 Single-Family 434 364 286 648 575 651 152 467 3,577 I Rental Multi-Family 111 541 134 326 252 279 79 200 1,922 Units 1,523 1,380 283 689 340 281 226 309 5,031 Single-Family 975 598 206 152 172 195 83 233 2,614 Multi-Family 548 782 77 537 168 86 143 76 2,417 IHonolulu 1,062 1,493 389 1,041 744 703 358 513 6,303 Ownership Units 176 473 216 567 469 517 175 308 2,901 I Single Family 96 40 119 289 246 300 104 176 1,370 Multi-Family 80 433 97 278 223 217 71 132 1,531 Rental Units 886 1,020 173 474 275 186 183 205 3,402 I Single Family 529 404 106 26 115 116 40 148 1,484 Multi-Family 357 616 67 448 160 70 143 57 1,918 Maui 344 328 108 206 201 202 32 147 1,568 Ownership Units 98 133 69 117 162 152 32 101 864 Single Family 85 116 52 91 139 129 24 65 701 Multi-Family 13 17 17 26 23 23 8 36 163 I Rental Units 246 195 39 89 39 50 0 46 704 Single-Family 132 115 39 40 31 36 0 27 420 Multi-Family 114 80 0 49 8 14 0 19 284 Hawaii 459 336 163 353 198 241 31 277 2,058 Ownership Units 171 249 111 255 179 214 0 229 1,408 I Single Family 171 176 91 238 179 185 0 202 1,242 Multi-Family 0 73 20 17 0 29 0 27 166 Rental Units 288 87 52 98 19 27 31 48 650 Single-Family 234 41 44 71 19 27 31 48 515 IMulti-Family 54 46 8 27 0 0 0 0 135 Kauai 203 128 43 63 24 65 36 39 601 Ownership Units 100 50 24 35 17 47 24 29 326 Single-Family 82 32 24 30 11 37 24 24 264 Multi-Family 18 18 0 5 6 10 0 5 62 Rental Units 103 78 19 28 7 18 12 10 275 Single-Family 80 38 17 15 7 16 12 10 195 Multi-Family 23 40 2 13 0 2 0 0 80 Source: Housing Demand Survey and DBEDT Housing Demand 2015-2025. I I Hawaii Housing Planning Study.2016 Page 73 ©SMS,Inc. December,2016 I ss I F. SUSTAINABLE AFFORDABILITY affordable housing development tool. The objective was to test the acceptability of the i The sustainable lease is of interest to Hawaii sustainable lease concept among potential housing planners as a feasible method of homebuyers over the past ten years with some producing affordable housing units that remain variation in questions each year. affordable over time. At its base, a sustainable 1 lease is a leasehold arrangement that sustains a Table 50. Sustainable Lease Considerations by property within an affordable price range. County, 2006, 2011 and 2016 Details of the arrangement are generally I Honolulu Maul I Hawaii I Kaua'i State ' developed to favor lessees who need affordable Would considera lease if housing. ...there was no downpayment 2006 66% 62% 58% 69% 66% ...there was a nominal monthly payment for the lease Sustainable leases are relevant in Hawaii for 2011 45% 52% 56% 56% 48% several reasons. First, they allow government ...there was a$50/month payment to a non-profit housing agencies to maintain units as affordable 2016 44% 48% 62% 63% 46% over long periods of time. In the past, affordable the lease term was 60 to 99 years and renewable properties were developed for sale at affordable 2016 52% 55% 100% 73% 54% wr pr0 p p 2011 51% 57% 65% 52% 54% prices but, once they are sold, the unit reverted 2006 67% 59% 59% 65% 65% to market pricing. Second, sustainable leases ...could pass the home to your heirs with new 60-99 year lease on government land can be written to reduce 2016 58% 66% 100% 80% 61% development costs, enhance availability, and 2011 52% 65% 75% 69% 58% reduce prices below the level of current market 2006 73% 66% 63% 73% 71% if non-profit would buy back house at fair ROI housing. Ground leases can be reduced or even 2016 71% 71% 100% 79% 71% isv eliminated. Down payments can be reduced or If all above were true,would buy next home sustainlable even fully absorbed in the sale. Lease prices leasehold or fee simple? can be maintained over the course of the lease Prefer sustainable lease •.' period. Third, sustainable lease agreements can 2016 15% 16% 52% 19% 16% 2011 14% 24% 29% 21% 18% be written to include features that increase the 2006 6% 16% 7% 15% 9% acceptability of leases in general, and controlled Would consider sustainable lease i property agreements of a specific nature. Past 2016 41% 37% 48% 40% 41% research has shown95, for instance, that one 2011 26% 27% 26% 32% 27% problem with the lease concept in Hawaii is the 2006 32% 23% 27% 32% 30% Would still prefer fee simple 01110 inability to pass leased property on to one's 2016 43% 48% 0% 32% 43% heirs. Sustainable leases can be written to allow 2011 59% 49% 45% 47% 55% such transfers. 2006 62% 61% 66% 53% 61% 001 Any sustainable property agreement also entails Base 2006: Asked of potential buyers who were not other limitations on ownership and resale. The interested in leasehold property, even if fee simple property was unavailable in their price range. Base 2011 and 2016: property must be owner occupied, must be sold Asked of all potential buyer households planning to back to the community, and there is usually a purchase a unit in the State of Hawaii. ceiling on the resale price. Statewide, 41 percent of prospective buyers The 2006, 2011 and 2016 Housing Demand were willing to consider a sustainable lease if no Surveys included a set of items to support the fee simple homes were affordable. This is a investigation of sustainable lease as an significant increase from 27 percent in 2011 and 30 percent in 2006. 96 This section includes the State, the City and County of Honolulu, Maui and Kauai Counties. County of Hawaii 95 Hawaii Housing Planning Study, 2006, 2011. did not participate in this section in 2016. Hawaii Housing Planning Study,2016 Page 74 ©SMS,Inc. December,2016 I LWhen survey respondents were asked about the be part of leasehold agreements described appeal of a renewable lease with terms between earlier and are frequently part of a Community 60 and 99 years, over half were willing to Land Trust (CLT) type of organization. CLTs are considering buying a leasehold property (54%). defined as nonprofit, community-based The ability to pass the property on to one's heirs, organizations designed to ensure community who would then receive a 60 to 99 year lease, stewardship of land. Community land trusts are L would prompt 61 percent of buyers to consider a primarily used to ensure long-term housing lease. affordability."97 L Sustainable lease options appealed to 46 The most popular resale restriction had 37 percent of potential buyers if they could make a percent of potential buyers in Honolulu, Maui and $50 per month payment to a non-profit. If given Kauai counties agreeing to the question: "would the option to sell their home to a non-profit at a you be willing to buy a home at an affordable I fair return on investment, 71 percent of potential price (maybe one-fourth or a third of market buyers indicated they would be interested in a price) if you knew that the home could only be sustainable lease. sold for an affordable price (maybe one fourth to a third of market value) at the time of the sale? Further analysis showed that those households This offers an alternative to renting and enables most likely to find sustainable leases appealing you to build equity and enjoy tax deductions and were the ones who most need them other benefits of homeownership." Sustainable leases appealed to more renters than current owners. They appealed to Table 51. Affordable Purchase Considerations I households that were crowded and/or doubled County up, and had strong support among households Total Honolulu Maui Kaua'i earning between 80 and 140 percent of the Buy an affordable home if... I County AMI on Oahu. On Maui and Kaua'i, there was a shared appreciation restriction interest was highest among households making 2016 28% 27% 35% 44% less than 80 percent of County AMI. Finally, .there was a buyback restriction I sustainable leases were attractive to 2016 33% 30% 44% 57% disproportionately high numbers of doubled-up •••it could only be sold at an"affordable price" households (more than one family in the 2016 37% 35 44% 60% household for economic reasons). Source. Housing Demand Survey, 2016 IThe results suggest that there is a role for the The other two options also have restrictions on sustainable lease concept in developing the sale or transfer of the property. At 28 I affordable housing for Hawaii. Leasehold percent, the least favored alternative was the arrangements can be used to produce more option to buy an affordable house with the affordable housing units and maintain them in provision that upon resale the increased the affordable housing stock indefinitely. The appreciation of the home's value would be"shared." The biggest difference between this data show that, even where leasehold property is unpopular, a sustainable lease appeals to many question and the slightly more supported buy- I potential homebuyers. Once they understand back restriction (33%) was that the more popular how a sustainable lease works, many people will option had a given time period, ten years after be willing to take advantage of a sustainable purchase, and stated that there would be a lease to get into their own homes. specific formula for establishing the resale price. EHouseholds most interested in buying an The 2016 Housing Demand Survey investigated affordable home with buy-back restrictions are other options in the County of Honolulu related toI similar in composition to those households keeping affordable homes affordable over time preferring leasehold properties. They tend to as shown in Table 50. These options included have workforce HUD AMI levels on O'ahu and buy-back, shared appreciation, and pricing :yen lower income levels on Maui and Kauai. L restrictions on the resale of a house purchased at a below-market price. The restrictions could Community Land Trusts, Community-Wealth.org. I Hawaii Housing Planning Study,2016 Page 75 ©SMS, Inc. December,2016 i When comparing all three options with resale options with management by a non-profit rather restrictions it appears that the more clearly the than the state or county. resale restrictions are stated and explained, the greater the appeal to potential homebuyers. In addition, there seems to be more support for I I I I I 3 1 1 Hawaii Housing Planning Study,2016 Page 76 ©SMS,Inc December,2016 I I ' V. PUBLIC SECTOR HOUSING RESOURCES HHPS has always assembled data on housing of Total HUD allocations for 2015 amounted to all types and across all price levels. At the same about $459.6 million and that figure was up time, the data have been most frequently and about 8 percent since 2014. The largest part of successfully applied to public sector housing the increase was due to a substantial increase in issues. In part, that is because HHPS has been the HUD Mortgage Insurance program. The total largely funded by the public sector and HHPS for 2015 was about $233.9 million, which was ' reports are published by government agencies. more than 50 percent of total HUD allocations for More important, the study has always found that the year. Furthermore, mortgage insurance housing need is greatest at the lower end of the outlays represented the largest increase in ' market. Supply, demand and needed units federal funding. Funding for the other programs estimates show that housing shortages are more that support public housing development and prominent among lower income families seeking maintenance were all similar to what they have lower priced units. It seems appropriate then been since 2011. that HHPS ends up supporting planning efforts for public sector housing. The two programs that can be used to produce ' A. HOUSING FUNDING PATTERNS or preserve housing units, CDBG and HOME funds, amounted to about $17.5 million. The level of funding has been relatively steady over One way of looking at recent housing planning the last few years. Two other programs used for ' efforts in Hawaii is to review how we spend our housing production, Section 202 Supporting housing dollars. In the public sector, funding Housing for Elderly and Section 811, Supportive comes largely from two sources: federal and Housing for Special Needs were not funded. ' state government. The USDA Rural Development funds allocated in 1. Federal Allocations 2015 amounted to $155.5 million. That was up ' 26 percent from 2014 and almost 85 percent Before 2010, federal allocations for housing in since 2010. Direct Program allocations were up Hawaii amounted to about $133 million per year 40 percent and Guaranteed Program allocations ' (HHPS, 2011). Allocations were high in 2000 were up 30 percent. and 2001, and then leveled off at about $70 million a year during the middle of the decade. 2. State Allocations With added funds from the American Recovery and Reinvestment Act of 2009, HUD spending Nationally, most housing funds spent by local rose to over $200 million a year in 2008 and government have been federal money. States ' 2009 and settled back to $161.3 million in 2010. generally do not contribute large sums to Between 2012 and 2015, expenditures grew housing development. In Hawaii, State substantially to a level of$225.6 million in 2015 allocations to housing have been substantial throughout the last decade (Table 53) A breakdown of Federal expenditures in Hawaii by program and county is shown in Table 53. We Between 2000 and 2011, the total State have included allocations from HUD and from allocation to housing amounted to about $271.5 the U.S. Department of Agriculture (USDA) Rural million or $25 million per year (HHPS 2011, Development Program. Those are two major Table 53). The allocation pattern reflected sources of funding for housing development and changes in State revenues from year to year. ' maintenance in the States. The allocations are shown for 2015 along with growth estimates The prosperity of the first two years of the last (annual percent change) since 2014. decade produced large allocations to housing. ' The post 9/11 economy saw cutbacks and the housing boom years brought larger legislative Hawai'i Housing Planning Study,2016 Page 77 ©SMS, Inc December,2016 I allocations to housing and homelessness. The revolving funds with finance housing developers. 1 Great Recession 2008-2009 brought back lower These revolving funds were also the targets of allocations. withdrawal of allocations in years when the economy was weaker. In addition, the State 3 Legislative allocations were of two types. First, appropriated General Funds to support the State issued general obligation bonds to homeless shelters and homeless services, as fund specific projects. They were usually well as public housing renovations and rent I associated with Capital Improvement Project subsidies. (CIP) appropriations for public housing and Table 52. Federal Housing Expenditures in Hawaii, 2016 I Total Receiving Agency Funding Type Hawaii State Agency Honolulu Hawaii Maui Kauai HUD Funding Total $459,550,897 $69,853,543 $241,322,807 $50,522,415 $72,313,751 $25,538,381 HUD Funding Subtotal 225,588,297 69,853,543 96,513,106 24,314,406 26,569,700 8,337,542 CDBG 12,205,032 - 7,285,838 2,491,306 1,731,191 696,697 HOME 5,313,503 3,023,348 2,290,155 - - - HOPWA(Incl.Competitive grants) 647,808 208,047 439,761 - - - I Emergency Solutions 1,095,307 439,415 655,892 - - - Continuum of Care Homeless Asst. 11,366,445 2,100,869 9,265,576 - - - PIH Programs: Section 8 Vouchers 108,365,846 26,061,912 45,679,847 16,010,021 15,019,076 5,594,990 I Section 8 Vouchers-Admin.fee 9,418,349 2,257,521 3,569,053 1,540,479 1,408,005 643,291 Public Housing Operating Subsidy 25,982,721 25,982,721 - - - - Public Housing Capital Funds 9,184,654 9,184,654 - - - - I Project-based Section 8 34,790,688 - 24,744,336 3,511,368 5,348,460 1,186,524 Other 7,217,944 595,056 2,582,648 761,232 3,062,968 216,040 Mortgage Insurance Subtotal 233,962,600 - 144,809,701 26,208,009 45,744,051 17,200,839 I USDA Rural Development Funds 155,544,466 155,544,466 - - - - GRAND TOTAL 615,095,363 225,398,009 241,322,807 50,522,415 72,313,751 25,538,381 Source: HUD Honolulu Field Office; SFH State Director Summary Reports, 2010 through 2015 Note: HUD expenditures are all listed as fiscal year 2016, although certain funds, including the Continuum of Care and Fair Housing funds are subject to a one-year lag. Table 53: State Legislative Funding for Homeless and Affordable Housing, 2010 to 2017 il Rental Rental Housing Assistance Homeless HPHA TOTAL Services Services Services Administration 2010 $ 42,047,724 $ 26,918,657 $ 19,892,074 $ 37,407,890 $ 126,266,345 2011 $ 41,225,482 $ 26,715,174 $ 15,303,607 $ 36,574,479 $ 119,818,742 I 2012 $ 44,655,887 $ 26,934,715 $ 16,894,932 $ 37,328,008 $ 125,813,542 2013 $ 43,834,159 $ 26,934,715 $ 16,894,932 $ 37,328,008 $ 124,991,814 2014 $ 45,852,118 $ 26,936,542 $ 19,617,847 $ 37,784,669 $ 130,191,176 I 2015 $ 87,111,404 $ 27,098,010 $ 20,782,667 $ 41,679,097 $ 176,671,178 2016 $ 91,748,311 $ 27,350,584 $ 20,284,312 $ 42,850,598 $ 182,233,805 2017 $ 92,048,331 $ 26,744,109 $ 30,790,151 $ 43,013,178 $ 192,595,769 Source. Budget, House and Senate approved allocations, 2016. After 2011, State allocations to housing 2014 Those first four years of the economic I continued to increase at a very low rate through recovery saw prices begin to rise and rent stay Hawaii Housing Planning Study,2016 Page 78 1 ©SMS, Inc December,2016 I Irelatively stable. The housing stock, as we have State funding for housing has been lower than noted, did not increase. federal funding, but it has increased by a larger amount in the past few years. A substantial part In response, State legislators started to increase of the increase shown earlier was appropriated to funding for housing programs in 2015. The refurbish federal and state public housing units. increases continued through 2016 and are That did not increase the housing supply. I forecast to rise again in 2017. The State legislature has been generous with State funding has reached about half the level of CIP appropriations for the Rental Housing I federal funding for housing. Perhaps more Revolving Fund (RHRF), which provides equity important, programs reporting the greatest gap financing98 to support rental housing funding increases are those that support rental development or preservation. As of June 2016, I housing development. Figure 19 presents a equity gap financing from the RHRF assisted in graphic view of the changes in State funding for construction or preservation of over 4,300 units. housing in the last decade. I There would be very few affordable housing units Figure 18. State Allocations for Housing, 2010- produced today without the full list of federal- and 2017 state-funded resources available in Hawaii. It is $200,000,000 — not unusual for a rental project to be financed by I $175,000,000 tapping several funding sources including LIHTC, $150,000,000 _ HOME (or CDBG), and RHRF. Few, if any, such projects could be produced without the I $125,000,000 — combination and cooperation of federal, state, $100,000,000and private financing. $75,000,000 I $50,000,000 The increases in both federal and state funding •—• are especially important because the costs of $25,000,000 ; i__. F .L 1 ...... ^—+ producing affordable housing are increasing. I $ Construction costs have been rising and pushing 2010 2011 2012 2013 2014 2015 2016 2017 —0—Rental Housing Services --I—Rental Assistance Services funding gaps up with them. —a—Homeless Services —TOTAL(with HMS 229) —O-HPHA Administration I In sum, federal and state funding have been Source:Table 52 rising. A substantial proportion of those federal funds are not applied to producing new units, Funding support from federal and state agencies either because they are specifically intended for I is used is for a broad range of housing activities. other purposes such as mortgage insurance or A relatively small part of federal funding can be operation subsidies. State funds have been used to increase the housing stock especially useful in providing gap funding for I affordable rental projects. We can expect a Recapping, HUD funding under the CDBG and greater need for these funds if housing HOME programs can be used to produce or production is to be increased. I preserve units, for acquisition, or provide infrastructure. Those funds amount to about 3 percent of total HUD funding in 2015 and have B. GOVERNMENT-ASSISTED HOUSING been steady over the past five years. USDA I Rural Development funds are often used to While we cannot generate an itemized list of develop infrastructure; to fund a project-based units produced by each of the federal and state rent subsidy; or to provide direct loans and loan funding programs, we know that all of the publicly ' guarantees to develop projects. While the level of funding has been high and growing in recent years, it is difficult to estimate how many housing 98 Equity gap funding is intended to cover the difference ' units may have been produced. between project costs and available sources of construction and permanent financing for affordable rental or mixed-use projects. I Hawai'i Housing Planning Study,2016 Page 79 ©SMS,Inc December,2016 assisted units developed in the past used federal county resources in years prior to 2015. and state funding sources discussed above, Government assisted units included those the government development tools, or were required government financed, developed or required of private developers for land use and zoning through the State Land Use commission, county I entitlements (e.g., unilateral agreements). The development plans, or zoning Both added units list of housing units produced with the assistance and preserved units are included in this total. of federal, state, and county resources is maintained by the Hawai'i Housing Finance and Figure 19 presents a graphic representation of 3 Development Corporation and has been updated the units produced in each of Hawaii's four for 2016. The list includes units in housing counties by year in which the units were I projects developed with any federal, state, or completed. Figure 19. Affordable Housing Units Constructed, 2000-2010 , 3,000 2,500 .. _�.__ ........ a0 'a v < 2,000 — _ 'G C 1,500 -- -- - — , o 1111111111111111 1,000 1.1 MI ' ONIMMIMI a 500 Z �OOO X001 "c' ' "I' "t' BOO^ -'' c('k 4i,"L' F,�Oy� e ��Oy� Fyff ❑City and County of Honolulu ■County of Hawaii 0 County of Kauai 0 County of Maui Source Hawaii Housing Finance and Development Corporation. Between 2000 and 2010 there were 14,548 number of units (fewer than 2,500 units) was government-assisted affordable housing units assisted by government in 2008. Production fell constructed or preserved (through acquisition or sharply in 2009 and then rebounded again in 1 rehabilitation) in the State of Hawai'i. That was 2010, which housing directors feel was the result just over 1,300 units per year. Between 2011 of ARRA funds made available for shovel-ready and 2015 (inclusive), State and county housing projects For the next two years, production was agencies added or preserved 3,812 new the lowest of the decade, with less than 500 units government assisted units or about 763 per year. per year. Government-assisted units rose to over 1,000 units per year in 2013 and 2014. The pattern of government-assisted housing Table 54 shows some additional detail for construction seems to lag private sector government-assisted housing production over production by two or three years. The largest the last 15 years. Affordable units produced I Hawaii Housing Planning Study,2016 Page 80 I ©SMS, Inc December,2016 I Iusing government funding, were mostly multi- Hawaii, 76 percent of government-assisted units family and rental units. Consistent with housing were rentals. Average annual production fell by plans across the state, affordable units about 42 percent after 2010 (1,300 units per year I constructed under federal program guidelines dropped to 763 units per year). and using public sector funding, were mostly multi-family and rental units. In the County of ITable 54. Types of Units Constructed, 2000-2010 I Government-Assisted Units Added, Government-Assisted Units Added, 2000-2010 2011-2015 Percent Percent for Percent Percent for Total Multi-family Rent Total Multi-family Rent IState 14,548 82 76 3,814 65 45 Honolulu 9,977 96 89 3,029 66 47 I Hawaii 1,131 69 76 408 56 38 Kauai 792 91 85 164 94 94 Maui 2,648 34 25 213 95 49 I Source. Hawaii Housing Finance and Development Corporation Note: Data for 2000 through 2011 were update for this report adding more than 4,500 units to the list. IThe types of units produced also changed since overview of what was scheduled in 2010 and 2010. Maui County moved toward the norm, what was finally scheduled for 2015. producing many more multi-family units for rent. I Honolulu and Hawaii counties, on the other The Consolidated Plan describes the strategies hand, produced more single-family units for that housing agencies in Hawai'i apply to ownership compared to the previous decade. manage housing issues that affect the low end of I the housing market.100 Very broadly considered, C. HOUSING PLANS, 2010-2015 the plan involved three strategies applied to four target groups. I As in all States, federal spending on housing production and assistance is distributed The three strategies were construction, financial according to formal plans. This section looks at assistance to renters and homeowners, and I State and County strategies to housing issues supportive services. Construction funds were given each of their resources and constraints. intended to produce new or refurbished housing units. They were used for construction financing, IFormal housing planning for federal funds is planning and design work, new construction, summarized in the Consolidated Plans submitted property management, funding and supporting to HUD by Hawai'i's five housing coordinating rehabilitation, and refurbishing existing units. agencies.99 Appendix Tables E-2 and E-3 Financial assistance included transfer payments I present a brief overview of the Consolidated and other services intended to increase or Plans published in 2010. sustain ownership or rental stability among low- income households. Supportive services I The summary is an oversimplification of the work provided a range of services that are generally planned by Hawai'i's housing agencies during needed by occupants, especially those with those five years. It provides a high-level special needs. I99 The full set of HUD documents designed to develop and 10° Note that Consolidated Plans include other housing plan monitor housing planning includes the Consolidated elements such as eliminating impediments to Fair I Plan, annual reports to update the Consolidated Plan, Housing. Here we deal only with the direct housing the CAPER to evaluate progress toward objectives. issues. I Hawaii Housing Planning Study,2016 Page 81 ©SMS,Inc. December,2016 I are homeowners or State and county four target groups Consolidated Plans describe prospective homeowners, low-income renters, how Federal funds are to be allocated to the special needs groups, and persons who are achievement of planning objectives summarized homeless or at risk of homelessness. All four of in Appendix Tables E-2 and E-3. these groups and their housing needs have been covered in previous sections of this report. Imo Table 55. Types of Units Constructed and Assisted, 2000-2010 Build or Rehab Financial Assistance Other Assistance Counties Objective „ii 4iiiimimminimmikowner rentals ownerownefinagitytal owner rental units units households persons persons households Homeowner 63 1 di Y '5 Low-Income Rental 12 100 3 Special Needs 61 75 5,500 i Homeless 275 150 10,780 400 mai Homeowner 100 6 j Low-Income Rental 400 50 Special Needs 150 I Homeless 255 30 3,750 250 I Homeowner 63 - 101 a: Low-Income Rental 12 100 50 V) Special Needs 61 75 5,550 Homeless - 275 180 14,530 Total 63 73 551 180 20,130 - I Hawai'i Housing Finance and Development Corporation (HHFDC)Affordable Housing Units FY 2011-5,July 25,2016. Table 56. Types of Units Constructed and assisted, 2000-2010 I Build or Rehab Financial Assistance Other Assistance kr; Counties Objective owner, __rental owner rental owner I rental units units households persons persons households Homeowner 14 1 Ng D Y S Low-Income Rental 10 20 3 Special Needs 36 15 1,136 1 = Homeless 32 610 2,265 78 Homeowner 27 3Low-Income Rental 52 1,830 185 1 0 o Special Needs 155 Homeless 50 2,348 Homeowner 14 28 Y Low-Income Rental 62 20 1,830 185 cv N Special Needs 36 170 1,136 I Homeless 32 50 610 4,613 78 Total 14 130 268 2,440 5,934 78 I Hawai'i Housing Finance and Development Corporation (HHFDC)Affordable Housing Units FY 2011-15, July 25, 2016. Hawaii Housing Planning Study,2016 Page 82 I ©SMS,Inc December,2016 I IIn 2010, the Consolidated Plans show that 1. Housing Realities heaviest use of federal funds would be aimed at services associated with housing programs. Our housing prices are high because:101 ISome 20,000 individuals were to receive services between 2010 and 2015. About 731 . geography provides little room for housing households would receive financial assistance in • we have great amenities102 and spend the Iobtaining and maintaining their housing units. most money telling people about them Finally, the plan called for construction or • we have the second highest cost of living in rehabilitation of 136 housing units, about 54 the nation Ipercent of which would be rental units. • we have the second or third highest for supportiveconstruction costs in the nation The target services was adjusted re to 5,934 persons served. Financial services � we have the most hi hl 9 Y 9 ulated housin g would benefit 2,708 households, an increase of market in the nation. 270 percent over the initial five-year plan. The number of units planned to be constructed or As a result, Hawaii also has the lowest rate of Irefurbished went from 136 to 144, and increase homeownership in the country, some of the of about six percent. Relevant to this study, the highest crowding rates, and the highest rate of new units would be 90 percent rental units. homelessness among the 50 states. IThe Consolidated Plans demonstrate how Over the years, we have reacted with housing federal government resources were used to plan policy that has led us to make heavy use of I for and provide housing and housing programs in multi-family units and leasehold residential the public sector. Most funding was used to pay properties. The Census tells us we have for financial assistance and ancillary services unusually high rates of both. Our housing stock I rather than housing construction Financial is not, however, of poor quality. The units are assistance was used to place and sustain getting older, but not necessarily run down. By families in affordable housing. Relatively few comparison to the rest of the country, the I new units were constructed or refurbished in a average unit age is low and the percentage of given year, and the large majority of those were non-standard or mobile housing units is rental units. extremely low. HHPS has been reporting for years that the most troublesome feature of IThe plans for 2010 through 2015 were not unlike Hawai'I's housing stock is a lack of units suited those of the previous five-year plan. Federal to the needs of low-income households. From funds are used primarily to facilitate housing their point of view, the quality of our housing I assistance programs, both financial and service- stock may be too high. related. A small part of federal funding, recently augmented with increased state allocations, areI Hawaii does not have high poverty rates.103 Our used to build units. household income is relatively high and so is our D. IMPLICATIONS FOR PLANNING I 101 The rich literature on this subject has recently been expertly summarized by Sumner LaCroix. See LaCroix, As noted throughout the report, Hawaii's housing Sumner New perspectives on land and housing market is unique in many ways. We were markets in Hawaii, UHERO Research Reports,January I ranked in the top five states for prices, rents, homelessness, and vacant and unavailable 27,2016. LaCroix makes the case that Hawai`i's high housing prices are not a recent phenomenon but have been high since the fifties. units. Our housing market is complicated; it 102 Weather, scenery,friendly people, cultural richness, Ichanges frequently and it is anything but normal. slow-paced living, etc. Its extremes make housing planning difficult and t03 ACS 2014 shows that 11 percent of Hawai'i Households its uniqueness makes it hard to borrow policies had income below the poverty level. In 2009, Hawaii developed in other places had the 43`d highest poverty rate among the states and I District of Columbia. Hawaii Housing Planning Study,2016 _ Page 83 ©SMS, Inc. December,2016 I average household size In 2015, Hawai'i's measures that gap.109 Gini scores are now inflation-adjusted median household income was published regularly by the Census Bureau. $73,486, third highest in the nation.104 Our Hawaii's Gini score in 2014 was .43, the same average wages are also relatively high. Hawai'i's as it was in 2010. Differences across the3 average wage in 2010 was $43,740 compared counties were negligible. The national Gini with the national average at $41,250. Our score was .45. wages were 17th highest in the nation. In 2014, the average wage in Hawaii rose to just over HHPS 2016 findings show that housing demand $47,000, while the national average pulled and supply continue to change in response to ahead to about $48,000 In 2015, median market forces, but always show the same earning per employed adult was 14th highest in characteristics that make us one of the more the nation at $34,730.105 However, when we difficult housing markets in the nation look at purchasing power (cost-of-living adjusted median households income) we find that the3 2. Housing Strategies 2015 CPS median household income for Hawaii ($64,514) is reduced to $45,200, the second0Housing planners in Hawaii have always worked lowest in the nation after New York State. The toward developing strategies that are relevant to 3 percentage difference (30% the amount by which housing market realities. Many direct median income was reduced) was the highest in approaches to the causes of our high housing the nation. 3 prices, however, are not easy to manipulate. Thus, our relatively high average household There is little we can do about the geographic income is not so much the problem as is our cost realities that limit our capacity to produce of living. Cost of living, of course, is a function of housing. the same variables as affect the cost of housing There is also not much we can do to hold back — geography, external demand, amenities, etcril the external demand created by Hawaii's Housing is only the most salient indicator of a amenities. We live in one of the most pleasant high cost economy.107 Green and Shaheen even places on the globe. It has always drawn suggest that we move from the study of income migrants seeking a better life and will likely and wages and investigate the underlying continue to do so. At the same time, this study causes of high cost of living and housing — suggests that increasing use of Hawaii's wealth and income inequality.108 residential housing stock for second homes and 3 In Hawaii, the gap between the very poor and short-term visitor rentals may be a significant the very rich is also not high The Gini coefficient new problem for our housing market. Approaches to high construction costs range 3 from seeking lower-priced vendors to obtaining variances from design requirements (without sacrificing health and safety) utilizing Chapterj 104 Behind the District of Columbia and Maryland. ACS, 201 H, HRS. The literature suggests, however, 2015,Table B19013, 1-year estimates. that construction costs are a minor part of the los ACS, 2015,Table 20002, 1 year estimates. 1 los ACS, 2015,Table 20002, 1 year estimates. equation. The difference between Hawaii s 106 Median household purchasing power for the 50 states average construction costs and those of other and DC , DSORT,Advisor Perspective, October 17, states is not as large as the difference in 2016 average housing prices. 107 Gyourko,Joseph, and Raven E. Saks. 2006. "Urban Reducing the impact of Hawai'i's regulatory growth and housing supply."Journal of Economic environment has been discussed by planners Geography 6 1 (2006): 71-89 108 Green, Brian, and Faiza Shaheen (2014). Economic 1 inequality and house prices in the UK, NEF working 109 Recent suggestions for alternatives to the Gini score as paper. The New Economic Foundation,2014 the best measure of income inequality may be relevant to this discussion. I Hawaii Housing Planning Study,2016 Page 84 ©SMS, Inc December,2016 I Iand regulators for at least the last two decades. We can continue to apply current inclusionary Suggested strategies have included streamlining housing regulations to build permanently the rules, eliminating duplication, setting up one- affordable housing stock.12 We can use this I stop permitting and review systems, fast-tracking route when private sector development is strong affordable projects, and many others. in response to high demand and rising incomes. I The City and County of Honolulu's most recent Hawal'i has always had a relatively cordial and effort in this direction was to reduce and effective relationship with military officials streamline barriers to regulations. Their stationed here. It will be useful to maintain introduction of permits for accessory dwelling communications in order to negotiate for units (ADU) along with Kaua'i County's support additional housing unit construction, slower for its own version of ADU enablement go growth for BAH levels, and other policy changes I beyond merely streamlining existing regulations that may affect off-base housing of military and actually reduce regulations in support of personnel. That will be particularly important affordable housing construction. should military forces be reduced significantly in the future. IMost experts point to regulation as the chief driver of supply inelasticity and high housing b. Refurbishing prices in the U.S. Some jump to the Iconclusion that reducing regulations will result in Remaining public housing units in need of repair lower prices. Some follow with the caution that or upgrading attest to the ready availability of changing a highly regulated housing units hefor Hawaii and for lower-income residents. I environment may require more time and more political will than are available. Others"' doubt Tse and other government-assisted, qualified laissez-faire planning can solve the problem units are low-hanging fruit, and represent I because there is more than one barrier to supply opportunities to expand our sustainable elasticity. Reducing regulation alone will not affordable housing stock. bring the market to equilibrium. We have seen an increase in housing units the I U.S. Census calls "vacant for other reasons". a. Building Affordable Housing Their growing number includes homes held off the market because they need refurbishing. I Hawai'i planners will continue to make the most Developing programs to assist property owners effective use of federal and state funding to with this process can bring these units back into support housing production and provide housing the housing stock at a cost that is lower than I assistance for people in need. Recent history building new units. suggests we may want to review which types of units are most important to us, and how we can c. Efficient Use of Existing Stock I produce those types. We might also devote greater attention to more efficient use of current housing stock by I developing solutions other than building 10 Glaeser, Edward L., Joseph Gyourko and Raven E. government-assisted housing units. Saks 2005 Why have housing prices gone up? IAmerican Economic Review, Vol. 95, No. 2, pp. 328- For example, the need for permanent supportive 330. See also Ihlanfeldt, Keith R 2009. Does comprehensive land-use planning improve cities? housing is reflected in the need to house high- Land Economics,Vol. 85, No. 1, pp 74 86,2009. acuity homeless and to increase the number of "' Sharam, Andrea, Lyndall Bryant, and Thomas Alves. I 2015. De-risking development of medium density housing to improve housing affordability and boost 12 Jacobus, Rick inclusionary housing. Creating and supply. Australian Planner Vol. 52, no. 3 (2015) 210- maintaining equitable communities, Policy Focus Report I 218. PF044, Lincoln Institute of Land Policy, 2015 Hawaii Housing Planning Study,2016 Page 85 ©SMS, Inc December,2016 I units available to house persons with serious their activities in Hawaii. The problem, as the 3 physical and mental disabilities (special needs). Senator sees it, is that units used for short-term This turns our attention to housing units in the vacation rentals have been shown to include group quarters inventory, a sector of the housing many residential housing units. Those units, 3 stock that sometimes gets less attention. formerly available to Hawaii renters, have been removed from the housing stock. In a housing The study of homeless households and how they market where affordable housing is already in 3 flow through the homeless services system in short supply, removing large numbers of housing Hawaii suggests that existing households will be units from the stock can be a serious problem. needed to serve as the permanent housing units called for by Housing First policy. Homeless Hawaii's State Legislature passed a bill during programs are already placing homeless people the 2016 Session that would allow the State to in affordable units and finding them places in the use transient accommodations brokers (online homes of family and friends. It is only a step booking agents) to collect taxes from Hawaii further to consider housing people in existing, property owners who rent their home or other unrelated households. real estate to visitors on short-term contracts.114 In July 2016, Governor David Ige vetoed the Bill The concept of capturing under-utilized housing citing two reasons for his action. First, the bill units has arrived. We have seen the Mayor of might shield non-compliant property owners from Vancouver, British Columbia call for a special tax prosecution under existing county ordinances3 on vacant and under-utilized housing units in his restricting the number or activities of short-term city.13 Along with such tax policies, it may also renters. Second, the Governor felt that the bill be useful to consider positive incentives to might encourage visitor rentals over local renters j motivate owners to put units back on the market. "at a time when affordable rental housing within our State is severely stressed and homelessness remains a critical statewide concern".15 d. Taxes and Incentives Dealing with underutilized housing is only one This issue is not unique to Hawaii. It does not place in which incentives came up in this study, affect only the high-priced markets in states The literature and our informants suggested, for whose representatives joined Senator Schatz in instance, that incentives be applied to encourage his endeavor. It also causes housing problems businesses, especially the visitor industry, to in large cities around the world, from Paris, provide housing for their work force We have France to Jackson Hole, Wyoming. It will be an 3 also seen the Hawaii State Legislature develop important issue to follow for the next few years. a bill to provide incentives for property owners to accept Section 8 vouchers. Another suggestion was that incentives might be used to motivate property owners and managers with units near military bases to rent to civilian households rather than military families. Finally, Hawaii's U.S. Senator Brian Schatz 1 recently joined several Senate colleagues in asking that controls be applied to Airbnb to limit 3 113 The Mayor said, "Vancouver housing is first and foremost for homes, not a commodity to make money 14 House Bill 1850. with" (Honolulu Star Advertiser, 2016). Vancouver has 15 Statement of Objections to House Bill No 1850, Canada's highest home prices (1 2$US median) and a Governor David Ige to the members of the 28`h 0.6 percent rental vacancy rate Legislature, State if Hawaii, July 11, 2016. Hawaf i Housing Planning Study,2016 Page 86 ©SMS,Inc December,2016 I I I VI. APPENDIX I I I I I I I I I I I I I I I I Hawai'i Housing Planning Study,2016 Page 87 ©SMS, Inc. December,2016 I APPENDIX A: HOUSING TRENDS The tables presented in Appendix A, referred to in prior iterations of the HHPS as the "A Tables" or "Trend Tables", provide detailed demographic and housing related data for the State of Hawai'i and its counties. This data is taken from the Housing Demand Survey from each year. The fundamental components of the Housing Demand Survey were designed to ensure compatibility with previous versions. These tables allow for the evaluation of trends in the Hawaii housing market across the past 25 years. Table A-1. Characteristics of Housing Units, 1992, 1997, 2003, 2006, 2011 and 2016 no Tenancy Unit Size (Bedrooms) Total Studio or 1 2 3 4+ County Year Households Own Rent Bedroom Bedrooms Bedrooms Bedrooms 1992 247,349 48% 52% 20% 32% 30% 19% I/ 1997 272,234 54% 46% 16% 27% 36% 21% 2003 292,003 61% 39% 15% 25% 35% 25% I Honolulu 2006 303,149 59% 41% 18% 25/0 37 0 0 0/o 20% 2011 310,882 56% 44% 15% 21% 37% 26% "I 2016 317,459 55% 45% 17% 26% 32% 25% 1992 34,266 61% 39% 14% 26% 46% 15% 1997 39,252 65% 35% 12% 23% 46% 19% 2003 43,687 61% 40% 13% 28% 42% 17% ,e Maui 2006 49,484 60% 40% 15% 27/0 0 0 43% 17% 2011 54,132 54% 46% 17% 26% 37% 20% I 2016 55,059 57% 43% 16% 25% 38% 20% 1992 39,789 68% 32% 7% 25% 53% 14% 1997 46,271 72% 28% 8% 21% 54% 17% I 2003 54,644 70% 30% 12% 19% 50% 19% Hawaii 2006 61,213 69% 31% 11% 22% 49% 18% 2011 67,096 67% 33% 13% 21% 47% 19% I 2016 66,989 66% 34% 12% 23% 46% 18% 1992 16,981 60% 40% 12% 19% 53% 15% I 1997 18,817 67% 33% 8% 19% 57% 15% 2003 20,460 66% 34% 11% 20% 53% 17% Kauai 2006 21,971 66% 34% 10% 21% 51% 18% I 2011 23,201 59% 41% 12% 19% 51% 18% 2016 23,369 63% 37% 13% 17% 50% 19% I 1992 338,385 52% 48% 17% 30% 35% 18% 1997 376,574 58% 42% 14% 25% 40% 20% 2003 410,794 62% 38% 14% 24% 39% 23% I State 2006 435,818 61% 39% 17% 24% 39% 20% 2011 455,311 57% 43% 15% 22% 39% 24% 2016 462,876 57% 43% 16% 25% 36% 23% I Source Housing Demand Survey, 1992, 1997,2003,2006,2011,and 2016 I Hawaii Housing Planning Study,2016 Page 88 111 ©SMS, Inc. December,2016 Table A-2. Household Income Data, 1992, 1997, 2003, 2006, 2011, and 2016 Household Income $15,000 $25.000 $50,000 S75,000 Total Less than to to to to $100.000 Median HH County Year Households $15,000 $24,999 $49,999 $74,999 $99,999 or more Income 1992 247,349 N/A 24% 29% 12% 6% 7% $36,974 . 1997 272,234 9% 9% 28% 15% 9% 6% $42,234 Honolulu 2003 292,003 8% 10% 36% 18% 11% 17% $47,917 r 2006 303,149 13% 7% 26% 22% 12% $58,385 2011 310,882 12% 7% 25% 22% 9% 25% $59,076 2016 317,459 9% 6% 18% 21% 15% 31% $73,859 I1992 34,266 N/A 20% 36% 11% 2% 3% $35,843 1997 39,252 10% 8% 33% 15% 7% 6% $38,908 Maui 2003 43,687 9% 13% 34% 19% 14% 11% $44,297 1 2006 49,484 11% 8% 29% 20% 15% 17% $49,795 2011 54,132 12% 10% 27% 19% 11% 21% $58,424 I 2016 55,059 1992 39,789 11% 8% 23% 21% 12% 25% $59,799 N/A 24% 39% 11% 3% 4% $34,063- 1997 46,271 14% 14% 30% 12% 4% 4% $31,831 Hawai`i 2003 54,644 14% 12% 39% 17% 9% 9% $36,905 2006 61,213 13% 10% 29% 22% 10% 16% $51,920 2011 67,096 18% 13% 25% 17% 10% 17% $44,696 2016 66,989 16% 11% 28% 17% 11% 18% $44,876 1992 16,981 N/A 20% 36% 10% 5% 3% $36,966 1997 18,817 11% 13% 30% 15% 5% 3% $34,891 Kauai 2003 20,460 13% 12% 37% 18% 9% 12% $42,205 2006 21,971 10% 10% 27% 23% 11% 19% $53,116 2011 23,201 13% 11% 25% 19% 9% 19% $49,730 2016 23,369 11% 10% 26% 21% 11% 21% $58,869 1992 338,385 N/A 24% 31% 12% 5% 6% $36,289 1997 376,574 10% 10% 29% 15% 8% 6% $39,883 State 2003 410,794 10% 10% 36% 19% 10% 15% $46,086 2006 435,818 13% 7% 27% 21% 12% 20% $58,393 I 2011 455,311 13% 8% 26% 21% 10% 23% $58,700 2016 462,876 11% 7% 20% 21% 14% 28% $72,868 Source: Housing Demand Survey, 1992, 1997,2003, 2006,2011, and 2016 INote. The number of total households for the Housing Demand survey represents an SMS estimate developed using ACS 2009 data prior to the release of Census 2010. The total households for each county differ by less than one percent from Census 2010 figures presented in Table 8 I I I I Hawaii Housing Planning Study,2016 Page 89 ©SMS, Inc. December,2016 Table A-3. Households at HUD Income Guidelines by County, 1992, 1997, 2003, 2006, 2011 and 2016 HUD Household Income Guidelines Over Over Over Over Total 30% or 30% to 50% to 80% to 120% to Over County Year Households less 50% 80% 120% 140% 140% 1992 247,349 N/Aa 20% 19% 23% 10% 27% 1997 272,234 8% 15% 21% 30% 7% 20% ""' 2003 292,003 5% 19% 22% 22% 7% 25% I Honolulu 2006 303,149 14% 10% 20% 22% 9% 24% 2011 310,882 19% 16% 25% 12% 7% 21% 2016 317,459 15% 11% 22% 16% 15% 22% I 1992 34,266 N/Aa 20% 19% 24% 9% 28% 1997 39,252 7% 11% 27% 24% 10% 21% 2003 43,687 10% 17% 28% 18% 7% 21% I Maui 2006 49,484 13% 11% 19% 21% 7% 28% 2011 54,132 20% 19% 22% 9% 5% 25% I 2016 55,059 16% 14% 19% 14% 12% 25% 1992 39,789 N/Aa 20% 18% 24% 10% 29% 1997 46,271 3% 19% 21% 23% 10% 24% t 2003 54,644 5% 14% 28% 22% 6% 25% Hawaii 2006 61,213 14% 11% 18% 20% 5% 31% I 2011 67,096 21% 16% 19% 13% 6% 24% 2016 66,989 19% 12% 21% 10% 9% 28% 1992 16,981 N/Aa 21% 18% 21% 9% 30% I 1997 18,817 9% 18% 27% 25% 9% 12% 2003 20,460 6% 23% 27% 20% 7% 18% Kauai 2006 21,971 12% 11% 18% 21% 10% 28% 2011 23,201 19% 18% 23% 13% 6% 22% 2016 23,369 19% 19% 20% 7% 11% 23% I 1992 338,385 N/Aa 20% 19% 22% 11% 28% 1997 376,574 7% 15% 22% 28% 7% 20% I 2003 410,794 9% 15% 20% 22% 8% 24% State 2006 435,818 14% 11% 20% 22% 8% 26% 2011 455,311 20% 17% 24% 12% 7% 22% 1 2016 462,876 16% 12% 21% 14% 13% 23% Source: Housing Demand Survey, 1992, 1997,2003,2006,2011, and 2016 I Note: a HUD household income guidelines of 30%or less was not available in the Housing Demand Survey 1992 I I Hawaii Housing Planning Study,2016 Page 90 I ©SMS, Inc. December,2016 L Table A-4. Housing Unit Condition, Owned Units, 1992, 1997, 2003, 2006, 2011, and 2016 Owner Occupied Total Excellent Satisfactory Fair Poor County Year Households condition condition condition condition 1992 247,349 47% 43% 9% 2% 1997 272,234 31% 47% 18% 4% 2003 292,003 42% 46% 11% 1% I Honolulu 2006 303,149 39% 46% 12% 3% 2011 310,882 40% 45% 12% 4% I 2016 317,459 N/A N/A N/A N/A 1992 34,266 52% 38% 10% 1% 1997 39,252 35% 48% 15% 3% I2003 43,687 45% 42% 10% 3% Maui 2006 49,484 44% 43% 11% 2% 2011 54,132 49% 37% 11% 2% 1 2016 55,095 N/A N/A N/A N/A 1992 39,789 52% 41% 6% 1% I 1997 46,271 42% 42% 13% 4% 2003 54,644 46% 44% 9% 2% Hawai'i 2006 61,213 44% 44% 11% 1% I 2011 67,096 48% 38% 11% 3% 2016 66,989 N/A N/A N/A N/A I 1992 16,981 49% 42% 7% 2% 1997 18,817 42% 42% 13% 3% 2003 20,460 48% 42% 9% 2% Kaua'i 2006 21,971 44% 43% 11% 2% 2011 23,201 44% 39% 15% 2% 2016 23,369 N/A N/A N/A N/A 1992 338,385 49% 42% 8% 2% 1997 376,574 34% 46% 17% 4% 2003 410,794 43% 45% 10% 2% State 2006 435,818 41% 45% 12% 3% 2011 455,311 43% 42% 12% 3% i 2016 462,876 N/A N/A N/A N/A Source. Housing Demand Survey, 1992, 1997, 2003,2006, and 2011 Note.This question was not asked in the Housing Demand Survey 2016 1 I I I Hawaii Housing Planning Study,2016 Page 91 ©SMS, Inc. December,2016 Table A-5. Housing Unit Condition, Rented Units, 1992, 1997, 2003, 2006, 2011 and 2016 ill Renter Occupied Total Excellent Satisfactory Fair Poor 1 County Year Households condition condition condition condition 1992 247,349 23% 52% 20% 6% I 1997 272,234 21% 46% 27% 6% 2003 292,003 22% 52% 22% 4% Honolulu I 2006 303,149 24% 42% 25% 10% 2011 310,882 31% 46% 19% 5% 2016 317,459 N/A N/A N/A N/A 1992 34,266 27% 43% 24% 6% 1997 39,252 25% 48% 22% 5% 2003 43,687 28% 47% 20% 6% I Maui 2006 49,484 31% 40% 22% 7% 2011 54,132 35% 43% 16% 6% 2016 55,095 N/A N/A N/A N/AI 1992 39,789 29% 46% 16% 9% 1997 46,271 26% 45% 20% 10% 1 2003 54,644 27% 46% 23% 5% Hawaii 2006 61,213 22% 48% 20% 10% 2011 67,096 37% 42% 15% 7% 1 2016 66,989 N/A N/A N/A N/A — 1992 16,981 25% 55% 15% 5% 1997 18,817 27% 44% 22% 7% I 2003 20,460 30% 47% 18% 5% Kaua'i I 2006 21,971 24% 46% 25% 6% 2011 23,201 26% 42% 27% 5% 2016 23,369 N/A N/A N/A N/A 1992 338,385 24% 51% 20% 6% I 1997 376,574 22% 46% 26% 6% 2003 410,794 24% 51% 21% 4% ' State 2006 435,818 24% 43% 24% 9% 2011 455,311 32% 45% 19% 5% 2016 462,876 N/A N/A N/A N/A I Source Housing Demand Survey, 1992, 1997,2003, 2006,and 2011 Note:This question was not asked in the Housing Demand Survey 2016 I I I Hawaii Housing Planning Study,2016 Page 92 I ©SMS, Inc. December,2016 I I Table A-6. Average Monthly Housing Cost, 1992, 1997, 2003, 2006, 2011 and 2016 Average Monthly Mortgage Payment Average Monthly Rent I Total Single- 2-bedroom County Year Households Total family Multi-family Total apartment 1992 247,349 $821 $915 $832 $864 N/A I1997 272,234 $1,430 $1,369 $1,335 $928 $923 2003 292,003 $1,546 $1,650 $1,239 $1,014 $1,072 Honolulu I 2006 303,149 $1,142 $1,173 $1,029 $1,300 $1,393 2011 310,882 $1,415 $1,393 $1,510 $1,502 $1,487 2016 317,459 $2,140 $2,353 $1,753 $1,652 $1,688 I1992 34,266 $776 $831 $719 $730 N/A 1997 39,252 $1,210 $1,664 $789 $850 $1,138 I Maui 2003 43,687 $1,310 $1,346 $1,104 $979 $1,072 2006 49,484 $1,461 $1,451 $1,458 $1,256 $1,253 I 2011 54,132 $1,461 $1,468 $1,411 $1,280 $1,303 2016 55,059 $2,045 $2,100 $1,729 $1,444 $1,429 1992 39,789 $651 $691 $579 $556 N/A I1997 46,271 $954 $1,069 $840 $697 $644 2003 54,644 $1,072 $1,078 $919 $859 $843 Hawai'i I 2006 61,213 $1,057 $1,039 $1,407 $1,146 $1,152 2011 67,096 $1,106 $1,102 $1,389 $1,121 $986 2016 66,989 $1,357 $1,379 $1,106 $1,164 $1,153 I1992 16,981 $726 $773 $612 $807 N/A 1997 18,817 $1,151 $1,290 $881 $830 $860 I . 2003 20,460 $1,284 $1,306 $1,014 $983 $885 Kauai 2006 21,971 $1,165 $1,178 $974 $1,230 $1,271 2011 23,201 $1,273 $1,254 $983 $1,311 $1,292 I2016 23,369 $1,824 $1,841 $1,682 $1,256 $1,354 1992 338,385 $800 $863 $813 $793 N/A I 1997 376,574 $1,319 $1,330 $1,286 $897 N/A 2003 410,794 $1,433 $1,488 $1,213 $992 $1,037 State 2006 435,818 $1,167 $1,183 $1,081 $1,274 $1,346 I2011 455,311 $1,355 $1,332 $1,495 $1,421 $1,398 2016 462,876 $1,987 $2,081 $1,728 $1,554 $1,577 I Source: Housing Demand Survey, 1992, 1997,2003, 2006,2011,and 2016 I I I Hawai'i Housing Planning Study,2016 Page 93 ©SMS, Inc December,2016 Table A-7. Mortgage Payments by Years in Unit, 1992, 1997, 2003, 2006, 2011, and 2016 Average Monthly Mortgage by Years in Unit Total Less than 1 County Year Households year I 1 to 5 years 6 to 10 years More than 10 years 1992 247,349 $886 $879 $656 $564 1997 272,234 $1,431 $1,668 $1,697 $1,241 2003 292,003 $1,616 $1,729 $1,689 $1,414 Honolulu 2006 303,149 $2,865 $1,865 $1,445 $824 2011 310,882 $2,488 $2,255 $2,007 $1,088 2016 317,459 $2,850 $2,378 $2,580 $1,905 1992 34,266 $824 $781 $755 $609 I 1997 39,252 $1,497 $1,519 $1,339 $986 2003 43,687 $1,972 $1,448 $1,436 $1,091 Maui 2006 49,484 $2,245 $2,037 $1,565 $1,072 2011 54,132 $1,671 $1,962 $1,720 $1,202 I 2016 55,059 $2,516 $2,301 $2,134 $1,898 1992 39,789 $752 $707 $455 $314 1997 46,271 $1,030 $1,168 $1,122 $730 2003 54,644 $1,455 $1,143 $1,174 $953 Hawaii 2006 61,213 $1,700 $1,662 $987 $725 ' 2011 67,096 $1,591 $1,531 $1,403 $792 2016 66,989 $1,985 $1,325 $1,384 $1,316 1992 16,981 $888 $722 $559 $552I 1997 18,817 $1,448 $1,304 $1,167 $968 2003 20,460 $1,673 $1,490 $1,373 $1,089 Kauai 2006 21,971 $2,666 $1,634 $1,442 $824 2011 23,201 $2,285 $2,039 $1,587 $1,026 2016 23,369 $2,518 $2,022 $2,221 $1,619 1992 338,385 $867 $853 $634 $553 1997 376,574 $1,387 $1,548 $1,501 $1,135 2003 410,794 $1,636 $1,559 $1,577 $1,299 State 2006 435,818 $2,468 $1,837 $1,378 $835 2011 455,311 $2,157 $2,013 $1,805 $1,049 I 2016 462,876 $2,547 $2,186 $2,294 $1,798 Source: Housing Demand Survey, 1992, 1997,2003,2006, 2011,and 2016 I I I Hawaii Housing Planning Study,2016 Page 94 I ©SMS,Inc December,2016 I I Table A-8. Household Composition, 1992, 1997, 2003, 2006, 2011, and 2016 Household Type I Married, Total Single no Parent(s) Unrelated County Year Households member children & children roommates Othera Undetermined I 1992 247,349 11.9% 24.4% 26 3% 1.7% 32.0% 3.7% 1997 272,234 14.1% 25.6% 27.3% 4 2% 27.2% 1.6% 2003 292,003 22.0% 28.9% 21.2% 3 2% 22.9% 1.8% I Honolulu 2006 303,149 24.1% 21.8% 20.9% 3.3% 29 3% 0.5% 2011 310,882 22.2% 19.6% 14.1% 5.0% 37.6% 1.4% I 2016 317,459 23.5% 20.2% 13.8% 5.5% 36.5% 0.1% 1992 34,266 12 6% 24 4% 32.9% 1.6% 25 9% 2.3% 1997 39,252 14 1% 25 0% 27.9% 5.4% 24 8% 2.7% I Maui 2003 43,687 21.9% 29 6% 25.4% 3.2% 17 6% 2.3% 2006 49,484 21.5% 24 8% 24.0% 3.6% 25.8% 0.3% I 2011 54,132 24.7% 22.2% 12.8% 7.0% 30.7% 2.6% 2016 55,059 23.9% 22.2% 13.9% 6.7% 32.4% 0.9% 1992 39,789 9.6% 27.2% 32.3% 0.6% 26.0% 4.3% 10 1997 46,271 14.8% 27.0% 28.4% 3.5% 24.3% 2 1% 2003 54,644 22 3% 30.6% 24 4% 3.2% 18.1% 1.4% Hawal`i I 2006 61,213 19 5% 25.6% 22.6% 2.6% 28.7% 1.0% 2011 67,096 24.6% 25.0% 13.5% 6.5% 29.0% 1.4% 2016 66,989 26.5% 26.3% 13.5% 5.9% 27.5% 0.3% I1992 16,981 12.7% 26 1% 31.0% 0.5% 26 3% 3.5% 1997 18,817 13.2% 271% 30.0% 1.7% 254% 2.5% I 2003 20,460 20.9% 26 9% 26.8% 3.2% 20 5% 1.7% Kauai 2006 21,971 19.8% 25.0% 23.3% 3.3% 28.2% 0.4% 2011 23,201 22.5% 23.6% 14.8% 4.4% 32.5% 2.2% I 2016 23,369 22.9% 25.3% 15.3% 5.7% 30.3% 0.5% 1992 338,385 117% 24.9% 27.9% 15% 30.3% 3.6% I 1997 376,574 14.2% 25.8% 27.6% 4.1% 26.5% 1.9% 2003 410,794 22 0% 29.1% 22 3% 3 2% 21.6% 1.8% State 2006 435,818 22.9% 22.8% 21 6% 3.2% 28.8% 0.6% I2011 455,311 22.9% 21.0% 13.9% 5.5% 35.2% 1.6% 2016 462,876 23.9% 21.6% 13.8% 5.7% 34.4% 0.2% I Source: Housing Demand Survey, 1992, 1997,2003, 2006, 2011,and 2016 Note aOther household types include a mixture of related and unrelated individuals I I I Hawaii Housing Planning Study,2016 Page 95 ©SMS,Inc. December,2016 Table A-9. Household Crowding, 1992, 1997, 2003, 2006, 2011, and 2016 Crowding Indicators Total Crowded and/or III Year Households Crowdeda Doubled Upb Doubled Upc 1992 247,349 23.2% 32.0% t 1997 272,234 10.6% 27.2% 2003 292,003 10.1% 10.0% 176% Honolulu I 2006 303,149 8.1% 9 7% 15.2% 2011 310,882 13.3% 13.8% 22.9% 2016 317,459 11.4% 11.9% 21.0% I 1992 34,266 26.8% 25.9% 1997 39,252 10.4% 24.8% 2003 43,687 11.0% 8.7% 17 3% Maui 2006 49,484 7.7% 9.6% 15 3% 2011 54,132 10 7% 13.0% 19 2% 2016 55,095 9.8% 14.1% 21 4% 1992 39,789 18.7% 26.0% 1997 46,271 7.9% 24 3% 2003 54,644 7.0% 9 3% 14.4% IN Hawaii 2006 61,213 6.9% 11.2% 15.9% 1 2011 67,096 8.4% 11.3% 17.2% 2016 66,989 7.4% 11.1% 16.0% 1992 16,981 17.4% 26.3% I 1997 18,817 9.1% 25.4% 2003 20,460 6.0% 12 5% 16.1% I Kauai 2006 21,971 6.6% 11 9% 15.5% 2011 23,201 10.5% 11.7% 18.1% 2016 23,369 8.9% 11 5% 19.2% I 1992 338,385 22.2% 30.3% 1997 376,574 10.2% 26.5% 2003 410,794 9 6% 10.0% 17.1% 1 State 2006 435,818 7.8% 10 0% 15.3% 2011 455,311 121% 13.2% 21 4% I 2016 462,876 10 5% 12 0% 20 2% Source: Housing Demand Survey, 1992, 1997,2003, 2006,2011, and 2016 a Based on more than 2 persons per bedroom. I'' More than one family group in a single housing unit(See Glossary). c Percent of households crowded, doubled up, or both Before 2003, HHPS measured crowding and"crowded or doubled up". After 2003, HHPS measured crowding and doubled up and the combination of both. I I Hawaii Housing Planning Study,2016 Page 96 I ©SMS, Inc December,2016 I I Table A-10. Shelter-to-Income Ratios, 1992, 1997, 2003, 2006, 2011, and 2016 Monthly Shelter Payment as a Percent of Monthly Household I Income Under Total No Shelter 30 30 to 40 Over 40 Not enough I County Year Households Payment i percent percent percent information 1992 247,349 55.7% 14 1% 20 2% 10.0% 1997 272,234 55.1% 18 9% 18 4% 7.5% I 2003R 292,003 16.4% 36.3% 17.9% 14.4% 15.0% Honolulu 2006R 303,149 19.2% 35.7% 10.9% 22.0% 12.2% 2011R 310,882 14 6% 35.7% 10.1% 30.6% 9.0% I2016 317,459 21 3% 37 1% 11.4% 24.4% 5 9% 1992 34,266 59 3% 18.1% 15.8% 6.7% 1997 39,252 47 9% 16.0% 19.8% 16.4% IMaui 2003R 43,687 12.0% 40 6% 17.5% 16.2% 13.6% 2006R 49,484 16.0% 33 1% 14.4% 27.1% 9.4% I 2011R 54,132 16.2% 35.5% 12.0% 29.2% 7.1% 2016 55,059 15.0% 35.2% 12 4% 31.4% 6.0% 1992 39,789 70 2% 12.4% 11.5% 5 9% I1997 46,271 51.8% 18.1% 20.4% 9 7% 2003R 54,644 17.9% 38.7% 16.5% 14.4% 12 5% Hawaii I 2006R 61,213 15.9% 38.2% 10.9% 23.0% 12 1 2011R 67,096 19.4% 34 1% 12.0% 26.8% 7 7% 2016 66,989 27 0% 37.2% 10.3% 19.3% 6.2% I1992 16,981 60.3% 17.7% 13.7% 8.1 1997 18,817 44.9% 18.7% 24.7% 11.7% 2003R 20,460 17 3% 38.9% 14.8% 16.1% 12.9% I Kaua`i 2006R 21,971 18 8% 38.7% 10.8% 21.6% 10.0% 2011R 23,201 18.6% 35.0% 12.2% 25.5% 8.6% I 2016 23,369 20.8% 36.8% 10.8% 26.3% 5.2% 1992 338,385 58 0% 14.5% 18.4% 9.1% 1997 376,574 53 5% 18.5% 19 1% 8.9% I State 2003R 410,794 16.1% 37.2% 17 5% 14.7% 14.4% 2006R 435,818 18.4% 35.9% 11 3% 22 7% 11.8% I 2011R 455,311 15.7% 35.4% 10 7% 29.6% 8.6% 2016 462,876 21.4% 36.8% 11 3% 24.6% 5.9% Source Housing Demand Survey, 1992, 1997,2003, 2006,2011, and 2016 I Note. Under 30 percent includes households with no shelter payment for 1992 and 1997. I I I Hawai'i Housing Planning Study,2016 Page 97 ©SMS, Inc December,2016 Table A-11. Shelter-to-Income Ratios by Years in Unit, 1992, 1997, 2003, 2006, 2011, and 2016 Percent with shelter-to-income ratio of 30% or more by Years in Unit by Tenancy Total Less than 1 to 5 6 to 10 More than Rented or Owner County Year Households 1 year years years 10 years no cash occupied mi 1992 247,349 61.1% 43.7% 34.9% 12.7% 44.6% 23 0% 1997 272,234 40.8% 43.2% 46.9% 35.1% 41.4% 39.2% 2003 292,003 42.5% 49.6% 37.6% 24.9% 48.9% 28.0% Honolulu 2006 303,149 53.0% 43.1% 36.9% 22.1% 47.2% 22.7% 2011 310,882 65.8% 55.7% 44.9% 25.9% 61 9% 24.5% 3 2016 317,459 60.3% 48 8% 38 5% 21.7% 58.1% 23.2% 1992 34,266 47.3% 49.8% 30 6% 17.0% 43.8% 27.6% I 1997 39,252 41.4% 50 0% 47.3% 33.7% 38.6% 46.1% 2003 43,687 52.2% 38.3% 26.5% 26.0% 40.5% 30.0% I Maui 2006 49,484 66.3% 46.8% 44.8% 26.3% 54.6% 32.6% 2011 54,132 60.2% 51.5% 40 6% 27 6% 52.7% 31.1% 2016 55,059 65.5% 50.2% 48 4% 33.5% 66.3% 31.4% 1992 39,789 51 5% 35.8% 18.5% 6.7% 37.8% 17 2% a 1997 46,271 49 6% 52.5% 42.6% 30.8% 52.0% 37.0% 2003 54,644 42.4% 41.7% 31 2% 26.8% 49.0% 27.8% Hawai'i 2006 61,213 60.8% 43.7% 27 5% 20.3% 48.3% 27.1% 2011 67,096 66.4% 48.7% 38 4% 23.0% 57.3% 28.1% I 2016 66,989 38.7% 39.7% 33.3% 21.3% 61.9% 17.7% 1992 16,981 46.3% 31.1% 18.5% 15.6% 36 9% 28.1% I 1997 18,817 61.2% 56.5% 41.4% 39.6% 53.4% 46.1% 2003 20,460 43.2% 43.2% 31.4% 26.0% 44 4% 29.7% Kauai 2006 21,971 51.6% 45 2% 37 1% 18.8% 47.7% 24.3% 2011 23,201 65.8% 53 9% 42.9% 29.3% 56 0% 31.7% 2016 23,369 64.5% 50.6% 39.7% 26.3% 58 9% 28 0% I 1992 338,385 57.8% 43 3% 31.1% 12.6% 43.7% 23.0% 1997 376,574 42.2% 45 6% 46.0% 34.7% 40.1% 40.1% I 2003 410,794 43.6% 46 2% 35.3% 25.3% 28.3% 28.3% State 2006 435,818 56.4% 43 8% 36.7% 22.1% 48.2% 24.6% 2011 455,311 65.0% 53.9% 43.2% 25 8% 59.8% 26.3% I 2016 462,876 58.2% 47.8% 39.2% 23.2% 59.6% 23 5% Source: Housing Demand Survey, 1992, 1997,2003,2006,2011, and 2016 I I Hawai'i Housing Planning Study,2016 Page 98 I ©SMS,Inc December,2016 Table A-12. Intention to Move, 1992, 1997, 2003, 2006, 2011 and 2016 Intention to Move When Household Will Move Raw Probably Will Move Demand- More Is Total Will Not to a New Total Will 3 to 5 Than 5 Not Sure County Year Households Move Unit Move In 1 Year In 2 Years Years Years When 1992 247,349 42 6% 57 4% 142,090 29 2% 21 5% 19 0% 10.2% 20.1% 1997 272,234 44 8% 55 2% 150,194 23.5% 20 9% 16.2% 10 9% 28 5% 2003 292,003 56.3% 43 7% 127,683 27.9% 20 5% 19.3% 10.3% 22.0% Honolulu 2006 303,149 61 2% 38 8% 117,597 24.5% 22 9% 15.5% 8 2% 29.0% 2011 310,882 45 4% 54 6% 168,946 21.5% 21 4% 20.1% 15 6% 21.5% 2016 317,459 40.0% 60 0% 190,377 19.8% 18.3% 20.0% 15 8% 26.1% I 1992 34,266 56.8% 43 2% 14,793 28.6% 24.7% 17 1% 9.2% 20.4% 1997 39,252 51.9% 48 1% 18,894 23 1% 17.2% 13.4% 18.2% 28.1% 2003 43,687 51 9% 48.1% 18,205 22 1% 20.6% 18 6% 10 0% 28.7% Maui 2006 49,484 54 9% 45 1% 22,318 19.6% 26 9% 15 0% 14 0% 24.5% I2011 54,132 52 9% 47.1% 25,282 24 8% 19 4% 17.6% 16.1% 22.2% 2016 55,059 47 7% 52.3% 28,784 20.6% 19 9% 19 9% 17.1% 22.5% 1992 39,789 55 6% 44.4% 17,685 28.8% 20 8% 17.8% 14.0% 18.6% 1997 46,271 60 0% 40 0% 18,491 22.3% 18 1% 15.5% 15.9% 28 2% 2003 54,644 55 6% 44 4% 21,252 21.4% 19 2% 15.9% 17 3% 26 2% Hawaii 2006 61,213 57.9% 42.1% 25,769 22.4% 19.3% 19.4% 11.2% 27.7% I 2011 67,096 58.4% 41.6% 28,223 20.9% 12.9% 24.9% 20 8% 20.6% 2016 66,989 50.2% 49.8% 33,336 21 7% 17.9% 17.4% 189% 24.1% 1992 16,981 56.8% 43.2% 7,337 32 8% 17.4% 21.4% 6.4% 22.0% 1997 18,817 58.0% 42.0% 7,907 17 1% 13.9% 16.3% 15.3% 37.4% 2003 20,460 63 5% 36 5% 7,468 22 1% 22.4% 15 6% 12.1% 27.9% Kauai 2006 21,971 64 4% 35 6% 7,826 23.4% 17.5% 13 6% 17 1% 28.4% 2011 23,201 57 2% 42.8% 9,628 30 3% 15.5% 15 1% 18.3% 20.8% 2016 23,369 55 7% 44 3% 10,355 21 1% 21.6% 19 9% 19.9% 17.6% 1992 338,385 46 2% 53 8% 181,905 29 2% 21 5% 18 8% 10.4% 20.1% I 1997 376,574 48 1% 51 9% 195,486 23.1% 20.0% 15 9% 12 3% 28.8% 2003 410,794 57 5% 42.5% 174,608 26 3% 20 5% 18 6% 11.2% 23 5% State 2006 435,818 60 2% 39.8% 173,510 23 5% 22 6% 15 9% 9.8% 28.2% I 2011 455,311 49 2% 50 8% 232,079 22.1% 19 8% 20 2% 16.4% 21 4% 2016 462,876 43.2% 56.8% 262,852 20 1% 18.6% 19.6% 16.5% 25 1% Source Housing Demand Survey, 1992, 1997,2003,2006,2011, and 2016 I Base for intention to Move is all respondent households Base for When Households Will Move is 262,852 households who provided a time frame or said not sure (excludes probably never move) I I I I I Hawaii Housing Planning Study,2016 Page 99 ©SMS, Inc. December,2016 Table A-13. Preferred Location for Next Move, 1992, 1997, 2003, 2006, 2011 and 2016 Preferred Location for Next Move Total Final Demand - Same Different Out-of- County Year Households Total Will Movea Island Island Not Sure State 1992 247,349 142,090 62.2% 5.3% 6 3% 26.1% 1997 272,234 150,194 52.5% 4.3% 11.0% 32.2% 2003 292,003 127,683 65.7% 2.8% 11.6% 19.8% Honolulu 2006 303,149 117,597 66.1% 4.5% 8.9% 20.5% 2011 310,882 132,696 63.4% 4.3% 5.6% 26.6% ... 2016 317,459 139,823 59.3% 3.4% 14.2% 23.1% 1992 34,266 14,793 71 7% 13 3% 5.7% 9.4% 11 1997 39,252 18,894 72.5% 2.7% 13.0% 11.8% 2003 43,687 18,205 68 3% 6 9% 10.8% 14.0% Maui 2006 49,484 22,318 71.5% 9 5% 6.7% 12.3% 2011 54,132 19,774 58.5% 5.4% 24.9% 11.2% 2016 55,059 21,877 65.9% 6 6% 8.9% 18.7% 1992 39,789 17,685 80.9% 4.2% 4.4% 10.6% 1997 46,271 18,491 74.3% 4.0% 7.7% 14 0% 2003 54,644 21,252 73.4% 5.4% 12.1% 9.1% Hawaii 2006 61,213 25,769 73.0% 6.0% 9.4% 11 5% 2011 67,096 22,327 61.9% 7 8% 8.3% 22.1% 2016 66,989 24,746 61.4% 7.2% 13.9% 17.5% 1992 16,981 7,337 76.7% 6 2% 6.0% 11.1% 1997 18,817 7,907 69.8% 5 7% 10.1% 14.3% 2003 20,460 7,468 71.8% 9.7% 9.0% 9.5% Kauai 2006 21,971 7,826 64.8% 7 4% 9.1% 18.7% 2011 23,201 7,586 62.8% 7.0% 11.1% 19.2% 2016 23,369 8,211 65.7% 5 2% 7.6% 21.5% j 1992 338,385 181,904 65.4% 5 9% 6.1% 22.6% 1997 376,574 195,485 57.2% 4 2% 10.9% 27.8% 2003 410,794 174,607 67.2% 3.9% 11.5% 17 5% State 2006 435,818 173,511 67.8% 5.5% 8.7% 18.0% 2011 455,311 182,384 62.6% 5.0% 8.7% 23 8% 1 2016 462,876 194,656 60.5% 4 2% 13.4% 21.9% Source Housing Demand Survey, 1992, 1997, 2003, 2006,2011, and 2016 a The total number of Final Demand households differs from the Raw Demand number in Table A-12 because households who didn't know or refused to report when they might move are excluded from the final demand counts. I I Hawaii Housing Planning Study,2016 Page 100 I 0 SMS,Inc December,2016 L LTable A-14.Tenancy Preference of Current Owners & Renters, 1992, 1997, 2003, 2006, 2011, and 2016 Current Owners Current Renters 1Effective Planned Next Planned Next Demand Total Tenancy Tenancy County Year Will Move' Total Buy Rentb Total` Buy Rentb I 1992 127,810 33,243 89.7% 10.3% 94,567 32.7% 67.3% 1997 128,791 44,335 89.1% 10.9% 84,456 44.0% 56.0% 2003 113,638 41,616 85.5% 14.5% 72,022 55 4% 44.6% Honolulu 2006 100,545 30,973 86.8% 13.2% 69,572 55 4% 44.6% 2011 97,429 32,688 74.2% 25.8% 64,621 251% 68.3% 2016 136,933 58,933 75.2% 24.8% 76,476 29.7% 70.3% 1 1992 13,284 4,600 87.6% 12.4% 8,684 49.5% 50.5% 1997 16,239 6,450 84.8% 15 2% 9,789 46.8% 53.2% 2003 15,593 5,657 95.1% 4.9% 9,936 52.4% 47.6% Maui 2006 19,584 7,083 92.0% 8.0% 12,501 52.3% 47.7% 2011 16,937 5,370 72.0% 28.0% 11,396 29.4% 70.6% 2016 19,434 7,431 73.5% 26.5% 11,877 35.4% 64.6% 1992 16,004 7,132 93.7% 6.3% 8,872 64.9% 35.1% 1997 15,884 7,694 87.5% 12.5% 8,190 49.6% 50.4% 2003 18,471 8,679 90.0% 10.0% 9,792 57.1% 42.9% Hawaii 2006 22,200 10,264 93.8% 6 2% 11,936 54.7% 45.3% 2011 17,412 6,838 70 1% 29.9% 10,540 37.2% 62.8% Ir" 2016 24,570 12,856 67.4% 32.6% 11,568 37.3% 62 7% 1992 6,530 2,264 95 9% 4 1% 4,266 54.9% 45.1% 1997 6,428 2,054 92.9% 7 1% 4,374 48.2% 51 8% 2003 6,426 2,737 90.5% 9 5% 3,689 51.6% 48.4% Kauai 2006 6,715 2,614 87.6% 12.4% 4,101 39.3% 60.7% 2011 6,339 1,700 61.3% 38.7% 4,521 20.9% 79.1% 2016 6,750 2,670 70.1% 29.9% 4,077 35.2% 64.8% a 1992 163,664 47,239 90.4% 9.6% 116,425 37.2% 62.8% 1997 167,343 60,533 88 6% 11.4% 106,810 44.9% 55.1% IState 2003 154,129 58,689 87.6% 12.4% 95,440 55.1% 44.9% 2006 149,044 50,934 89 0% 11.0% 98,110 54.3% 45.7% I 2011 138,116 46,595 72 9% 27 1% 91,079 26.8% 73.2% 2016 187,687 81,889 73 8% 26 2% 103,997 31.4% 68.6% Source. Housing Demand Survey, 1992, 1997,2003, 2006, 2011,and 2016 I Base for Effective Demand is households who plan to move, have some idea when they will move, and plan to stay in the State of Hawaii when they move Base for Current Owners is 46,494 households included in 138,116 Total Will Move households that own their current residence. I Base for Current Renters is 91,088 households included in 138,116 Total Will Move households that currently rent their unit or occupy without paying cash rent a The total number of mover households differs from Table A-12 because those who plan to move out of state are excluded from effective demand counts Total Current Owners and Total Current Renters do not sum to Total Will Move because I those households that refused to provide their current tenancy were excluded from the analysis. b Includes households that plan to rent or are not sure about their next tenancy Includes households that currently rent or occupy without payment of cash rent. I I Hawaii Housing Planning Study,2016 Page 101 ©SMS, Inc. December,2016 Table A-15. Preferred Unit Type, Buyers, 1992, 1997, 2003, 2006, 2011, and 2016 Preferred Unit Type Total Will Single No County Year Movea Family° Townhousec Condos Apartmente Otherf Preference 1992 60,724 73.9% 14.3% 8.7% 1.1% 0.0% 2.0% 1997 76,663 78.7% 4.2% 12.7% 0.2% 1.3% 2.9% 2003 75,482 78.6% 5 1% 6.8% 1.8% 1.3% 6 4% Honolulu 2006 65,495 69.7% 7.5% 12.7% 1.0% 1 3% 8.6% 2011 40,483 61.0% 7.2% 26.7% 0.0% 2.0% 3.1% I 2016 64,168 57.9% 6.2% 21 9% 6.1% 0.2% 7.6% 1992 8,328 89.7% 2.5% 5.3% 0.6% 1.9% 0.0% 1997 10,051 87.1% 2.2% 8.0% 0.8% 0.0% 1.9% I 2003 10,586 85.0% 1.2% 74% 1.6% 01% 4.7% Maui 2006 12,539 85.6% 2.7% 7.6% 0.0% 0.4% 3.7% I 2011 7,156 83.0% 5.7% 9.7% 0.0% 0.4% 1.2% 2016 9,172 80.1% 3 6% 9.7% 1.2% 1.9% 3.3% 1992 12,441 91.8% 3.3% 2.2% 1.0% 0.8% 0.9% I › 1997 10,794 91.7% 1 9% 4.8% 0.2% 0 2% 1 1% m 2003 13,402 91.4% 1 8% 2.1% 0 5% 0.2% 4.0% ° Hawai`i c 2006 15,940 84.2% 4 4% 4.9% 0.0% 2.1% 4.4% I CV n- 2011 8,711 87.3% 4.0% 5.9% 0.0% 1.0% 1.8% 2016 11,407 80 3% 0 3% 8.0% 0 3% 1.1% 10.0% I 1992 4,513 95.1% 1.1% 2.9% 0.0% 0.0% 0.9% 1997 4,016 91.0% 4.1% 4.9% 0 0% 0 0% 0 0% 2003 4,381 86 9% 3 8% 5.8% 0 0% 1.7% 1.8% I Kauai 2006 3,879 79.0% 5.3% 8.2% 0.0% 1.3% 6.1% 2011 2,046 81.8% 4.4% 8.3% 0.0% 2 8% 2 6% 2016 3,040 86 7% 1 7% 7.5% 3 4% 0 7% I 1992 86,006 79.2% 10.9% 7.1% 1.0% 0.1% 1 7% 1997 101,524 81.4% 3.8% 11.0% 0 3% 1 0% 2 5% I 2003 103,851 81 3% 4 3% 6.2% 1 5% 1 0% 5.7% State 2006 97,853 74 5% 6 3% 10.6% 1.0% 1.3% 7.2% 2011 58,395 68.3% 6.5% 20.9% 0 0% 1 7% 2.6% I 2016 87,787 64 1% 5 0% 18.3% 4 8% 0 5% 7.2% Source. Housing Demand Survey, 1992, 1997, 2003, 2006, 2011, and 2016 a Total Will Move is households that plan to move, have some idea when they will move, plan to stay in the State when they move, and want to buy their next unit rather than rent Note. Sum of county figures may not equal the State total due to rounding. b Single Family is a single-family detached dwelling unit. °Townhouse is a side by side housing unit that does not meet the definition of single-family. I d Condo is an apartment building with five units or more in which each owner owns a unit and holds a joint ownership in common areas with other owners in the building °Apartment contains residential suites in which each individual unit is leased to different occupants. f Other includes type of units that are not Single Family,Townhouse, Condo,and apartment I I Hawaii Housing Planning Study,2016 Page 102 I ©SMS,Inc. December,2016 I Table A-16. Preferred Unit Type, Renters, 1992, 1997, 2003, 2006, 2011, and 2016 I Preferred Unit Type Total Single No Will I County Year Movea Familyb Townhouse Condo° I Apartmente Other` Preference 1992 67,086 64.3% 3.9% 12.5% 13.6% 0.6% 5.1% 1997 52,128 50.8% 8 3% 11.4% 19.3% 1 1% 9.1% I Honolulu 2003 38,156 56.0% 9.1% 4.1% 21.1% 2.9% 6.8% 2006 40,585 41.3% 10 7% 8.3% 28.8% 2 8% 8.2% 2011 46,396 34.5% 4 3% 13.8% 44.2% 2 0% 1.2% I2016 67,065 26.3% 4 7% 12.4% 30.9% 0 9% 24.8% 1992 4,956 82.1% 3 8% 6.3% 4.1% 3 7% 0.0% II 1997 6,188 60.3% 3 9% 14.0% 17.6% 2.0% 2.2% 2003 5,007 77 9% 6 7% 4.7% 7.2% 1.8% 1.7% Maui 2006 7,265 65.1% 0 8% 11 4% 14.1% 0 5% 8.0% 2011 7,751 57.3% 7.8% 5.0% 14.8% 5.4% 9.7% 2016 9,178 52 4% 3 3% 6.8% 18 1% 5 1% 14.3% I 1992 3,563 80.1% 5.4% 4.7% 4.7% 0.0% 5.1% c 1997 5,090 65 3% 4 1% 4.7% 16.4% 3.4% 6.1% ce 2003 5,069 69.9% 1 3% 5.0% 18 1% 3 4% 2.3% I o Hawai`i 2006 7,659 61 6% 4.5% 7.7% 15.8% 5.4% 5.0% as n. 2011 6,294 74.1% 4 8% 2.8% 11 7% 1.8% 4.8% I 2016 10,410 48.8% 1992 2,017 84.4% 0.9% 5.0% 16.6% 6.8% 21.8% 3 6% 8.1% 0.8% 3.2% 0.0% 1997 2,412 79.3% 2.3% 1.1% 5.3% 2.3% 9.7% ' Kauai 2003 2,045 77.3% 0 0% 1.7% 12.9% 0 0% 8.1% 2006 3,177 64.4% 2 0% 9.8% 10.9% 5 7% 7.1% I 2011 3,525 66.5% 1.8% 11.9% 10.6% 3.9% 5.3% 2016 3,179 65 1% 1 5% 4.4% 15 6% 0 9% 12.4% 1992 77,622 66.7% 4.0% 11.6% 12.3% 0.8% 4.6% I1997 65,818 53.9% 7 3% 10.8% 18.4% 1.4% 8.2% 2003 50,277 60.4% 7 7% 10 8% 19.1% 2 7% 5.9% State I 2006 58,686 48.1% 8 2% 10.8% 24.3% 3.0% 7.7% 2011 63,697 42 9% 4 6% 11.6% 35.6% 2 5% 2 8% 2016 89,832 33.0% 4.0% 10.7% 27.4% 2.0% 23.0% I Source: Housing Demand Survey, 1992, 1997,2003, 2006, 2011, and 2016 a Total Will Move is households that plan to move, have some idea when they will move, plan to stay in the State when they move, and want to buy their next unit rather than rent Note. Sum of county figures may not equal the State total due to rounding. I b Single Family is a single-family detached dwelling unit `Townhouse is a side by side housing unit that does not meet the definition of single-family. d Condo is an apartment building with five units or more in which each owner owns a unit and holds a joint ownership in common areas with other owners in the building I e Apartment contains residential suites in which each individual unit is leased to different occupants. f Other includes type of units that are not Single Family,Townhouse, Condo, and apartment I I Hewai'i Housing Planning Study,2016 Page 103 ©SMS, Inc. December,2016 3 Table A-17. Preferred Number of Bedrooms, Buyers, 1992, 1997, 2003, 2006, 2011, and 2016 Preferred Number of Bedrooms Total Will Studio or Four or No County Year Move' One Two Three More Preference 1992 60,724 2.9% 30.5% 43.3% 23.3% 0.0% 1997 76,663 1.4% 17.6% 49.1% 31.0% 0.8% 2003 75,482 3 9% 22 3% 46.7% 25.5% 1.6% Honolulu 2006 65,495 0 1% 15 1% 41 6% 39.0% 4.2% 2011 40,483 4 5% 23 6% 37 8% 34.1% 0.0% 2016 64,168 3.0% 33 4% 41.0% 22.5% 0 1% 1992 8,328 0.4% 27.5% 56.9% 15.2% 0.0% Ai 1997 10,051 6.4% 19.7% 44.5% 28.1% 1.2% 2003 10,586 4.1% 21.8% 37.7% 36.0% 0.4% I Maui 2006 12,539 1.7% 19.9% 46.0% 31.7% 0.7% 2011 7,156 1.1% 20.2% 49.1% 29.3% 0.4% 2016 9,172 1.3% 18.1% 56.1% 23.6% 0.9% 1 1992 12,441 1.1% 25.4% 55.9% 17.3% 0.3% >, 1997 10,794 6.2% 22.7% 40.3% 29.0% 1.7% co 0 2003 13,402 4.0% 18.4% 45.9% 31.7% 0.0% Hawaii c 2006 15,940 3 1% 17.1% 41.2% 35.4% 3.3% _m o_ 2011 8,711 9 5% 29.7% 34.5% 25.3% 1 1% 2016 11,407 1 3% 22 8% 61 6% 14.3% 0 0% 1992 4,513 0 7% 29 3% 48.3% 21.7% 0 0% 1 1997 4,016 1.6% 21.9% 51.6% 24.9% 0.0% 2003 4,381 5.0% 19.5% 37.6% 37.5% 0.4% Kaua`i 2006 3,879 0.8% 18.5% 46.3% 34.1% 0 3% 2011 2,046 1.2% 16.5% 49.1% 33.2% 0.0% II2016 3,040 5 1% 20 5% 53 7% 20 7% 0 0% 1992 86,006 2.3% 29.4% 46.7% 21.6% 0.1% 1997 101,524 2.5% 18.5% 47.8% 30.3% 0.9% 1 2003 103,851 4 0% 21.6% 45.2% 28.0% 1.2% State 2006 97,853 0 8% 16.2% 42 3% 37 3% 3.5% I 2011 58,395 4.7% 23.8% 39.1% 32.1% 0.2% 2016 87,787 2 7% 30 0% 45 7% 21 5% 0 1% Source Housing Demand Survey, 1992, 1997,2003,2006, 2011,and 2016 1 I I Hawaii Housing Planning Study,2016 Page 104 I ©SMS, Inc. December,2016 I Table A-18. Preferred Number of Bedrooms, Renters, 1992, 1997, 2003, 2006, 2011, and 2016 IPreferred Number of Bedrooms Total Will Studio or Four or No ICounty Year Move One Two Three More Preference 1992 67,086 15 2% 40.0% 35.3% 9.5% 0.0% 1997 52,128 7.3% 40.2% 32.4% 19.7% 0.4% I Honolulu 2003 38,156 17.7% 40.6% 28.0% 12.4% 1.3% 2006 40,585 11 8% 35.1% 334% 163% 3.5% I 2011 46,396 21.2% 42.8% 29.9% 5.7% 0.4% 2016 67,065 17.4% 35 9% 34 9% 11 4% 0 4% 1992 4,956 6.4% 41.0% 49.0% 1.0% 2.6% I 1997 6,188 17.9% 34 3% 34 8% 12 7% 0 2% 2003 5,007 9 1% 37 4% 34 0% 18 1% 1 4% Maul I 2006 7,265 7.5% 43.7% 35.9% 11.9% 1.0% 2011 7,751 11.6% 47 3% 34 8% 6.3% 0 0% 2016 9,178 11.2% 41 9% 36 9% 8.9% 1.2% 1 1992 3,563 5 1% 43 9% 38.7% 12.3% 0.0% c 1997 5,090 10.7% 31 7% 40 1% 16 8% 0 6% m I $ Hawaii 2003 5,069 18.0% 35.9% 37.5% 8.6% 0.0% 2006 7,659 9.3% 31 6% 41 2% 16 6% 1 3% m E 2011 6,294 7 6% 37.6% 34.7% 20.1% 0.0% I2016 10,410 13.3% 37 5% 35 0% 14 3% 0 0% 1992 2,017 0.8% 38.1% 47 8% 13 3% 0.0% 111 1997 2,412 4.6% 14 7% 63.8% 14.3% 2.6% 2003 2,045 17.8% 23 7% 44 3% 11 7% 2 5% Kaua'i 2006 3,177 7.3% 33.3% 41.7% 17.1% 0.5% I2011 3,525 12.9% 44 6% 31 9% 8 6% 2 1% 2016 3,179 14.5% 34.7% 39 8% 10.1% 0.9% I 1992 77,622 13.8% 40.2% 36.6% 9.2% 38 0% 34 4% 1 0.2% 1997 65,818 8 5% 8 6% 0 5% 2003 50,277 17.7% 40 6% 28 0% 12 4% 1 3% I State 2006 58,686 10.7% 35.6% 35.1% 15.8% 2.7% 2011 63,697 18.3% 42 9% 31 0% 7.4% 0.4% I2016 89,832 16.2% 36.7% 35.3% 11.4% 0.4% Source: Housing Demand Survey, 1992, 1997,2003, 2006,2011, and 2016 I I I I Hawai'i Housing Planning Study,2016 Page 105 ©SMS, Inc. 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C) U) iU) cocoO C O ( N N N O N N U) N W , O U) (o U) 00 O co 0o cn N O) U) N M 0) 0) 0) M U) N d r r r r r 0 E I +' Co C c 0. d CO r > � --• O o 0 0 0 0 0 0 0 0 0 c o 0 0 0 0 c 0C\j o 0 0 o c c o 0 0 0 0 o p rn N U) O ' O O M O) co O O r Co r O 0o O 0o O N- N O d• (o st N r O C') co N O r°V) Ca r (\i st O O M 0 d' 0o O C°) 4 O (0 NO o 4 N r (o O co (0 r N U) O r st E I C J O O = N y G) J Z O O6.— M 00 (O U) O U) N CO N- U) N- N N L I L _ Cb N U) 00 0) O (o 00 h U) co0 co O O 6)Lc) d• n N U) h U) O N N 00 0) ni - > O r r U) M O Oto ,- O co N '- co O O (o N "t O ,-1. O Lo ,- O M N O M /8j 0 o N C4 N M O (O O 4 (0 U) t: n O M U1 U) M Or N N N M M M 1,.-:" O O 2 O 00 O) •.`o O 1 Q) 3 OT 'U0 co NL N N CO o r (0 N N CO O r CO N N M M r (O N N CO CO r C0 N N M CO r 0 > 0 O CO 0) 0) O O _ _ O) O) O O _ _ O) O) O O _ _ 0) 0) O O _ r 0) 0) O O r r 0. = N O O) O O O O O) O) O O O O O O O O O O O O O O O O O O) 0 0 0 0 N >+ >- r r N N N N r r N N N N r r N N N N r r N N N N r r N N N N (n U.• 0 "o O M CCD O to a O _ c o (0 3 3 a n (0 Q C o g = Y � °�' a U I C0) 0 3• � N Q = o : co— CD ;uaZ{o;ueid in 0• p 3y I— in Es as I © I iski Table A-21. Preferred Location of New Housing Unit, 2016 County of Residence Honolulu Maui Hawaii Kauai State Preferred Next Location Count Pct. Count Pct Count Pct. Count Pct. Count Pct. HONOLULU PUC 38,128 44.4% 379 2.4% 856 5.2% 125 2.7% 39,488 32.2% Central O'ahu 16,372 19.1% 6 0.0% 36 0.8% 16,414 13.4% East Honolulu 7,974 9.3% 50 0.3% 223 1.4% 8,248 6.7% Leeward O'ahu 10,635 12.4% 29 0.2% 193 1.2% 29 0.6% 10,886 8.9% Windward O'ahu 8,778 10.2% 104 0.7% 52 0.3% 14 0.3% 8,947 7.3% Oahu,any 266 0.3% 86 0.5% 25 0.2% 64 1.4% 441 0.4% 3 HAWAII South Kona-Kali 523 0.6% 78 0.5% 616 3.8% 89 1.9% 1,306 1.1% Puna 88 0.1% 44 0.3% 1,141 7.0% 4 0.1% 1,276 1.0% North&South Hilo 856 1.0% 107 0.7% 5,806 35.5% 31 0.7% 6,800 5.5% North Hawai'i 376 0.4% 31 0.2% 1,966 12.0% 60 1.3% 2,431 2.0% North Kona 662 0.8% 87 0.6% 3,429 21.0% 11 0.2% 4,188 3.4% Waimea(Hawai'i Island) 0.0% 0.0% 1,064 6.5% 0.0% 0.0% Hawaii Island,any 252 1.5% 252 0.2% MAUI j Hana 550 0.6% 233 1.5% 17 0.1% 784 16.7% 1,583 1.3% Makawao-Pukalani-Kula 10 0.0% 3,747 23.8% 89 0.5% 7 0.1% 3,852 3.1% Wailuku-Kahului 256 0.3% 4,052 25.7% 18 0.1% 4,325 3.5% 1 Paia-Haiku 1,061 6.7% 6 0.1% 1,067 0.9% Kihei-Makena 91 0.1% 2,973 18.9% 112 0.7% 240 5.1% 3,415 2.8% West Maui 1,583 10.1% 157 1.0% 246 5.3% 1,986 1.6% Molokai 256 1.6% 10 0.2% 266 0.2% Lanai 156 1.0% 156 0.1% , Maui,any 195 0.2% 631 4.0% 139 0.9% 14 0.3% 979 0.8% KAUAI Waimea(Kaua'i) 225 4.8% 1,289 1.1% I Koloa 536 11.5% 536 0.4% Lihue 17 0.1% 844 18.0% 861 0.7% Kawaihau 122 0.1% 39 0.2% 108 0.7% 595 12.7% 864 0.7% Hanalei 79 0.5% 266 5.7% 344 0.3% Kauai,any 4 0.0% 8 0.0% 447 9.5% 459 0.4% Total 85,880 83.4% 15,751 89.7% 16,349 80.9% 4,681 72.6% 122,663 83.4% Total No Preference 17,066 16.6% 1,818 10.3% 3,853 19.1% 1,764 27.4% 24,500 16.6% Total Effective Demand Move 102,946 100.0% 17,569 100.0% 20,202 100.0% 6,445 100.0% 147,163 100.0% Source Housing Demand Survey, 2016 I I 11 Hawaii Housing Planning Study,2016 _ Page 108 I ©SMS, Inc December,2016 L -o ZS ON C N 15 a E 0 aa, o 0 L E .0__ -(,) ca O O O O O O O O O O O OD 0 , o 0- •0- 0- 0- 0- 0- o o 0 0 0 0 0 CD ('�J O O O r o N o 0 0 0 0 0 0 co- r o r 00 i , T Cn O) '�1' cv I� 1� N CO CO N- (/) N N Co CO O O Co Cn i--� CO (N co. Co r CO r (Q O N O r N V �- N co4 N U i coRI Li 72) O d' O O O O O O O O O O O O CO o o o o" o o 0 0 0 0 0 0 0 Y r CO CO (O M Lo O d' CO CO r- ° co N C• E t - O CO • 0) O Co Co I • co C co 4 � r Co r r r co co r N CV U c oD z — ^ 0 a) LN = 3 M \ \ o \ 0 0 0 0 0 0 0 •0 \ \ \ o al O o O \ o \ \ \ \ \ \ \ \ 0' 0 0 0 \ 0 0- 1---N N co N M N- N CO r �p N- N t17 I� M co N +' L N M N C() O N r r 0 O Co N- N V. M M E t - L m O O a) 4 Z '' Y . C L CD •`+ 2 th a- CO 7 N-- 0:1 o 0 0 0 0 0 0 0 0 0 O o o o o 0 0 0 0 0 0 _ 3 (/� p Co Co r- _ . 4 N- N CO Co I,- CO CO Co 0) co '♦J pj O O CO N r r r [� Co CO N N O CO r 1� a) .� = C r CO CO CO r r In N N vr (N L H Ca L O Cl) 0 U Z L C(I) O .« CD O Cp Co \ \ o \ 0 0 0 0 \ \ \ \ \ o i CO 0 0 \ o \ \ \ \ 0 0 0 .- a) 0 \ Cr" 0 N co r CO C4 N r CO C0 (0 co d O N Cfl O N- Q. �) M O CO co r- O •r Cj N LU CO Co r 6 N N LO O '03 r f- N O r CV r CO M CO L C C. CO O >, I 17 W 0 Y LJ .2� � O u) O ... Q "O •V CO CC7 0 0 o 0 0 0 0 0 0 0 a) 0 c Co O CO Co M N O) O N CO I` co C) CA 4CO- 1- i = u) O 00 (o 00 M N CA V CO N CO • u) (I) L Y 00 r N CO O O Co r! r co co r M r 'zr C) L V N ,O r C as I- m i-tio ›. co I— X p C Co L . OO N 0 U iz— a) T Z o a) ui w Zm 0 co M }. 0 E c _ 00 co _ 100 OO fx EEEoJNc m O o 0 0 d _ c a a) 't o " °) W o Q w Y co m Q � Cl)u) a m s o o 3 co o o CO .10 3 s o m .0 40 c a X O O O W cn U o Q U O z 0 cn �- I� O r N M d Cr) } W W o=O — L >— L Z (.130) m z -I ~ m m it> _ _ a) E cu O w z > m 2 :3 � < H o F E- H z z in = 0 L O 0 I N u) 0) N f6 o W 1 U N 0 (3) 0 0 0 0 0 0 0 0 0 0 0 0 ....9 I R co 0 0 0 0 0 0 o 0 0 0 0 0 O O tr) O CO U') M (o c1) co s- C) CO cO V V OC! co I` Cfl Cfl M uj N- O O Lo 4 CO V 4 M N 'c N N — N N N- A-- d N '= of 0 0 0 0 0 0o000000I L . N co S- O O O O N La M N co 00 M U) Z Y of N O) (A co p Co N O (o V (0 N I- co co N N N N N- - d N 1 'to p o 0 0 0 0 0 0 0 0 ..„0 ..s...." 0 0 0 ' 3 N O O U O O) v. co co N- O O co U) C l0 O V La 4 M Cc) O) 'zt ,t. La Co 00 NN OI Z = .- N N' N N '— N N CV N- O .'n 2 c) 'C .0 . .- co 0 r .8.,....:, 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Lo 0 0 0 0 0 0 0 0 0 0 0 o (n p O co ti O O CA ° ° O a) N I- N CO R a O Co 7 O r •- (f) O O N N- O LO O) to C .- N — Lc) N N ‘-• M N I� •- s- V N CO = t ill0 O Z R Opo ' 0 0 0 0 0 0 - 0 ' 0 0 0 0 0 0 tD = M- po to Lo N ti Lo V ° C3) L N- CO O s- CO M 3 co O l() N- .- co N N 4 C') N- CC) N n' , N N 'I N N co N '- M (0 - ' '1- N .-- r_ I co Y j = 0 O o 0 0 0 0 0 0 0 0 ....9 0 0 (0 0 0 0 0 O. 0 0 0 0 0 0 O N d' Oco o) M O) N- M o) O O 0112 a CA N M O N -C() CO .- ti O C`') (3) V co N N— N (O 't N M N . CO N N co2 L N r O 3 _ co c0 >, a) C c O Oa) co C v O t a)U co(0 - O (ten 12 E as Q CO0m o � E aa, < = a`i E 6 aS I > to O Q U OL N O = 12 caE g co 0 cu (0 co U C F2 E a) I > 0 EI- C ( a) C a) o 'o , 0) 0 a) °) 2 _ N cn Z cn a) a) C ca n C �' ca O a) Z = O W -0 u) O I— vf) o o TJ) 2 m a) O 2 (Ty) 2 = Co a a J Z O O I C Co' (B c (13 C O W C + + 0 0 C .00 O W J s- M 2 (n 2 0_ D 2 cLD Q Z = (n N NCO Z E c vi ) W d' 0 0 c I= CO n 0 Z 0 = co rn n = O V 0 0 Z .? 0) N = ? I _ (n 0 u) m J W W 0 I 'o U I Q X (n W cn O a) = c O W O }a � O W E my cg H = H Y I t/) 0n . r (0 a- N a) 0) N N .1? a E a) C) a) 0 c>3 0 0 0 0 0 o 0 c c 0 0 0 0 0 0 O O of N LP) M N O Cf) M l0 a1 N Cn QN N 1 O M M N �fi O I� N O C>0 00 N • M O01 O I� N O 0) •to co e1 e1 N e-i r-I ei r-1 e—i N e1 a-I N N M a-I r-i C6 C O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 CO o 0 0 ,...i...3 0 e o ° o ° 0 ,, 0 o Y r In CO I� 00-, d' Cr) N CO N N CO N ° N o0 _C - ui O t— Lc) O O ti Cn r O • 'd' O Cn • N co t r r r N r r N r r CO r co r N r CO CO O Z ctI CO o 0 0 0 0 0 0 0 0 0 0 0 0 0 MI p o o o o 0 0 0 0 0 0 o 2 N CO O CO •cl• O CO a0 .?„1. N CO N CO p OO c0• CO O1"--. O r N I` CO O O O N r (\I r N r r r r N r • O r r O Z +N+ 0 U i I ) L O C j 0 0 0 0 0 0 o o 0 0 0 0 0 <6 V) p r In CO r O 4.--, CO i` O 0) O N a) Cr) N CO f7 73 a O a) CC) C) c0 N O I- O CC) ai '- C) • RS = r O r (N r r (V r 00 r r I� 00 CO N N CO r r ti I cs L V CD 0 N- Z 0 N CO o 0 0 0 0 0 0 0 0 0 0 0 0 Cl) 03 CO o 0 0 o o o o o o , o 0 0 0 C M CO CO CO N V r CO CO CO CO CO od CO N CO co Cn O N r 00 ,- Ni V' C() O M O c- l() 2 n- r. r r M r r O N r r r O r O CO CO r r O 40 INS r i3 C)r. R +.. Y N O �' o 0 0 0 0 •0 0 0 0 0 0 L a 0 0 0 0 o o N o C /:-.'. 0 0 0 0 _ _ to O co O C7 O MNr M N CO I� a) 0) 0 CO CO f� r• M CO O (� 1.0 (h CO CO N O CO N N C j CO r N r Cr) N-- r r N r r IL4?..,, C +`, 3 O 0 In 0 vi _ L . y O L O d > CO Q coCV D N L _ T t (I) LLI O Cr) O (� O � LLI a 7 U 0 0 O O O CT) O 00 Wo N C J Q p 0) 0) O 0) o O 0 +' COca o) E U O O V' O O W \ O U O N N N C I O I Z ,- fa 64 EA --I O ? OU O L O 0 c Cf3 O O O O C 111 \ \ C O ` Cr) a. Q t 0 c ir. = J O O O O 0 0 0 cu C o O O ~ C O O O O co O O O O Y O ,,�., 0 0 o O V o0 Y N , ' 2 p7 n M 2 2 +-• O O O O O U O O O N 2, W +' O L _ m J W N Cf) C(7 O In Z CO o0 O O O ~ p r > p c Q V) r N Lo m o 0 0 o N v W Z cp O z L vi w i-. EA EA ER to E 0 J co in c0 a0 r r N 73- O O = 2 D 3f Co H I-- 2 I (/) U) z O cI N 0) 0) N co a a I U N 0 (CI CO O O .r.:, \ O O o \ O I o .— rn N— 0) CO O O rn o r (0 r CO 0) ~ CO ,:r ca Ic Y oo0 0 0 0 0 0 0 0 0 0 co V co I� Co N- co O I r in 4 a0 r t() (O N OC) CO l--• co to 'V' Z R I R co ...5...) 0 0 0 0 0 ... 0 = N 4f (O CO CO I� . co p a0 .— a0 ti N t() op CO t, , co 0) .- co co Ln 0 Z co 0 V O 0 N , ) '"ii 0 c ea O Lo o 0 0 o 0 0 o I 3 U) p N- CO r 0) O) 1— LO ° (0 4-,., R M O N- N Md O O 4. = c ,_ 00 M 0) N N- CO LC) co ca L +-' 0 1 y z a V co f7 ti C4 r O) O = d t()- pp N- ..:1- �• j N N- ) •(� N c O O '- Co LU ,:t. O O 0 Ui is N Y ski d d .2 0 0 0 0 0 0 o co Y 0° '- rn rn M CO COO 4. N a) r 6. :C:3 I 2 Cl) C as p05 Lu a) O E 1=o n. ►— N o Q co 0 0 0 O =2 Ce Z a) 0) ? N W 0 ~ < c U) › D 0 CO 0 Wm co ai = J 0 U) O N to O as C O O W Ce (/)W W S 0) C CO O Q a) E c .0 W Q' O Q) 0 W U O c co o c I= W W (Ni 0 d O U) = E m 0 0 Q d H O m Oeci J O = N m L Q W .. c -o U) D O _ c m -J = u) 0 po ~ m 5 W 0 a D _ i s O = �- Z W J N = O= W Z Q S 2 n I co N F-- = a 2 0 2 0 c0 = 0 co N a) CO a) CO 4 a E a) U a) O O) o 0 Ln o 0 0 0 0 o O R co o o 0 0 0 0 0 0 N. a+ O) 0) ' N . N� O) 'V' O) Ln O O ° ( CO M ,— ti CO N N 4. CO co O N N v- s- 00 N C a) cts L C 3 o '�T O O o o 0 0 O O O O co co O) V 00 O .- ( 3 C O) LI' CO O V N N� N a) t M CO O N- N N v- CO O i O Z O a) 0 as a) R p o -4..0 O o 0 0 0 0 0 y i N M ti .- 0) 0) M M N- O) 't C •.0 Ci CO v- O CO CO ,- Ln N. N C • �- co O Cr) N .- .- 00 •'4:t: .(6 o E Z 2 WM O ti)4- 0 N U -(0 .i I 'D (I) r C a 3 m O o o N o o 0 0 0 o M a (C M O O O N N. M O 4' Co > O 3 TS O) r N N CO O CO O) O O E (C C ,- co O N N r- N •- N- N O I tC % 'cp r a) -c t w O o 0 Z a) E (a (6 f4 000 0 o O) o o 0 0 0 o O O O C co M CO c- C) Ln Zr O CO E .E D co n- LO tO O (Ni .- v- N 070 Oa) L r w — O N 5 i= O :� R 0 as as as 3 Y 03a) Ili 03 0 m D Ii 0 (p U) o o O o o o 0 o O C O C U) O V O (N d- 4 N. CO r.-- (C6 (6 O co O N CV M CO O O Y co- N N. ' ' N O N CO CO > > C) L O L r-+ L rte-) 7 'CS> Oi O (aO La -o > - _ Eco >' = 3 3 I C o L U Z ce No 3 L ai (Ln Z o W , o a) m O a) N a) O (U (n O D w TsN Io p W > >0 0 ai U) N (n O co o a 5 Z al N o C O Z o 2 E �0 _ aa) aa))al L E O Q E >2 rn ' C W > O Z — J E N in m X .m c W N] 2 2 m m (n O co ° Q . o o W > > 0 c) D aEi a 0 0 } Z° W > - co 2 o 2 2LU > o E 0 C CO J H O Z Z V ai V O n c a) E ~ Q Z_ < U- , ii W > 1° vi li O 0 J LL O N Fes- H W �/) 0.. W (n w n ) 00 1 - � - § � k E a a 7 / / 0 / / / / / / ° co v• co ( a — N I e $ / $ co a CO / a CU co / / / / / / / / / N © 5 ® ® @ r 0 7 $ / # ® % ,- # 0 2 % 2 .(06. / / / / / ƒ _ / # m m r e t v.- f 7 ¢ / o / / o I 2 In 0 _o 3I q n / / / / / / / / m \ q@ £ 3 g e ¥ N- g; f 2 co $ \ q a r / / » E ■ ai 2I o c / $/ I® e e / / / / + / / / I f c co w co c c co m # o a e \ ? ¢ / / • ¢ N - / 2 CU \ kI = 2 = e /46 2 o f \ CO / / / / / / / 0 k ƒ 2I co ® o o w = ¥ r o & o Y ' / N / CO N $ / / k 2 $ C k 0 k as k 2 _ I \ U) C E \ E 3 __ £ 2 \ = I§ 0 ƒ ] / ¥ § % / c % \ ¢ cn m 41) / \ e q mN / \ I 2it LIJ P. c I z CO o w » m e 0 0 co 2 3 < m a c % a G § 2 $ ƒ / / 3 / \ ƒ k / \ \ To n / / I § Z w � % $ ¢ < m I- < ® » « 2 z I I- LU 2 = > w x m \ 2 g CC) } U 2 Z i- n k2 2a m S Z al \ ƒ 0 / III Lu ƒ / a § / / } k @ ia i b o ; m $ $ 2 co & a 0 R / mjm \ \ I L LTable B-7. Buyer Unit Preferences, County and Districts of Hawai'i, 2016 Hawaii Districts ISouth North and North North Kona to Puna Ka`u South Hilo Hawaii Kona Total TOTAL BUYER HOUSEHOLDS 1,107 2,579 3,366 1,474 2,882 11,408 LPREFERRED UNIT TYPE Single family home 89.8% 76.6% 82.7% 76.1% 79.2% 80.3% L Townhouse 1.1% 0 3% Condo 16.8% 7.0% 5.9% 6.4% 8 3% Other 3 8% 1 1% LNot Sure 10.2% 6.6% 5.4% 18.0% 14 3% 10.0% PREFERRED NUMBER OF BEDROOMS Studio or One 1.1% 2 9% 1.2% 1.3% Two 13.7% 28.6% 25.9% 28.8% 14.5% 22 8% Three 56.7% 61.6% 62.2% 62 0% 62.7% 61.6% LFour plus 28.4% 9.9% 9.0% 9.2% 21.6% 14.3% MINIMUM ACCEPTABLE BEDROOMS One 14.1% 11 9% 0.5% 10.6% 9.3% Two 71 7% 72 3% 57.6% 70.4% 70.2% 67.4% Three 3 1% 11 5% 28.1% 22.8% 19.2% 18.7% Four plus 25.2% 2.1% 2.4% 6.3% 4.7% PREFERRED NUMBER OF BATHROOMS I One One and one-half 1.1% 0.5% 7 0% 1 1% 1.4% 6.1% 4 1% 8 3% 4.4% Two 63.8% 70.6% 70.1% 47 5% 68.1% 66 2% I Two and one-half 8.9% 12.5% 6.4% 24.2% 4 6% 9.9% Three 14.1% 13.5% 10.0% 9 8% 14 0% 12.2% Three and one-half 1.7% 6.9% 7 4% 3.9% 4.4% I Four or more 12.1% 1.7% 1.6% MINIMUM ACCEPTABLE BATHROOMS 11. One 46 5% 18.7% 32.1% 13.3% 33.2% 28.3% One and one-half 1.7% 6.9% 15.1% 14.6% 18.3% 12.5% Two 31.1% 68 6% 48 5% 61.4% 39.7% 51.0% I Two and one-half 4.4% 0 7% 4.3% 6 2% 3 4% Three 4.8% 3.5% 2.7% 2.0% I Three and one-half 2.1% 7.6% 1.1% Four or more 9.4% 1.7% 3.1% 1 7% I Source: Hawai'i Demand Survey,2016 I Hawaii Housing Planning Study,2016 Page 115 ©SMS, Inc. December,2016 I Table B-8. Renter Unit Preferences, County and Districts of Hawai'i, 20162 Hawaii Districts South North and Kona to South North North Ka`u Puna Hilo Hawaii Kona Total TOTAL RENTER HOUSEHOLDS 245 1,339 2,373 981 2,248 7,186 PREFERRED UNIT TYPE Single family house 44.5% 75.3% 56.4% 59.9% 57.4% 60.3% Townhouse 4.9% 1.7% 7.8% 4 3% I Condo 4.9% 1.7% 7 8% 4.3% Apartment 51.7% 13.6% 28 3% 25.5% 18 1% Other 21.1% 15.4% 0.2% 9.1% I Not Sure 3 8% 3.6% 9.7% 7 7% 5.9% 6.9% PREFERRED NUMBER OF BEDROOMS I Studio or One 18.1% 8.5% 14.9% 10.8% Two 63 2% 21.5% 48.9% 40 6% 32 0% 37.9% Three 14.8% 46.6% 37 1% 36.7% 39.5% 38.8% 1 Four plus 22.0% 13.7% 5.5% 22 7% 13 6% 12.5% _ MINIMUM ACCEPTABLE BEDROOMS I One 21 9% 22.2% 14.7% 7.6% 15.7% Two 40 3% 55.2% 56.8% 58.7% 75.9% 62.5% Three 59 7% 17.9% 20 4% 7.4% 14.9% 17.0% 1 Four plus 1.6% 0.5% PREFERRED NUMBER OF BATHROOMS One 21.4% 17.1% 37 2% 5.2% 16.3% One and one-half 24.9% 13.9% 4.1% 4 7% 11.2% I Two 100 0% 50.5% 66.1% 58 7% 82.6% 68.5% Two and one-half 1.5% 2.5% 1 3% Three 3.2% 1.0% 4.2% 2.2% I Four or more 0.4% 0.9% 0.4% MINIMUM ACCEPTABLE BATHROOMS I One 88.8% 73.4% 76.4% 79.3% 65.0% 72.5% One and one-half 18.6% 19.9% 15 0% 4 9% 12.4% Two 11 2% 8.0% 3.7% 5 7% 30 1% 15.1% I Two and one-half Source: Hawaii Demand Survey, 2016 Base for Total Renter Households are effective demand households who plan to rent I I Hawaii Housing Planning Study,2016 Page 116 I ©SMS,Inc. December,2016 L LTable B-9. Preferred Next Location, County and Districts of Hawai'i, 2016 Hawaii Districts North L South and Kona to South North North Kali Puna Hilo Hawaii Kona Total I PREFERRED LOCATIONS OF NEXT UNIT-BUYERS PUC 3.3% 5.5% 1.4% 2.6% I Central Oahu 3.0% 0.8% East Honolulu 6.1% 1.2% 2.0% Leeward Oahu 0.7% 0.2% F Windward Oahu 2.0% 8.0% 0.5% South Kona Kau 6.8% 0.3% 1.2% 2.7% Puna 2.5% 17.9% 6.8% 6.3% i North &South Hilo North Hawaii 4.5% 34.8% 58.3% 3.4% 26.0% 10.1% 2.9% 52.5% 2.8% 10.6% North Kona 23.8% 1.7% 5.5% 63.5% 19.4% f liana 0.7% 0.1% Wailuku-Kahului 0.5% 0.2% Kihei-Makena 3.0% 0.8% II Waimea 6.9% 5.0% 9.7% 2.9% 5.0% Kawaihau 3.0% 0.8% Maui, any 2.0% 0.5% 0.6% I Hawaii Island any 0.8% 2.4% 0.8% No Preference 60.5% 13.8% 11.4% 26.4% 20.1% 20.9% Total Effective Demand Buyers 1,107 2,579 3,366 1,474 2,882 11,408 IPREFERRED LOCATIONS OF NEXT UNIT-RENTERS PUC 2.9% 8.1% 26.1% 1.0% 7.1% Leeward Oahu 4.7% 3.2% 2.5% South Kona-Kau 29.7% 1.0% i Puna 3.8% 28.1% 1.6% 5.9% North &South Hilo 28.1% 74.9% 30.0% North Hawaii 24.6% 4.6% 4.8% North Kona 29.4% 10.0% 0.5% 60.2% 21.8% Makawao Pukalani Kula 0.4% 3.5% 1.2% Kihei-Makena 1.1% 0.4% i West Maui6.6% 2.2% Waimea 13.2% 13.8% 7.0% 6.6% Hanalei 29.7% 0.3% 1.1% E Maui, any 3.3% 1.0% Hawaii Island any 7.4% 10.8% 2.3% No Preference 6.8% 2.6% 34.9% 16.8% 12.2% ITotal Effective Demand Renters 245 1,339 2,373 981 2,248 7,186 Source: Hawai'i Demand Survey, 2016 1 I Hawai'i Housing Planning Study,2016 Page 117 ©SMS, Inc. December,2016 I Table B-10. Current and Affordable Housing Payment, County and Districts of Hawai'i, 20163 Hawaii Districts South11 Kona to North and North North Kali Puna South Hilo Hawaii Kona Total AVERAGE CURRENT MORTGAGE AMOUNT Single Family Unit $1,011 $1,138 $1,367 $1,672 $1,763 $1,379 Multi-Family Unit $1,724 $1,550 $838 $1,462 $965 $1,106 I All Units $1,003 $1,140 $1,345 $1,653 $1,629 $1,357 AVERAGE CURRENT RENT AMOUNT I Two-Bedroom Unit $914 $1,111 $1,038 $814 $1,366 $1,153 All Units $900 $1,120 $1,030 $1,211 $1,354 $1,164 AFFORDABLE MORTGAGE I PAYMENT Less than $500 10.0% 9.4% 5.3% 6.4% $500 to $799 29.3% 9.5% 15.8% 9.0% 7.1% 12.5% I $800 to $1,099 14.8% 13.2% 10.8% 1.3% 2.5% 8.3% $1,100 to$1,399 8.6% 23.1% 18.3% 12.5% 9.7% 15.5% $1,400 to$1,699 6.4% 17.6% 7.4% 13.6% 28.1% 15.7% 1 $1,700 to $1,999 7.3% 10.4% 7.3% 3.7% 4.2% 6.8% $2,000 to $2,999 8.2% 16.2% 19.7% 30.4% 22.1% 19.8% $3,000 to $3,999 2.4% 3.0% 8.2% 9.8% 4.7% $4,000 or more 3.0% 7.4% 4.0% 2.9% Not Sure 23.2% 5.3% 14.0% 7.1% 7.4% I Average Affordable Mortgage $888 $1,029 $1,640 $1,640 $1,453 $1,228 AFFORDABLE RENT PAYMENT Less than $300 12.7% 16.7% 9.0% 10.5% I $300 to $499 59.4% 3.7% 5.4% 20.3% 1.0% 7.3% $500 to $799 25.8% 26.6% 33.1% 2.1% 12.7% 20.4% I$800 to $1,099 24.6% 25.5% 34.1% 14.7% 22.1% $1,100 to$1,399 14.8% 9.8% 3.6% 16.8% 10.5% 9.3% $1,400 to $1,699 11.7% 6.7% 8.6% 4.2% 6.9% I $1,700 to$1,999 8.2% 11.7% 5.1% $2,000 to$2,499 8.5% 7.2% 13.8% 8.4% $2,500 to $2,999 1.2% 2.2% 1.1% I $3,000 or more 7.2% 2.4% Not Sure 2.5% 0.6% 9.9% 12.8% 6.4% I Average Affordable Rent $560 $950 $841 $1,003 $1,459 $1,070 Source Hawai'i Demand Survey, 2016 I I Hawaii Housing Planning Study,2016 Page 118 I Co SMS, Inc. 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Vacancy Categories, 2009 -2014 Total Available Total Occupied Vacant Vacant and Units Current Housing Housing Housing Available (Housing Residence Statewide Units Units Units Units Stock) Elsewhere Seasonal 2009 505,087 437,976 67,111 23,496 461,472 12,633 29,786 I 2010 512,157 442,267 69,890 26,240 468,507 12,526 29,955 2011 516,394 445,513 70,881 28,163 473,676 11,582 29,564 1 2012 519,811 447,453 72,358 28,193 475,646 11,310 30,624 2013 522,164 449,771 72,393 27,155 476,926 11,350 31,854 I 2014 524,852 450,299 74,553 27,221 477,520 11,160 33,054 ch from g' 2.5% 1.8% 6.7% 3.7% 1.9% -10.9% 10.3% 1 2010-2014 Source: ACS 2009-2014 Table DP04, B25007 Table C-3 summarizes the current housing vacancy status for the State of Hawaii over the years of 2009-2014 I The total housing units shows us how many total housing units there are in the State of Hawai'i, regardless of whether they are occupied or vacant. In 2014, there were 524,852 housing units as opposed to 505,087 in 2009, which was an increase of 2 5%. Of the 524,852 housing units, 450,299 (85.8%) of them are occupied by households and the remaining 74,553 (14.2%) units are vacant. Not all of the vacant units are available for sale, or for rent to the housing market. Vacant and available units excluded vacant units that are not available to the residents. In 2014, vacant and available units account for only 36.5% of the total vacant housing units in contrast to 35.0% in 2009, an increase of only 1.5 percentage point over the past five years. Summing the vacant and available units with the occupied housing units define the total housing stock. In 2014, the number of vacant and available housing units was about 5 7% of the total housing stock. This reflects an increase of only 0.6 percentage point since 2009 I I I I I I I Hawaii Housing Planning Study,2016 Page 122 I © SMS,Inc. December,2016 i I 6 LAPPENDIX D: LAND USE REGULATION INDEX Table D-1. Wharton Residential Land Use Regulation Index by State L1 Hawai'i 2.32 1 2 Rhode Island 1.58 17 I 3 Massachusetts 1.56 79 4 New Hampshire 1.36 32 5 New Jersey 0.88 104 6 Maryland 0.79 18 7 Washington 0.74 49 8 Maine 0.68 44 9 California 0.59 182 10 Arizona 0.58 40 11 Colorado 0.48 48 12 Delaware 0.48 5 13 Connecticut 0.38 65 14 Pennsylvania 0 37 182 15 Florida 0.37 987 16 Vermont 0.35 24 17 Minnesota 0.08 80 18 Oregon 0 08 42 L 19 Wisconsin 0 07 93 20 Michigan 0.02 111 21 New York -0.01 93 22 Utah -0 07 41 23 New Mexico -0 11 16 24 Illinois -0.19 139 25 Virginia -0.19 35 26 Georgia -0.21 56 27 North Carolina -0.35 64 28 Montana -0.36 6 29 Ohio -0.36 135 30 Texas -0.45 165 31 Nevada -0.45 7 32 Wyoming -0.45 7 33 North Dakota -0.54 8 L 34 Kentucky -0 57 28 35 Idaho -0.63 19 36 Tennessee 0 68 41 37 Nebraska -0 68 22 L 38 Oklahoma -0 70 36 39 South Carolina -0.76 30 40 Mississippi -0.82 21 41 Arkansas -0.86 23 III 42 West Virginia -0 90 15 43 Alabama -0.94 37 44 Iowa -0.99 59 45 Indiana -1.01 47 I 46 47Missouri -1.03 67 South Dakota -1.04 11 48 Louisiana -1.06 19 49 Alaska -10.7 7 50 Kansas -1.13 46 Source: Gyourko, Joseph, Albert Saiz, and Anita A Summers, 2007. A New Measure of the Local Regulatory Environment for Housing Markets The Wharton Residential Land Use Regulatory Index. The Wharton School, University of Pennsylvania, Final Version: March 29, 2007. I Note: a The Wharton Residential Land Use Regulatory Index is an aggregate measure of the eleven sub-indexes that intended to capture the stringency of local regulatory environment across the U.S. I I Hawai'i Housing Planning Study,2016 Page 123 ©SMS, Inc December,2016 APPENDIX E: SPECIAL NEEDS HOUSING Table E-1. Special Needs Population and Housing Summary, City & County of Honolulu, 2011 CITY&COUNTY OF HONOLULU Affordable fiH In Need of Unmet Total SN Pop. %of Total Housing Supportive Housing Special Needs Population Count Population Inventory Housing Need Elderly 169,361 17.8% 4603 Frail elderly 5,281 0.6% Exiting offender 1,376 01% Persons with alcohol or other drug addictions 98,848 10 4% Persons with disabilities 87,950 9.2% Persons with developmental disabilities 1,700 0.2% Persons with HIV/AIDS 1,624 0.2% Persons with severe mental illness 47,660 5 0% 144 Victims of domestic violence 0.0% Youth exiting foster care 128 <0 1% Total 226 SN Table E-2. Special Needs Population and Housing Summary, County of Hawaii, 2011 COUNTY OF HAWAII Affordable HH In Need of Unmet Total SN %of Total Housing Supportive Housing Special Needs Population Pop.Count Population Inventory Housing Need Elderly 34,368 18.6% 651 Frail elderly 1,674 0.9% Exiting offenders 267 0.1% Persons with alcohol or other drug addictions 17,749 9.6% Persons with disabilities 22,004 11 9% Persons with developmental disabilities 330 0.2% Persons with HIV/AIDS 315 0.2% Persons with severe mental illness 9,254 5.0% 46 Victims of domestic violence 1,078 0 6% Youth exiting foster care 20 <0.1% Total 89 SN a 1 Hawaii Housing Planning Study,2016 Page 124 ©SMS,Inc. December,2016 L LTable E-3. Special Needs Population and Housing Summary, County of Maui, 2011 COUNTY OF MAUI LAffordable HH In Need of Unmet Total SN Pop. %of Total Housing Supportive Housing Special Needs Population Count Population Inventory Housing Need Elderly25,328 16.4% 684 Frail elderly 1,021 0.7% LExiting offenders 223 0.1% Persons with alcohol or other drug addictions 12,108 7.8% Persons with disabilities 13,186 8 5% Persons with developmental disabilities 276 0.2% Persons with HIV/AIDS 264 0.2% Persons with severe mental illness 7,742 5 0% 53 LVictims of domestic violence 0.0% Youth exiting foster care 17 <0.1% Total 95 SN Table E-4. Special Needs Population and Housing Summary, County of Kauai, 2011 LCOUNTY OF KAUAI L Affordable HH In Need of Unmet Total SN %ofTotal Housing Supportive Housing Special Needs Population Pop.Count Population Inventory Housing Need Elderly 12,594 18 8% 246 Frail elderly 725 1 1% I Exiting offenders 97 0.1% Persons with alcohol or other drug addictions 5,884 8.8% Persons with disabilities 7,295 10 9% IL Persons with developmental disabilities 120 0.2% Persons with HIV/AIDS 115 0.2% Persons with severe mental illness 3,355 5 0% 41 CVictims of domestic violence 0.0% Youth exiting foster care 7 <0.1% I Total 27 SN Sources: Elderly data from Census 2010 Frail elderly data from HPS Housing Demand Survey 2011 I Exiting offenders'data from Bureau of Justice Statistics,Probation and Parole in the United States-2009 Not available at the county level so State data was distnbuted according to proportion of the population. Substance abuse data from SAMHSA,Office of Applied Studies,National Survey on Drug Use and Health,2006-2008 Persons with disabilities data from ACS 2009 I Persons with developmental disabilities data from DDD,CMISB-Report to the 2009 Legislature pursuant to Act 303,SLH 2006 HIV/AIDS data from 2011 HIV/AIDS Surveillance Report Mental illness data from Hawaii Department of Health,Adult Mental Health Division Domestic violence data from the Hawai'i Department of Human Services(DHS) I L Hawaii Housing Planning Study,2016 Page 125 ©SMS,Inc December,2016 I Table E-5. AMHD Statewide Current and Planned Housing Inventory, 2004-20123 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total 24-Hour Group Homes Oahu 36 53 68 75 24 16 32 24 16 344 3 Maui 0 8 0 8 16 0 8 8 0 48 Hawaii 24 0 24 8 24 16 8 8 8 120 Kauai 0 10 0 0 8 8 8 0 0 34 Total 60 71 92 91 72 40 56 40 24 546 8-16 Hour Group Homes Oahu 57 24 14 44 32 16 32 16 16 251 Maui 5 6 0 8 18 8 0 8 8 61 Hawaii 16 0 20 8 16 8 8 8 8 92 Kauai 4 0 5 0 9 0 8 0 0 26 Total 82 30 39 60 75 32 48 32 32 430 Semi-Independent Living Oahu 55 72 5 0 0 0 5 0 5 142 Maui 21 0 -5 0 0 5 0 5 0 26 Hawaii 30 0 5 5 5 0 0 0 5 503 Kauai 18 -4 0 0 0 0 0 5 0 19 Total 124 68 5 5 5 5 5 10 10 237 Licensed TLP I Oahu 0 0 0 0 40 0 5 0 0 45 Maui 0 0 0 0 0 8 0 0 0 8 Hawaii 0 0 0 0 0 16 0 5 0 21 Kauai 0 0 0 0 0 0 5 0 0 5 Total 0 0 0 0 40 24 10 5 0 79 Licensed Specialized Residential Oahu 37 -15 0 0 16 0 0 0 0 38 Maui 0 0 0 0 0 0 0 0 0 0 Hawaii 0 0 0 0 0 0 0 0 0 0 Kauai 0 0 0 0 0 0 0 0 0 0 Total 37 -15 0 0 16 0 0 0 0 38 Licensed Specialized Residential (Dual) Oahu 69 0 8 0 5 0 5 0 5 92 Maui 0 4 4 0 0 0 5 0 5 18 Hawaii 0 0 0 0 0 16 0 0 0 16 Kauai 0 0 0 0 0 0 0 0 0 0 Total 69 4 12 0 5 16 10 0 10 126 I Licensed Crisis Residential Oahu 19 -3 0 0 0 0 0 0 0 16 Maui 8 -4 4 0 0 0 0 0 0 8 I Hawaii 5 4 0 8 0 0 0 0 0 17 Kauai 0 0 0 0 5 0 0 0 0 5 Total 32 -3 4 8 5 0 0 0 0 46 Safe Haven (Homeless) Oahu 25 0 0 0 0 0 0 0 0 25 Maui 0 0 0 0 12 0 0 0 0 12 Hawaii 0 0 0 0 0 0 0 0 0 0 Kauai 0 0 0 0 0 0 5 0 0 5 Total 25 0 0 0 12 0 5 0 0 42 Source State of Hawai'i Adult Mental Health Division, Community Housing Plan for Adults with Severe and Persistent I Mental Illness, 2008-2012. Nov. 2007 p.22. I Hawaii Housing Planning Study,2016 Page 126 I ©SMS, Inc. December,2016 L L Table E-5. AMHD Statewide Current and Planned Housing Inventory, 2004-2012 (continued) 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total Supported Housing/ Bridge Subsidy L Oahu 185 0 0 0 0 50 0 50 0 285 Maui 50 0 0 0 0 40 0 25 0 115 Hawaii 70 0 0 0 0 40 0 30 0 140 L Kauai 27 0 0 0 0 10 0 5 0 42 Total 332 0 0 0 0 140 0 110 0 582 Consumers Moved from Bridge to Section 8 8 L Oahu 67 26 50 45 35 25 25 25 25 323 Maui 13 15 8 20 20 30 18 15 10 149 Hawaii 5 12 7 25 25 25 15 10 10 134 L Kauai 5 2 3 15 10 15 10 8 7 75 Total 90 55 68 105 90 95 68 58 52 681 Shelter Plus Care to Rental Subsidies(Homeless) Oahu 85 144 12 0 0 14 20 20 25 320 L Maui 0 0 18 0 0 0 12 0 14 44 Hawaii 0 24 10 14 0 18 0 14 12 92 Kauai 0 0 0 10 0 0 0 10 0 20 ITotal 85 168 40 24 0 32 32 44 51 476 Consumers Moved from Shelter Plus Care to Section 8 Oahu 0 15 20 35 25 25 20 25 20 185 L Maui 0 0 1 1 8 10 10 12 10 52 Hawaii 0 0 7 7 15 15 15 15 10 84 Kauai 0 0 0 0 3 3 5 3 5 19 LTotal 0 15 28 43 51 53 50 55 45 340 Office of Social Ministry in partnership with HPHA and AMHD Beyond Shelter Apts. 0 0 41 0 0 0 0 0 0 41 Kihei Pua 0 0 72 0 0 0 0 0 0 72 L Ponahawaiola Apts. 0 0 28 0 0 0 0 0 0 28 Total 0 0 141 0 0 0 0 0 0 141 Total Housing Capacity-Year ITotal Housing 936 393 429 336 371 437 284 354 224 3,764 Source State of Hawai'i Adult Mental Health Division, Community Housing Plan for Adults with Severe and Persistent Mental Illness, 2008-2012. Nov 2007 p.22 I I I I I 1 I Hawaii Housing Planning Study,2016 Page 127 ©SMS,Inc. December,2016 Table E-6. Housing Affordability Estimates, 2016 Counties State Hawaii LHonolulu Kauai Maui Housing Wage $34 22 $22.96 $38.17 $23 81 $24.73 r� Housing Costs 2-bedroom fair market rent $1,780 $1,194 $1,984 $1.238 $1,286 Annual income needed to afford 2BR FMR $71,184 $47,760 $79,400 $49,520 $51,440 FT jobs at mini wage needed to afford 2BR 4.0 2.7 4.5 2.8 2.9 Area Median Income (AMI) Annual AMI $82,123 $57,600 $87,900 $74,300 $81,500 ' Monthly rent affordable at AMI $2,053 $1,440 $2,198 $1,858 $2,038 30% of AMI $24,637 $17,280 $26,370 $22,290 $24,450 Monthly rent affordable at 30% of AMI $616 $432 $659 $557 $611 Renter Households Renter households (2010-2014) 192,984 22,101 139,799 8,349 22,691 % of total households (2011-2014) 43% 34% 45% 37% 43% 1 Estimated hourly mean renter wage (2016) $14.53 $10.45 $15.39 $13.52 $13.41 Monthly rent affordable at mean renter wage $755 $543 $800 $703 $697 Full-time jobs at mean renter wage needed 2.4 2.2 2.5 1.8 1.8 to afford 2BR Source. 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Median Sales Price for Single-Family Dwellings by County, 2000-2014 1 [In thousand dollars, rounded to the nearest thousand] County Year Hawai'i Honolulu Kauai Maui State 2000 175 298 255 275 260 2001 188 300 287 298 269 t 2002 194 335 328 375 310 2003 235 385 366 440 360 2004 290 465 499 560 440 I 2005 385 590 639 678 560 2006 421 630 675 690 599 2007 395 645 650 630 595 I 2008 345 625 615 575 560 2009 278 580 470 498 498 I 2010 260 600 498 460 488 2011 246 579 455 432 470 2012 260 625 459 470 500 2013 295 650 529 530 544 2014 315 675 533 570 575 Source: The State of Hawaii Data Book 2014. 1 Table E-15. Median Sale Price for Condominium Units by County, 2000-2014 [In thousand dollars] County Year Hawaii Honolulu Kauai Maui State 2000 135 125 150 195 140 1 2001 140 132 162 197 145 2002 166 153 210 207 165 I 2003 185 175 287 241 185 2004 275 208 375 310 230 2005 370 269 435 385 299 I 2006 426 310 405 510 339 2007 395 325 565 550 350 2008 370 325 545 549 348 1 2009 277 305 330 450 319 2010 260 305 270 378 310 2011 213 300 237 310 290 I 2012 258 315 290 358 318 2013 250 332 310 374 333 I 2014 280 350 346 415 351 Source: The State of Hawaii Data Book 2014. I I Hawaii Housing Planning Study,2016 Page 136 I ©SMS, Inc December,2016 L APPENDIX F: CONSOLIDATED PLAN HOUSING GOALS LTable F-12. Five-Year Consolidated Plan Housing Goals: 2015-2019 Support Build/Rehab Financial Other Assistance Assistance Home Ownership Construct/rehab for sale housing Financial assistance to (1 housing unit) homebuyer(1 household) Self-help affordable housing(62 housing units) Low Income Rentals Construct new rental units(11 Tenant-based Rental housing units) Assistance(TBRA)(100 Rehab rental unit(1 housing unit) Households) Homeless Rapid Rehousing Emergency shelter financial assistance(275 operations(8,800 persons households) assisted) Hawai`i, Prevent homelessness Transitioning homeless to Kauai and financial assistance(150 permanent housing(1,830 IMaui persons) persons) Rapid County using relocation &st billiiz tion services(400 households) Prevent homelessness services(150 persons) Special Needs Housing Construct new special needs HOPWA tenant rental Emergency shelter rental units(25 housing units) assistance(75 operations to house victims Rehab special needs rental units households) of DV(3,100 persons I (3 housing units) assisted) Rehab transitional housing units HOPWA supportive services (33 housing units) (2,400 persons assisted) I Home Ownership Financial assistance to homebuyers(50 households) Housing rehab assistance (50 housing units) I Low Income Rentals Housing development(400 LMI services(50 persons) C&C households) Honolulu117 Homeless Housing First Housing(250 Homeless prevention Housing First Services(250 households) financial assistance(30 households) I Renovate homeless shelters(5 persons) Homeless Services(3,750 shelters) persons) Special Needs Housing Senior Services(50 persons) Youth Services(50 persons) I Domestic Violence Services (50 persons) Home Ownership 1 Affordable for-sale unit 51 financial assistance to 62 self-help affordable housing homebuyers units 50 housing rehab assistance 11Low Income Rentals 12 rental housing units 100 Tenant-based Rental 50 persons LMI services 400 Housing development Assistance(TBRA) Households Statewide Homeless 250 households Housing First 275 Rapid Rehousing 11,900 persons Emergency 5 homeless shelters renovated households shelter operations 180 Prevent homeless 3,750 Homeless services households 1,830 persons and 650 I l'i households Transitioning to permanent housing services Special Needs Housing 75 HOPWA TBRA 2,550 persons Other J households services I78 Based on the State of Hawai'i Consolidated Plan for Program Years 2015 through 2019(primarily focusing on Hawaii, Kaua'i and Maui Counties) 1 "' Based on City&County of Honolulu Consolidated Plan for Program Years 2015 through 2019 I Hawai'i Housing Planning Study,2016 Page 137 ©SMS, Inc. December,2016 a Table F-2. State and Counties Consolidated Plan 2015 Annual Goals r Support Build/Rehab Financial Other Assistance Assistance Home Ownership Construct new or Down payment/closing cost I acquire/rehab of existing assistance and gap loans affordable for-sale through homebuyer loan housing(6 housing units) program(1 household) Self-help housing(8 I housing units) Low Income Rentals Construct/rehab Tenant-based rental affordable rental housing assistance(20 households) (10 housing units) I Homeless Construct/rehab new Rapid Rehousing—financial ES Operations(1,655 Hawai`i, transitional housing for assistance(580 persons) persons) Kauai and homeless(32 housing Homeless Prevention— Transitioning Homeless to Maui units) financial assistance to PH(580 persons) County118 persons/families at risk of Rapid Rehousing— I homelessness(30 persons) Housing relocation& stabilization services(78 Households) Homeless Prevention— t relocation&stabilizations services(30 persons) Special Needs Construct/rehab HOPWA—financial assistance DV ES Operations(620 Housing affordable rentals for through tenant based rental persons) I special needs population assistance(15 households) HOPWA Supportive —(36 housing units) Services(516 persons) Home Ownership Financial assistance to LMI homebuyers(10 housing units) Loan assistance for rehab I existing homes(17 housing units) Low Income Rentals Construct/rehab Services to at-risk of Services to benefit LMI C&C affordable and special homelessness(1,333 persons) (185 persons) I Honolulu119 needs rental housing(52 Tenant Based Rental housing units) Assistance homeless prevention(497 persons) Homeless Acquire/rehab building or Housing First Tenant Based Homeless Services(2,348 I units to support Housing Rental Assistance(50 persons) First households) Special Needs Tenant Based Rental Housing Assistance(155 households) Home Ownership 6 affordable houses 1 housing unit down I 8 self help payment/closing cost assistance 10 housing units financial assistance to LMI I 17 housing units loan assistance to rehab existing homes Low Income Rentals 88 affordable rentals 517 persons tenant based Services(185 persons) I Statewide rental assistance Homeless 32 transitional housing 835 persons Housing 4,613 persons and 78 First/Rapid Rehousing Rental households Homeless financial assistance Services 3,006 persons Transition I services to permanent housing including Rapid Rehousing Special Needs 36 affordable rentals DV ES Operations(620 Housing 32 transitional housing persons) HOPWA Supportive Services(516 persons) 18 Based on the State of Hawaii Consolidated Plan for Program Years 2015 through 2019(primarily focusing on Hawaii, Kauai and Maui I Counties) 18 Based on City&County of Honolulu Consolidated Plan for Program Years 2015 through 2019 1 Hawaii Housing Planning Study,2016 Page 138 I ©SMS,Inc December,2016 L APPENDIX G: GLOSSARY Adequately Housed: Households that are not classified as at-risk for homelessness or hidden homeless. 50% Hawaiian: An individual is 50 percent Hawaiian if they claimed that status in the Housing Demand Survey. Only Respondents were asked to self-report ethnic status. A household is classified as 50 percent Hawaiian if the household includes at least one adult member who is 50 percent or more Hawaiian. Respondents were asked if there were other members of the household who were 50 percent or more Hawaiian. 50 percent Hawaiian households may or may not be DHHL beneficiaries (lessees or applicants). ADLs: Activities of Daily Living, which include assistance with eating, bathing, getting dressed, getting in or out of bed, or getting to the toilet. Acceptable Bathrooms: The number of bathrooms that are absolutely required in a new unit. Typically, an acceptable bathroom is a more accurate measure of housing characteristic for planning than first-choice preferred bedrooms. Acceptable Bedrooms: The number of bedrooms that are absolutely required in a new unit. Typically, an acceptable bedroom is a more accurate measure of housing characteristic for planning than first-choice preferred bedrooms. Affordable Housing: refers to the generalized concept of housing that residents have sufficient income and financial resources to be able to purchase or rent. In the U.S., commonly accepted guideline for housing affordability is a housing cost that does not exceed 30% of a household's gross income. Housing costs considered in this guideline generally include taxes and insurance for owners, and usually include utility costs. When the monthly carrying costs of a home exceed 30-35 percent of household income, then the housing is considered unaffordable for that household. Affordable Housing Cost: The average dollar amount that a respondent reported they would be able to pay per month for a new housing unit. Apartment: Refers to apartment building that contains residential suites in which each individual unit is leased to different occupants. Applicant Only: Households in which at least one adult member has applied for, but has not yet I been awarded, land from the Department of Hawaiian Home Lands. At Risk for Homelessness: Households in which members would become homeless is less than three months if they suddenly lost their primary source of income. Also called "precariously housed," these people are three monthly paychecks away from homelessness. Available Down Payment: The amount of money available to be used as a cash down payment for new housing. Churn Rate: For any given period of time, the number of participants who discontinue their use of a service divided by the average number of total participants. Churn rate provides insight into the growth or decline of the subscriber base, as well as the average length of participation in the service. Hawaii Housing Planning Study,2016 Page 139 ©SMS, Inc. December,2016 COL %: Represents the percentage of the column total for an individual cell in a table [Also referred to as Count Percent or vertical percent]. Condominium/Condo: An apartment building with five units or more in which each owner owns a unit and holds a joint ownership in common areas with other owners in the building. Contract Type: Refers to the two major ownership contracts: leasehold and fee simple. ' Count Percent: [See Col %]. Crowding Ratio: The average number of household members per bedroom per household. 1 Crowding Ratio by Bedrooms: Number of persons per bedroom. Does not include any rooms other than bedrooms. Households with more than 1.01 persons per bedroom are considered overcrowded [See also Overcrowded]. Crowding Ratio by Rooms: Number of persons per room. Includes all rooms other than closets, hallways, utility rooms, foyers, and lanais. DHHL: Department of Hawaiian Home Lands. This state agency has been responsible for administering the land trust that in 1921 established about 200,000 acres of land for homesteading by Native Hawaiians. For more information visit: http://www.Hawai'i.gov/dhhl/. Doubled-up: Housing units that are occupied by two or more families or groups of persons who are not related by birth, marriage, or adoption. Elderly: A person 62 years of age or older. ' Elderly Alone: Single member households, member is 62 years of age or older. Elderly Couple: Two-member households, male and female, at least one or which is 62 years of age or older. Emancipated foster youth: Youth who are aging out of the foster care system. P Equity Gap Funding: The amount of money needed to cover development costs for new or ' existing affordable rental or mixed-use project or projects for economic development activities directly related to affordable housing. These funds are intended to cover the difference between the projected ' Exiting offender: Inmates released from the prison system. Fee Simple: A fee simple estate is the least limited interest and the most complete and absolute I ownership inland. It is of indefinite duration, freely transferable and inheritable. The phrase "fee simple absolute" came about because the estate is of potentially infinite duration (thus "fee"); there are no limitations on its inheritability (thus "simple"); and it is indefeasible and cannot be divested (thus "absolute"). Frail elderly: Elderly afflicted with physical or mental disabilities that may interfere with the ability to perform activities of daily living independently (i.e., bathing, dressing, toileting, and meal preparation). 1 Hawaii Housing Planning Study,2016 _ Page 140 ©SMS,Inc. December,2016 Group quarters: A place where people live or stay, in a group living arrangement, that is owned or managed by an entity or organization providing housing and/or services for the residents. This is not a typical household-type living arrangement. Services may include custodial or medical care as well as other types of assistance. and residency is commonly restricted to those receiving these services. People living in group quarters are usually not related to each other. Group quarters include such places as college residence halls. residential treatment centers. skilled nursing facilities.. group homes, military barracks, correctional facilities, and workers' dormitories. Guamanian or Chamorro: Ethnicity of persons from Guam or the Mariana Islands region. HH: Household, person residing in a housing unit for five or more months of the year. Hidden Homeless: Households in which more than one family share accommodations. These households include families that are doubled up (two or more families or groups of persons who are related by birth, marriage or adoption) and those that are sharing (two or more families or groups whose members are not related by birth, marriage, or adoption). Homestead Land: Land entrusted bythe Hawaiian Homes Commission Act for homesteading by Native Hawaiians. This trust is current administered by the Department of Hawaiian Homelands Honolulu PUC: Honolulu Primary Urban Center, census tracts 4.01 thru 72, 75.02, and 75.06. For information on Census Tracts visit: http://factfinder.census.gov/home/saff/main.html? lanq=en HUD: U.S. Department of Housing and Urban Development. HUD's mission is to increase home ownership. support community development, and increase access to affordable housing free from discrimination. To fulfill this mission, HUD will embrace high standards of ethics, management and accountability and forge new partnerships -- particularly with faith-based and community organizations that leverage resources and improve HUD's ability to be effective on the community level. For more information visit: http://www.hud.gov/ HUD Income Guidelines: [See HUD Income Limits] HUD Income Limits: Calculates income as percentage of the HUD median income for a household of a given size in a given geographic area. For information on the HUD median income and HUD income limits visit: http://www.huduser.orq/datasets/il/i106/BRIEFING-MATERIALs.pdf HUD Median Income: The median income for a household of a given size in a specific geographic area. For detailed information on the HUD median income and HUD income limits visit: http://www.huduser.orq/datasets/iI/i106/BRIEFING-MATERIALs.pdf IADLs: Instrumental Activities for Daily Living which include preparing meals, taking medications, making phone calls or managing money. Imputation: A method of replacing missing values for specific variables in survey work. SMS uses a multivariate regression technique to replace missing values with the best estimate of the value for each case, based on reported values of several other related variables. For the Housing Demand Survey, imputation was applied to age and household income. LIncome: Self-reported household income for all sources, for all employed persons in the household, estimated before taxes, for the calendar year preceding the survey (2005). [See also Imputation]. L Hawai'i Housing Planning Study,2016 Page 141 ©SMS,Inc. December,2016 Income as a % of HUD Median: [See HUD Income Limits]. , Income Per Household Member: Household income divided by the number of persons living in the household. ' Intention to Move: The desire to seek a new housing unit at some time in the future. Includes the desire to seek a new ownership units and the desire to seek a new rental unit. j Leasehold: A less than freehold estate by which a tenant possesses real property. In a lease situation, the tenant possesses a leasehold and the landlord possesses the reversion estate; i.e. when the lease terminates, the property will revert to the landlord. Lessee and Applicant: A classification of households used in the Native Hawaiian tabulations and reports referring to a households in which at least one member is a DHHL lessee and at least one is an applicant for a land award from DHHL. Lessee Only: A households occupied by virtue of a Department of Hawaiian Home Lands lease, and having no adult member who is on a DHHL awards applicant list. Military Housing Privatization Initiative: , In order to house active duty military personnel and their families, the Department of Defense (DoD) has traditionally relied on two methods. In locations where the local housing supply was adequate, the DoD provided military members with a stipend, the Basic Allowance for Housing (BAH), to defray the cost of residential housing near military installations. For those locations where local housing was extremely expensive or unavailable, quarters were built within the military installations to house military personnel and their dependents. In 1996, a third option was created through the Military Housing Privatization Initiative (MHPI). Because many of the military family housing properties built during the 1950s and 1960s were old and deteriorating, the DoD partnered with private developers to take on the projects since they had the experience and expertise to do the job faster, cheaper, and better. Under the MHPI, private developers renovate or replace old, substandard military housing and, in some instances, build additional units. The developers then become the owners and managers of those properties and the landlords for the military families in those homes. Most important, military families get updated, repaired or newly constructed homes that will be maintained for the next fifty years. ' The MHPI program has made on-base privatized housing part of the local competitive housing market. Privatized housing operates similarly to any other private rental property business and the resulting competition can impact the local rental market and housing demand. MFD: Multi-Family Dwelling. This includes townhouses, apartments, duplexes, and multiplexes. Multi-Generation Household With Elderly Member: Households with at least two generations present and at least one member 62 years of age or older. Non-Hawaiian: A non-Hawaiian individual is a person that reports no Hawaiian ancestry. O`ahu SF Ads: The number of advertisements for single-family homes in the City & County of Honolulu. Hawaii Housing Planning Study,2016 Page 142 ©SMS,Inc December,2016 I O`ahu SF Rents: The number of advertisements for single-family homes for rent in the City & County of Honolulu. Occupy without Payment: A type of tenancy in which the respondent occupies a housing units without payment of cash rent. Includes persons living in rent-free public units, those living in private sector, family-owned units, property managers occupying units in exchange for services, clerics living ' in church owner units, military dependents in on-base units, etc. Does not include individuals who have paid off their mortgage. ' Other Hawaiian: Other Hawaiian individuals are those who claimed some Hawaiian ethnicity in the survey, but were not 50 percent or more Hawaiian, and therefore were not DHHL beneficiaries. Other Hawaiian households are households that include no individual with more than 50 percent Hawaiian ancestry, and include at least one individual who is less than 50 percent Hawaiian. Other Vacant: This category includes units held for settlement of an estate, units held for occupancy ' by a caretaker or janitor, and units held for personal reasons of the owner. Overcrowded: A household with more than 1.01 persons per room. Permanent Supportive Housing: Housing with indefinite leasing or rental with appropriate services for persons with higher acuity. Persons with Alcohol or Other Drug Addictions: Persons whose impairment or disability is due to alcoholism or drug addiction. ' Persons with Developmental Disability: Persons with a severe, chronic disability that: (1) is attributable to a mental or physical impairment or combination of mental and physical impairments; (2) is manifested before the individual attains age 22; (3) is likely to continue indefinitely; (4) results in substantat functional limitations in three or more of the following areas of major life activity: self- care; receptive and expressive language; learning; mobility; self-direction; capacity for independent living; economic self-sufficiency; and (5) reflects the individual's need for a combination and sequence of special interdisciplinary, or generic services, individualized supports, or other forms of assistance that are of lifelong or extended duration and are individually planned and coordinated. An individual from birth to age nine, inclusive, who has a substantial developmental delay or specific congenital or acquired condition, may be considered to have a developmental disability without meeting three or more of the criteria described above, if the individual, without services and supports, has a high probability of meeting those criteria later in life. Persons with Disabilities: Any person who has a physical or mental impairment that substantially limits one or more major life activities; has a record of such impairment; or is regarded as having such impairment. In general, a physical or mental impairment includes hearing, mobility and visual impairments, chronic alcoholism, chronic mental illness, AIDS, AIDS Related Complex, and mental retardation that substantially limit one or more major life activities. Major life activities include walking, talking, hearing, seeing, breathing, learning, performing manual tasks, and caring for oneself. Persons with HIV/AIDS: A person with the disease of acquired immunodeficiency syndrome or related diseases, or any conditions arising from the etiologic agent for acquired immunodeficiency syndrome, including infection with the human immunodeficiency virus (HIV). Hawaii Housing Planning Study,2016 Page 143 m SMS, Inc. December,2016 Ammoillari I Persons with severe mental illness: Persons with a severe and persistent mental or emotional ' impairment that seriously limits his or her ability to live independently, and which impairment could be improved by more suitable housing conditions. PLANNED HOUSING UNITS: Planned housing units are those that are registered or on record at government agencies as being scheduled for completion by a specified date. The official list of such units usually includes permitted or confirmed units, public and private sector. A major interest in planned units relates to their value in estimating future housing supply, often but not always including its relationship to housing demand. Potential Movers: Households in which the Housing Demand Survey respondent reported an interested in moving to a new unit in the future. Potential Owners: Households in which the Housing Demand Survey respondent reported intent to own their next home. Potential Renters: Households in which the Housing Demand Survey respondent reported intent to rent their next unit. Precariously Housed: [See At Risk for Homelessness] , Preferred Bathrooms: The number of bathrooms desired in a new unit. Preferred Bedrooms: The number of bedrooms desired in a new unit. Seniors: See Elderly ' Shelter to Income Ratio: The percentage of total monthly household income that is used to pay for shelter costs (rent or mortgage payments). In this study, a shelter-to-income ratio in excess of .30 is considered to indicate some level of financial disadvantages. A shelter-to-income ratio in excess of .40 indicates severe financial disadvantage. Short-term Rental: A rental period for a residential unit lasting 30 days or less; also called transient , rentals. Single Family Dwelling (SFD): A single-family detached dwelling unit , Sustainable Housing: Housing that designed to be affordable in perpetuity. Affordability is defined as having a sales or rental price below market values — usually at or below the price affordable to a family with a household income at the median or at specific HUD income qualification levels. Perpetuity is accomplished through limited equity arrangements incorporated in the deed or lease agreement. [See also: Sustainable Lease] ' Sustainable Lease: A housing contract that does not include ownership of the land. The perpetuity is accomplished through a lease agreement. Sustainable lease contracts may be used to eliminate high down payments, can allow property to be passed on to heirs, require no ground rent, and typically have a lease term greater than 60 years. [See also Leasehold and Fee Simple] Tenancy: There are three types of tenancy: own, rent, and occupy without payment ' Townhouse: Side by side housing units that do not meet the definition of single-family dwellings Hawaii Housing Planning Study,2016 Page 144 ©SMS,Inc December,2016 L IUnit Condition: Self-reported assessment of the overall condition of the current unit, rated on a scale from excellent to poor. LUnit Type: There several different types of units reported in the Housing Demand Survey including: single-family detached units, duplexes, multiplexes, townhouses, condominiums, and apartments. I We note that condominium in an ownership regime and not a unit type. Since nearly all condominiums in Hawai'i are multifamily units, this classification allows a distinction between condominium apartments and standard apartments in multi-family buildings. LVictims of Domestic Violence: Victims of felony or misdemeanor crimes of violence committed by a current or former spouse of the victim, by a person with whom the victim shares a child in I common, by a person who is cohabitating with or has cohabitated with the victim as a spouse, by a person similarly situated to a spouse of the victim under the domestic or family violence laws of the jurisdiction receiving grant monies, or by any other person against an adult or youth victim who is protected from that person's acts under the domestic, violence or family violence laws of the Ijurisdiction. I 1 I I I I I I I II I Hawai'i Housing Planning Study,2016 Page 145 ©SMS,Inc. December,2016 immimmir APPENDIX H: HAWAI'l STATE PLANNING ACT (SELECTED SECTIONS) 1 All state agencies, including the Office of Planning, are guided by two statewide planning documents (1) the Hawaii State Planning Act, which is a broad policy document that sets the table for all activities, programs, and decisions made by local and state agencies; and (2) the New Day Comprehensive Plan, which outlines the Administration's priorities. The Hawaii State Planning Act was signed into law in 1978 to "improve the planning process in this state, to increase the effectiveness of government and private actions, to improve coordination among different agencies and levels of government, to provide for wise use of Hawai'i's resources and to ' guide the future development of the state" (HRS § 226-1). The Act is codified under HRS Chapter 226. The Act sets forth the Hawaii state plan, which is a long-range comprehensive plan that includes an overall theme, goals, objectives, policies, priority guidelines, and implementation mechanisms. The Hawai'i state plan: • Serves as a guide for the future long-range development of the state • Identifies the goals, objectives, policies, and priorities for the state • Provides a basis for determining priorities and allocating limited resources, such as public funds, services, human resources, land, energy, water, and other resources • Improves coordination of federal, state, and county plans, policies, programs, projects, and regulatory activities • Establishes a system for plan formulation and program coordination to provide for an integration of all major state, and county activities §226-102 Overall direction. The State shall strive to improve the quality of life for Hawai'i's present and future population through the pursuit of desirable courses of action in five major areas of statewide concern that merit priority attention: economic development, population growth and land resource management, affordable housing, crime and criminal justice, and quality education. [L 1978, c 100, pt of§2; am L 1986, c 276, §29] §226-104 Population growth and land resources priority guidelines. (a) Priority guidelines to effect desired statewide growth and distribution: (5) Explore the possibility of making available urban land, low-interest loans, and housing subsidies to encourage the provision of housing to support selective economic and population growth on the neighbor islands. §226-106 Affordable housing. Priority guidelines for the provision of affordable housing: (1) Seek to use marginal or nonessential agricultural land and public land to meet housing needs of low- and moderate-income and gap-group households. (2) Encourage the use of alternative construction and development methods as a means of reducing production costs. (3) Improve information and analysis relative to land availability and suitability for housing. (4) Create incentives for development which would increase home ownership and rental opportunities for Hawai'i's low- and moderate-income households, gap group households, and residents with special needs. (5) Encourage continued support for government or private housing programs that provide low interest mortgages to Hawai'i's people for the purchase of initial owner- occupied housing. (6) Encourage public and private sector cooperation in the development of rental housing alternatives. 1 Hawaii Housing Planning Study,2016 Page 146 ©SMS. Inc. December,2016 I (7) Encourage improved coordination between various agencies and levels of government to deal with housing policies and regulations. (8) Give higher priority to the provision of quality housing that is affordable for Hawai'i's residents and L less priority to development of housing intended primarily for individuals outside of Hawaii. [L 1986, c 276, §33; am L 1989, c 250, §3] 1 1 1 1 ' Hawaii Housing Planning Study,2016 Page 147 ©SMS, Inc December,2016 APPENDIX I: BIBLIOGRAPHY ' Analysis of Impediments to Fair Housing-State of Hawaii, 2010. Prepared for the Hawai'i Public Housing Authority and Hawaii Housing Finance and Development Corporation, SMS Research & Marketing Services, Inc., September, 2010. Analysis of the Honolulu, Hawaii Housing Market: as of January 1, 2005. U.S. Department of Housing and Urban Development, Policy Development& Research Division, Comprehensive Market Analysis Reports, 2005. Angel, Shlomo, (2000). Housing policy matters: A global analysis. 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