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2006 Housing Policy Study by SMS Research & Marketing Services, Inc.
or///Se Consulting Database Marketing Economic & Social Impact Studies Research Training SMS 1042 Fort Street Mall Suite 200 Honolulu, HI 96813 Ph: (808) 537 -3356 Toll Free (877) 535 -5767 Fax: (808) 537 -2686 E -mail: info @smshawaii.com Website: www.smshawaii.com SMS Affiliations and Associations: Alan Barker Associates Warren Dastrup — Kauai Affiliate Experian International Survey Research Solutions Pacific, LLC 3i Marketing & Communications Beyond Information. Intelligence. HOUSING POLICY STUDY, 2006 Prepared by: SMS Research & Marketing Seri -ices, Inc. February, 2007 or///So Consulting Database Marketing Economic & Social Impact Studies Research SMS 1042 Fort Street Mall Suite 200 Honolulu, HI 96813 Ph: (808) 537 -3356 Toll Free (877) 535 -5767 Fax: (808) 537 -2686 E -mail: info 0-smshawa ii.com Website: www.smshawaii.com SMS Affiliations and Associations: Alan Barker Associates Warren Dastrup — Kauai Affiliate Experian International Survey Research Solutions Pacific, LLC 3i Marketing & Communications Beyond Information. Intelligence. February 28, 2007 Mr. Orlando "Dan" Davidson Executive Director Hawaii Housing Finance & Development Corporation (HHFDC) 677 Queen Street, Suite 300 Honolulu, Hawaii 96813 -5120 Mr. Edwin Taira Housing Administrator Office of Housing and Community Development County of Hawaii 50 Wailuku Drive Hilo, Hawaii 96720 Mr. Kenneth Rainforth Housing Administrator County of Kauai Housing Agency 4444 Rice Street, Suite 330 Lihue, Hawaii 96766 Mr. Clyde Namuo Administrator Office of Hawaiian Affairs 711 Kapiolani Blvd., Ste.500 Honolulu, Hawaii 96813 Dear Directors /Administrators: Mr. Edwin Okubo Housing Administrator Department of Housing and Human Concerns County of Maui 200 South High Street Wailuku, Maui, Hawaii 96793 Ms. Deborah Kim Morikawa Director Department of Community Services City and County of Honolulu 650 South King Street Honolulu, Hawaii 96813 Mr. Micah Kane Director Department of Hawaiian Home Lands 1099 Alakea Street, Suite 2000 Honolulu, Hawaii 96813 It is with pleasure that SMS Research presents this report of the findings of the Hawaii Housing Policy Study Update, 2006. We believe the results will be an important tool to be used by those who will plan for and develop new housing opportunities for Hawaii's people in the remainder of this decade. It has been a pleasure serving 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 ACKNOWLEDGEMENTS Housing Policy Study Update, 2006 This study is in fact the culmination of months of work on the part of many people. It is important to acknowledge the leaders of the effort and their continuing dedication to ensuring that housing planning in Hawaii is based on the hard facts of our housing situation and the needs of Hawaii residents. The people listed below, and the agencies they represent, have demonstrated the kind of wisdom and foresight required to maintain a comprehensive long - range data system for housing planning in Hawaii. In their dedication to the successful resolution of Hawaii housing problems, they have provided the guidance and direction to put the project in motion, the resources to make it possible, and the tireless application of the data to make the system work for the people of Hawaii. ➢ Hawaii Housing Finance & Development Corporation: Dan Davidson, Janice Takahashi ➢ City and County of Honolulu: Gail Kaito ➢ Maui County: Ed Okubo ➢ Hawaii County: Ed Taira, Jeremy McComber ➢ Kauai County: Ken Rainforth, Gary Mackler ➢ Department of Hawaiian Home Lands: Micah Kane, Sandy Asato, Bob Freitas ➢ Office of Hawaiian Affairs: Leatrice Kauahi, Clyde Namuo ➢ Executive Office on Aging: Pat Sasaki, Tammy Tom ➢ U.S. Department of Housing and Urban Development: Mark Chandler ➢ Hawaii Public Housing Authority, Homeless Programs Branch: Sandra Miyoshi ➢ Castle and Cooke: Harry Saunders, Alan Arakawa ➢ Pacific Housing Assistance Corporation: Marvin Awaya Hawaii Housing Policy Study, 2006 © SMS, Inc. Page February, 2007 As in the past, a large number of housing experts in Hawaii have made contributions to the contents of this report. The people listed below have given of their time and expertise to provide ideas and direction, facts and figures, review and reaction throughout the last seven months. Without their time and talent. This project would not have succeeded. We are grateful to each one. ➢ John Summers, Maui County - Planning Department Long Range ➢ Christopher Yuen, Director, Planning Department, County of Hawaii ➢ Steve Young and City and County of Honolulu Department of Planning & Permitting ➢ Kauai Department of Planning ➢ Alvin Au, Military Affairs Liaison, Congressman Neil Abercrombie, Hawaii 1st District ➢ Bradford Davis, C CIV Naval Facilities Engineering Command Pacific Code RESB ➢ Jon Wallenstrom, Chief Operating Officer, Forest City Hawaii; Senior Vice President, Forest City Military Communities ➢ Margaret Braun, Hawaii Military Communities, LLC ➢ Lucien Wong, Actus Lending Lease, LLC ➢ University of Hawaii, Manoa ➢ Hawaii Pacific University ➢ Chaminade University ➢ BYUH ➢ University of Hawaii, Hilo ➢ Maui Community College ➢ Kamehameha Schools ➢ Marvin Awaya, Pacific Housing Assistance Corporation ➢ Rick Prahler, Castle & Cooke Homes, Hawaii ➢ Alan Arakawa, Castle & Cooke Homes, Hawaii ➢ Ann Bouslog, Mikiko Corporation ➢ Bruce Tsuchida, Townscape, Inc. ➢ Ray Soon, Solutions Pacific, LLC ➢ Mike Flores, U.S. Dept. of Housing & Urban Development ➢ Dean Uchida, Land Use Research Foundation of Hawaii ➢ John Kirkpatrick, Belt Collins Hawaii Our Consultant Team included: ➢ Mike Sklarz of Fidelity Hansen Quality ➢ Scott Kimball of Hawaii Information Service Hawaii Housing Policy Study, 2006 © SMS, Inc. Page ii February, 2007 REPORTS IN THE HOUSING POLICY STUDY 2006 SERIES Housing Policy Study, 2006, prepared for the Hawaii Housing Finance and Development Corporation, SMS Research & Marketing Services, Inc., January 2006. Housing Policy Study, 2006: Data Tabulations, prepared for the Hawaii Housing Finance and Development Corporation, SMS Research & Marketing Services, Inc., January 2006. Housing Policy Study, 2006: Technical Report, prepared for the Hawaii Housing Finance and Development Corporation, SMS Research & Marketing Services, Inc., January 2006. Housing Policy Study, 2006: Housing Issues for Senior Citizens, prepared for the Hawaii Executive Office on Aging, SMS Research & Marketing Services, Inc., January 2006. Housing Policy Study, 2006: Housing of Native Hawaiians, prepared for the Hawaii Department of Hawaiian Home Lands and the Office of Hawaiian Affairs, SMS Research & Marketing Services, Inc., January 2006. Housing Policy Study, 2006: The Hidden Homeless and Households at Risk of Homelessness, prepared for the Homeless Programs Branch, Hawaii Public Housing Authority, by SMS Research & Marketing Services, Inc., January 2006. Housing Policy Study, 2006: Housing Production Issues, prepared for the Hawaii Housing Finance and Development Corporation, SMS Research & Marketing Services, Inc., January 2006. Hawaii Housing Policy Study, 2006 Page iii © SMS, Inc. February, 2007 CONTENTS ACKNOWLEDGEMENTS ............................................................................... ..............................I REPORTS IN THE HOUSING POLICY STUDY 2006 SERIES ...................... ............................III SUMMARY: COUNTY OF HAWAII HOUSING CONDITIONS, 2006 ............ ..............................1 FUNDAMENTAL HOUSING DATA ............................................................. ..............................1 CURRENT HOUSING SITUATION FOR HAWAII COUNTY RESIDENTS . ..............................2 HOUSINGDEMAND ................................................................................... ..............................3 HOUSING PREFERENCES ........................................................................ ..............................3 FINANCIAL QUALIFICATIONS ................................................................... ..............................4 MODELING HOUSING FUTURES, DEVELOPING HOUSING POLICY .... ..............................4 ISSUES....................................................................................................... ..............................5 HOUSING IN HAWAII, 2006 .......................................................................... ..............................7 PROJECTSTRUCTURE ............................................................................ ..............................7 POPULATION............................................................................................. ..............................8 HOUSINGSTOCK ...................................................................................... ..............................9 HOUSINGPRICES .................................................................................... .............................12 CURRENT HOUSING SITUATION OF HAWAII RESIDENTS ................... .............................16 HOUSINGDEMAND .................................................................................. .............................19 HOUSING PREFERENCES ....................................................................... .............................20 FINANCIAL QUALIFICATIONS .................................................................. .............................22 MODELING HOUSING FUTURES, DEVELOPING HOUSING POLICY ... .............................23 ISSUE: DISTANCE TRADE -OFF AND TRAFFIC ..................................... .............................34 ISSUE: DISTANCE TRADE -OFF AND TRAFFIC ..................................... .............................34 ISSUE: SUSTAINABLE LEASE ................................................................ .............................35 APPENDIX................................................................................................... ............................... 38 LIST OF TABLES Table 1. Total Population, 1990 -2006 .................................................................. ..............................8 Table 2. Total Housing Units, 1990 - 2006 ............................................................. ..............................9 Table 3. Types of Single Family and Condominium Housing Units in Hawaii Stock, 1990 -2006 ..... 10 Table 4. Home Ownership Rates, 1990 -2006 ................................................... ............................... 11 Table 5. Out -of -State Owners, 2006 ................................................................. ............................... 11 Table 6. Average and Advertised Rents, 2003 and 2006 .................................. ............................... 14 Table 7. Average Monthly Housing Costs by County, 2006 .............................. ............................... 16 Table 8. Shelter -to- Income Ratios by County, 2006 .......................................... ............................... 18 Table 9. Interest in Moving to a New Home by County, 2006 ........................... ............................... 19 Table 10. Effective Demand by County, 2006 ..................................................... .............................20 Table 11. Financial Qualifications by County, 2006 ............................................ .............................22 Table 12. 2006 Prices and Affordability by County, 2006 .................................... .............................25 Table 13. Needed Housing Units by County ....................................................... .............................27 Table 14. Moving to Distant Areas .................................................................... ............................... 34 Table 15. Sustainable Lease Responses ............................................................ .............................36 Table A -1. Characteristics of Housing Units By County, 1990 through 2006 .... ............................... 39 Table A -1 a: Total Housing Units, 1990 -2006 .................................................... ............................... 39 Table A -1 b: Occupied Housing Units, 1990 -2006 ............................................. ............................... 39 Table A -1 c: Owner Occupied Housing Units, 1990- 2006 .................................. ............................... 39 Table A -1 d: Hawaii Home Ownership Rates, 1999 to 2006 .............................. ............................... 40 Table A -2. Characteristics of Housing Units By County, 1992, 1997, 2003 and 2006 ......................40 Table A -3a. Household Income Data By County, 1992, 1997, 2003 and 2006 ... .............................41 Table A -3b. Households at HUD Income Guidelines By County, 1992, 1997, 2003 and 2006 ........42 Table A -4a. Housing Unit Condition, Owned Units, by County, 1992, 1997, 2003 and 2006...........43 Table A -4b. Housing Unit Condition, Rented Units, by County, 1992, 1997, 2003 and 2006...........44 Table A -5a: Housing Cost By County, 1992, 1997, 2003 and 2006 .................... .............................44 Table A5b: Mortgage Payments by Years in Unit By County, 1992, 1997, 2003 and 2006 .............45 Table A -6a. Household Composition and Crowding By County, 1992, 1997, 2003 and 2006 .........45 Table A -6b. Household Composition and Crowding By County, 1992, 1997, 2003 and 2006 .........47 Table A -7a. Shelter -to- Income Ratios, 1992, 1997, 2003 and 2006 ................... .............................48 Table A -7b. Shelter -to- Income Ratios by Years in Unit, 1992, 1997, 2003 and 2006 ......................49 Table A -8a. Intention to Move By County, 1992, 1997, 2003 and 2006 ............ ............................... 50 Table A -8b. Preferred Location for Next Move By County, 1992, 1997, 2003 and 2006 .................. 51 Table A -9. Tenancy Preference of Current Owners & Renters, 1992, 1997, 2003 and 2006........... 52 Table A -10. Preferences of Buyers and Renters Statewide, 1992, 1997, 2003 and 2006 ............... 53 Table A -11. Preferred Number of Bedrooms for Buyers and Renters, 1992, 1997, 2003 and 2006 54 Table A -12. Preferred Location of New Housing Unit, 2006 .............................. ............................... 55 Table A -13. Affordable Housing Cost for New Units, 1992, 1997, 2003 and 2006 ........................... 56 Table B -1. 2006 Housing Demand Characteristics, by County (Honolulu) ........ ............................... 57 Table B -2. 2006 Housing Qualifiers, by County (Maui) ..................................... ............................... 58 Table B -3. 2006 Housing Qualifiers, by County (Hawaii) .................................. ............................... 59 Table B -4. 2006 Housing Qualifiers, by County ( Kauai) ...................................... .............................60 Table B -5. 2006 Housing Qualifiers, by County (State of Hawaii) ..................... ............................... 61 Table C -1. Average Rents for Apartments and Houses, 2006 by Type, Bedroom, and Area........... 62 LIST OF FIGURES Figure 1. Housing Prices and Rents in Hawaii, 1990 to 2006 ............. ............................... Figure 2a. West Hawaii Rents, 1985 -2006 ................................... ............................... Figure 2b. Maui Rents, 1985 -2006 ................................... ............................... Figure 2c. Kauai Rents 1985 -2006 ................................................ ............................... Figure 2d. Oahu Rents, 1985 -2006 ................................................ ............................... Figure 3. Hawaii Households at HUD Guideline Levels, 2006 ............ ............................... Figure 4. Affordability Curve for State of Hawaii, 1980 to 2030 ........... ............................... Figure 5. Demand and Supply for Single Family Homes by HUD levels in Honolulu, 2006 Figure 6. Demand and Supply for Multi - Family Homes by HUD levels in Honolulu, 2006 . Figure 7. Outputs for the State of Hawaii from the 2006 Hawaii Housing Model ................ .......... 12 .......... 15 .......... 15 ..........15 .......... 15 .......... 17 .......... 24 .......... 29 .......... 31 .......... 33 SUMMARY: COUNTY OF HAWAII HOUSING CONDITIONS, 2006 The objectives of the Hawaii Housing Policy Study Update (HPS), 2006 were to update the information gathered in previous studies and to continue the development of the Study as a comprehensive housing planning tool. Findings for the County of Hawaii reported here are based on data from many sources, including but not limited to the five components of HPS 2006: the housing stock inventory, the rental price study; the housing production study; the Housing Demand Survey; and (5) the Hawaii Housing Model. In 2006, the housing model was restructured in response to the needs of data users. Interested users should also consult other reports in the series'. FUNDAMENTAL HOUSING DATA Population: Between 1990 and 2000, The County of Hawaii's population grew at a rate of 2.0 percent per year. In the first three years of the present decade, the county growth rate was 2.1 percent per year. Hawaii County was the only one of Hawaii's counties that had higher growth rates in 2000 -2003 than in the nineties. The population growth rate climbed to 2.7 percent per year between 2003 and 2006 — tied with Kauai for highest in the State over the last three years. Housing Stock: The total number of housing units in Hawaii County in 2006 was about 77,500 units. Since 1990, the average annual growth rate for total units has been higher than the population growth rate. Hawaii housing stock grew by 2.5 percent per year between 1990 and 2000. Between 2000 and 2003, the growth rose to 2.6 percent per year and in the last three years, the growth rate soared to 4.3 percent per year, the highest in the State. Households: The number of households, or occupied housing units2, in Hawaii is a better indicator of housing stock available to Hawaii residents. In 2006, 61,213 of the County's 77,577 housing units were owner occupied. Growth rates were lower for occupied units than for total housing stock and that is a reflection of several recent trends including the increased resort construction, increased out -of -state Real Estate purchases, increased numbers of second homes, and the movement of some units from resident to visitor use. Between 1990 and 2006, the housing stock used by Hawaii County households dropped from 86.0 to 78.9 percent. Home Ownership: Housing stock growth from 1990 to 2006 fueled increasing home ownership rates across the State. The percent of occupied units that were owner occupied rose from 61 percent in 1990 to 67 percent in 2006. The growth rate was slow at first, rising three points between 1900 and 2000, one point between 2000 and 2003, and then another point in the last three years. ' See p. iii. 2 Throughout the analysis and reporting of data for HPS 2006 we have followed the U.S. Census convention of defining households and occupied housing units as identical. The number of occupied housing units, or households, is equal to the total housing stock minus units held for use by non - residents and vacant units. Hawaii Housing Policy Study, 2006 Page 1 © SMS, Inc. February, 2007 Out -of -State Ownership: In the last six years, as West Coast real estate prices passed those in Hawaii, out -of -state demand increased dramatically and helped to push Hawaii home prices to record highs. In 2006, 9.9 percent of Hawaii County's single - family housing units and 16 percent of the condominium units were owned by persons from outside of the State. Housing Prices: The most salient characteristic of Hawaii's housing market in the last three years has been rapidly rising prices. Sales prices and rents are at historic highs. Home resale prices3 fell in Hawaii from 1990 through 1998, and then rose at an increasing rate from 1998 through 2005. In 2006, sales prices continued to rise, but at a slower pace. In the last three years, sales prices in the County of Hawaii for single - family units topped out at over $390,000. Condominium sales followed suit, rising from $185,900 in 2003 to $390,000 in 2006. Average shelter costs for renter households in Hawaii rose by 40 percent between 2003 and 2006. Advertised rents4 went up 20 percent during the same period. Increases in advertised rents began in 2001 and began to slow in 2005. As the percentage of renters paying the higher rents increased, the average shelter cost for all renters rose sharply between 2003 and 20055. The peak of the current run -up in advertised rents was July of 2006. Since that time, advertised rents have been falling. CURRENT HOUSING SITUATION FOR HAWAII COUNTY RESIDENTS Among the County's 61,213 households in 2006, about 68 percent were homeowners and 90 percent of them owned their property fee simple. Eighty -five percent of all households were located in single - family detached dwelling units. Seven percent were renting apartments, and about four percent were living in condominium units, either owned or rented. Most of the rest were in multifamily units. The average monthly mortgage payment was $1,250 a month and the average rent was $1,000 per month. Hawaii County had the lowest shelter costs in the State last year, although the rate of increase over the past three years may have hidden that fact from many residents. With our record low unemployment rates, Hawaii household incomes were up since 2003. The Census Bureau reported Hawaii County's median household income in 2005 at $48,524. Our survey found similar medians. U.S. Department of Housing and Urban Development (HUD) income guidelines express income in terms of the median household income for each County in Hawaii, adjusted for household size. Median incomes for the State of Hawaii in their calculations rose from $46,086 to $53,571 between 2003 and 2006. New unit sales prices are unavailable. They are expected to be higher than for resale prices, and to vary according to the same patterns as resale prices. Rent data are taken from two sources. The Housing Demand Survey measured monthly rent for all renter households. The Rent Study measured average monthly advertised rents. That is, rents paid by all renter households lagged advertised rents. Hawaii Housing Policy Study, 2006 Page 2 © SMS, Inc. February, 2007 But how are Hawaii County households doing relative to soaring housing costs and general inflation? In 2006, just over 43 percent of Hawaii households had shelter -to- income ratios less than .30. That means 57 percent were paying more than 30 percent of their incomes for shelter each month. Twenty -six percent (26 %) were paying more than 40 percent of their income for shelter. Shelter -to- income ratios dropped steadily between 1992 and 2003. The depressed housing market of the nineties held prices and rents in check while the burgeoning economy of the late nineties raised household incomes. But between 2003 and 2006, rapidly rising housing costs pushed the shelter -to- income ratio back to its 1997 level. Other conditions in Hawaii households haven't changed much as a result of higher housing prices. About the same number of people (82 %) rated the condition of their units as excellent or satisfactory. Crowding, which fell steadily over the last 15 years, dropped from 19 percent in 1992 to 6.6 percent in 2006. Doubling up had also dropped between 1992 and 2003, but rose again to 37 percent in 2006. HOUSING DEMAND The Housing Demand Survey measures demand as interest in moving to a new housing unit, whether to buy or to rent. In 2006, nearly 42 percent of all Hawaii County households expressed a desire to move to a new home in the near future. The rest said they had no intention of moving in the foreseeable future. About 13 percent of those who intended to move wanted to move to a home outside of Hawaii. If we subtract those households from the total who want to move, the resulting measure of "effective demand" indicates pressure on the housing market over the next several years. Effective demand was equal to 37 percent in 2006. It fell from 40 percent in 1992 to 35 percent in 1997 and held at 35 percent in 2003. In 2006, it rose slightly to 37 percent. Nearly 32 percent of those who expect to move out of Hawaii mentioned housing prices as their main reason for leaving. That's up from 10 percent in 1997 and 20 percent in 2003. HOUSING PREFERENCES Preferences for new housing unit characteristics have changed little over the past 15 years. Among households that want to move, 71 percent want to own their next unit. But in 2006, about 8 percent of those who want to buy were not sure they could afford it and may continue renting. That would drop purchase incidence to about 65 percent, less than the current homeowner rate. Buyer Preferences: Most potential buyers (92 %) wanted single - family homes purchased in fee. Less than half (40 %) would accept a condominium unit if they could not find a single - family unit in their price range. About 42 percent said they could start with one - bedroom units and 48 percent said they needed at least two. The preferred number of bedrooms was lower than in the past. Perhaps buyers are more willing to settle for smaller units in the face of high prices. The same was true for bathrooms. More than 93 percent of buyers said they would need one or two bathrooms. Thirty -nine percent said they needed 1,500 square feet or more of floor space. Thirty -six percent said they could accept units smaller than 1,200 square feet. Hawaii Housing Policy Study, 2006 Page 3 © SMS, Inc. February, 2007 Renter Preferences: Among those who wanted to rent, 59 percent wanted single - family homes. About 33 percent preferred an apartment or condo. The 2006 renters, too, were more willing to accept smaller units than in the past. Nearly all potential renters needed fewer than three bedrooms and 80 percent said they could accept one - and -a -half baths. Thirteen percent of potential renters said they needed 1,500 or more square feet of space and 31% said they could get along with less than 1,000 square feet of space. FINANCIAL QUALIFICATIONS Several indicators of financial qualifications of Hawaii households are assembled in each iteration of the Hawaii Housing Policy Study. In 2006, we found that 59 percent of potential buyers own their homes and 61 percent have owned the unit for more than three years. This suggests that perhaps 36 percent of would -be buyers will have sufficient equity to buy another home. About 55 percent of them have at least $5,000 in savings or investments. But only 39 percent said they could gather $60,000 as a down payment. Among potential buyers, 38 percent had household incomes in excess of 140 percent of the County median. Seventeen percent of them felt their current indebtedness would cause problems with mortgage financing. Monthly mortgage payments may be easier to manage. About 43 percent of potential buyers said they could afford to pay $2,000 or more each month. Among current homeowners, 39 percent were already paying more than $1,700 a month. Among renters who wanted to buy, however, only 17 percent were paying more than $1,700 a month for shelter. MODELING HOUSING FUTURES, DEVELOPING HOUSING POLICY The new Hawaii Housing Model was developed to estimate long -range changes in affordability, price, supply, and demand for housing units in Hawaii. It is driven by affordability, the ratio the affordable housing price to the median home price in Hawaii. Some of the first -cut results from the model as presented below. Market Behavior: In 2006, affordability is lower than it has been for 25 years. The forecast predicts housing prices will be relatively flat for about 6 to 7 years, at which time they will start to increase at a modest rate. That assumes a fairly aggressive rate of increase in household income increase of 4.6 percent a year. Housing prices in Hawaii are unaffordable for households at all income levels and it may be many years before housing is affordable again. Past market performance after a price run -up shows that home prices remain stable for a while and decrease slowly thereafter. Household income rises at a fairly stable rate. After a short run -up, housing costs and affordable prices reach parity after a few years. The current run -up is the largest in history. The price /income adjustment needed to reach parity will take longer to achieve. Needed Units: The Housing Model includes a procedure for developing estimates of "needed units" based on the number of potential households that currently cannot obtain a housing unit in the current market. There is currently a need for 3,450 housing units in Hawaii County. This is up about 10 percent from 2003, the last time the Hawaii Housing Study was conducted. Hawaii Housing Policy Study, 2006 Page 4 © SMS, Inc. February, 2007 In 2006, for the first time, it is possible to analyze housing need separately for single family and multi - family units. For families who want to own single family units, about 55 percent will not be able to locate an affordable unit in the 2006 housing market. Units affordable to households below 80 percent of the county median are in very low supply and the price adjustment period may be particularly stressful for these low- income households. For those who want multi - family units, the situation is more favorable. Families with incomes below 50 percent of the median for their county, and those with incomes above 120 percent of median, will have difficulty finding and affordable unit. For those with incomes between 50 and 120 percent of the median for their counties, affordable units seem to be in ample supply. As the affordability curve approaches parity (where a household with median income can afford a median - priced housing unit), the middle- income groups will have real opportunities to become homeowners in Hawaii. The situation remains unchanged for families with household incomes below 50 percent of the median income. These low- income households will not be able to find affordable single - family housing units. ISSUES HPS 2006 data are rich and comprehensive. They can be applied to a broad range of housing issues and policy alternatives. Some issues that have been addressed at this point are briefly summarized below. Trading Off Distance and Traffic of Affordability: Some of the best locations for developing housing units at affordable prices are distant from population and job centers. For buyers this describes a trade -off between affordable and increased commute time. For planners the trade- off is that between producing housing for Hawaii's people and strain on infrastructure, especially on traffic congestion. Most movers (64 %) want to buy new homes in the same area in which they currently live and work. Of those, about 22 percent would be willing to consider a more distant locations if they can find a home at an affordable price. And of those, 56 percent would give up their jobs and look for a new job. Unlike the rest of the islands, this means that these new residents would result in a small net decrease in long -range commute traffic. Traffic tradeoff is illustrative of similar development issues. Developing large numbers of units at some distance from job centers, without creating jobs there, causes serious strain on infrastructure. Sustainable Lease: A sustainable lease is a leasehold arrangement that maintains property in an affordable price range. They are of interest in Hawaii because: (a) they allow government to maintain affordable housing developments as affordable over long periods of time; (b) sustainable leases on government land can reduce development costs and produce affordable units for median income households; and (c) they are generally more acceptable to prospective buyers than conventional leases. Any sustainable property arrangement requires limitations on ownership and resale. The property must be owner occupied, must be sold back to the sponsoring agency, and there is a ceiling on the resale price. Other aspects of the ownership agreement usually offset these features. Hawaii Housing Policy Study, 2006 Page 5 © SMS, Inc. February, 2007 Study results showed that there is a role for sustainable leases in developing affordable housing for Hawaii. Once they understand how a sustainable lease works, between 24 and 51 percent of people will be willing to take advantage of a sustainable lease to get into their own homes. More important, sustainable leases appealed to buyers who most need them. Sustainable leases appealed to renters, potential buyers who had no down payment, and those with debt. They appealed to crowded households, to those with shelter -to- income ratios between 30 and 40 percent, and to prospective home buyers with incomes between 80 and 140 percent of median income. Finally, the sustainable lease was attractive to households that included "hidden homeless" persons. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 6 February, 2007 HOUSING IN HAWAII, 2006 The objectives of the Hawaii Housing Policy Study Update (HPS), 2006 were to update the information gathered in previous studies and to continue the development of the Study as a comprehensive housing planning tool. In past Housing Policy Studies, the results have slowly evolved toward the latter goal. In 2006, the Study was expanded to include an analysis of housing production data over the last five years. Two other changes were implemented in 2006. First, the Study's time schedule was changed to include major updates every three years with interim updates on an annual basis. Second, the housing model was radically restructured in response to the needs of housing analysts in Hawaii. The new housing model is more comprehensive and fitted with additional front -end programming to make it usable by a much broader group of housing analysts and planners. PROJECT STRUCTURE The Housing Policy Study, 2006 has five parts: A Housing Stock Inventory: An inventory of all housing units in the State at the end of 2004. In 2006, the inventory was used to develop a long -range model of housing production to serve as input to the housing model. 2. Rental Housing Study: A study of rental unit advertisements, prices, and characteristics from January 2003 through November 2006. The rent study was also institutionalized to produce trackable data into the future. 3. Production Data: A review of County data on scheduled housing unit production and a set of interviews with housing producers to develop more reliable estimates of short -run housing production and better understand the issues related to housing development. 4. Demand Survey: A statewide survey of adults in 4,995 households to measure current housing conditions, and expectations to move to a new unit, new unit preferences, financial qualifications for purchase or rent, and demographic characteristics of household members. 5. Housing Model: A model of Hawaii housing conditions, prices, and sales, that permits forecasting of housing unit needs by income group through the year 2030. Each of these project elements is described in greater detail in the Technical Report for HPS 2006 and in several companion documents in the series6. 6 See list of reports on p. iii. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 7 February, 2007 POPULATION The need for housing in Hawaii begins with increases in population. As population grows, due to natural increase and net in- migration, new households are formed. New units are required to house the new households. Between 1980 and 1990, Hawaii's population grew from 964,660 to 1,113,491 for an average annual increase of about 1.4 percent per year. Table 1 shows population increases since 1990. Table 1. Total Population, 1990 -2006 Sources: 1990 Census, 2000 Census, American Community Survey, 2003, 2004, 2005; 2006 is an SMS estimate. a. average annual increase for the period noted. During the nineties, Hawaii's population growth rate was notably lower than in the previous decade. The average annual rate of growth dropped from 1.4 to 0.8 percent. In the first six years of the present decade, population growth has been spurred, principally by net in- migration, to about one percent per year. Population growth patterns were different for each county. The City and County of Honolulu's population growth was less than half a percent per year in the last decade. It grew to about 0.6 percent per year between 2000 and 2003, and then settled back to about 0.4 percent in the last three years. In Maui County the growth rate was very high during the nineties and through to 2003. Growth rates of nearly 2.4 percent per year fell sharply to 1.6 percent between 2003 and 2006. In Hawaii and Kauai Counties, growth rates have been rising steadily during the last 16 years, culminating in a growth of 2.7 percent per year between 2003 and 2006. Hawaii Housing Policy Study, 2006 Page 8 © SMS, Inc. February, 2007 State of Hawaii County of Honolulu County of Hawaii County of Maui County of Kauai 1990 1,113,491 836,231 120,317 100,504 51,177 1992 1,158,613 863,959 131,630 108,585 54,439 1997 1,211,640 886,711 144,445 122,772 57,712 1999 1,210,300 878,906 146,970 126,160 58,264 2000 1,212,125 875,377 148,677 128,241 58,463 2003 1,248,200 890,818 158,896 137,586 60,900 2004 1,262,124 893,614 166,035 140,644 61,831 2005 1,275,194 899,296 169,356 142,574 63,968 2006 1,287,022 903,028 172,949 144,775 66,271 Percent change 1990 -2000a 0.8% 0.4% 2.0% 2.4% 1.3% Percent change 2000 -2003a 0.9% 0.6% 2.1% 2.3% 1.3% Percent change 2003 -2006a 1.1% 0.4% 2.7% 1.6% 2.7% Sources: 1990 Census, 2000 Census, American Community Survey, 2003, 2004, 2005; 2006 is an SMS estimate. a. average annual increase for the period noted. During the nineties, Hawaii's population growth rate was notably lower than in the previous decade. The average annual rate of growth dropped from 1.4 to 0.8 percent. In the first six years of the present decade, population growth has been spurred, principally by net in- migration, to about one percent per year. Population growth patterns were different for each county. The City and County of Honolulu's population growth was less than half a percent per year in the last decade. It grew to about 0.6 percent per year between 2000 and 2003, and then settled back to about 0.4 percent in the last three years. In Maui County the growth rate was very high during the nineties and through to 2003. Growth rates of nearly 2.4 percent per year fell sharply to 1.6 percent between 2003 and 2006. In Hawaii and Kauai Counties, growth rates have been rising steadily during the last 16 years, culminating in a growth of 2.7 percent per year between 2003 and 2006. Hawaii Housing Policy Study, 2006 Page 8 © SMS, Inc. February, 2007 HOUSING STOCK Another major factor in estimating housing need is the housing stock itself. If the rate of housing unit production keeps pace with population increase, then housing availability will be sufficient to handle the need generated by new households. According to U.S. Census estimates, Hawaii's housing stock grew from about 322,845 units in 2003 to 332,196 units in 2006. That amounts to an average annual growth rate of about 1.6 percent per year, about a half a percent higher than the population growth rate during the same period. Table 2. Total Housing Units, 1990 -2006 Sources: 1990 Census, 2000 Census, American Community Survey, 2003, 2004, 2005; 2006 is an SMS estimate. a. Average annual increase for the period noted. During the previous decade, the housing stock grew by the same rate (1.6 %), or about double the population growth rate. It slowed to 1.2 percent per year between 2000 and 2003, closer to the population growth rate during the same period. The situation in the last three years saw both rates increase, with stock growth staying ahead of population growth 1.6 percent to 1.1 percent. Another important piece of the story is conditions at the beginning of the period under study. The Housing Policy Study 1992 described a housing market in Hawaii with very high pent -up demand. The very rapid population growth in the eighties, combined with production patterns that favored high -end units followed by rapidly declining economic conditions, caused major decreases in supply. Crowding' and doubling up were at record high levels, survey indictors of pent -up demand were all high, and affordable units were in low supply. The same factors worked toward lower population growth during the nineties. Birth rates fell, and people left the State to find better economic conditions and lower priced housing. Housing production, while slow, favored affordable units. And as the economy improved between 1997 and 2000, housing production rose to meet new demand, now reinforced by out -of -state buyers. Crowding was measured according to the US Census definition, "more than 1.01 persons per room ". Doubling up was measured as the number of households with more than one family per household. Hawaii Housing Policy Study, 2006 Page 9 © SMS, Inc. February, 2007 State of Hawaii County Of Honolulu County of Hawaii County of Maui County of Kauai 1990 389,810 281,683 48,253 42,261 17,613 1992 411,494 290,571 49,394 51,578 19,951 1997 449,385 311,398 59,098 54,321 24,568 1999 456,091 314,448 61,108 55,475 25,060 2000 460,542 315,988 62,674 56,549 25,331 2003 477,333 322,845 67,878 59,788 26,822 2004 484,936 325,888 70,927 60,888 27,233 2005 491,671 329,300 71,984 62,178 28,209 2006 501,956 332,196 77,577 63,364 28,819 Percent change 1990 -2000a 1.6% 1.1% 2.5% 2.8% 3.5% Percent change 2000 -2003a 1.2% 0.7% 2.6% 1.8% 1.8% Percent change 2003 -2006a 1.6% 0.9% 4.3% 1.9% 2.3% Sources: 1990 Census, 2000 Census, American Community Survey, 2003, 2004, 2005; 2006 is an SMS estimate. a. Average annual increase for the period noted. During the previous decade, the housing stock grew by the same rate (1.6 %), or about double the population growth rate. It slowed to 1.2 percent per year between 2000 and 2003, closer to the population growth rate during the same period. The situation in the last three years saw both rates increase, with stock growth staying ahead of population growth 1.6 percent to 1.1 percent. Another important piece of the story is conditions at the beginning of the period under study. The Housing Policy Study 1992 described a housing market in Hawaii with very high pent -up demand. The very rapid population growth in the eighties, combined with production patterns that favored high -end units followed by rapidly declining economic conditions, caused major decreases in supply. Crowding' and doubling up were at record high levels, survey indictors of pent -up demand were all high, and affordable units were in low supply. The same factors worked toward lower population growth during the nineties. Birth rates fell, and people left the State to find better economic conditions and lower priced housing. Housing production, while slow, favored affordable units. And as the economy improved between 1997 and 2000, housing production rose to meet new demand, now reinforced by out -of -state buyers. Crowding was measured according to the US Census definition, "more than 1.01 persons per room ". Doubling up was measured as the number of households with more than one family per household. Hawaii Housing Policy Study, 2006 Page 9 © SMS, Inc. February, 2007 Conditions favored an increase in the ratio of housing stock growth to population growth. That meant that pent -up demand decreased steadily between 1992 and 2006. Both the 2003 and 2006 Housing Policy Study Updates showed that to be the case. Components of Housing Stock Growth Recent housing stock growth was led by significant increases in the number of single - family homes in all four counties. Statewide, the number of single - family homes went up by 2.5 percent per year between 2003 and 2006. The increase for condominium units was only 1.8 percent per year$. Table 3. Types of Single Family and Condominium Housing Units in Hawaii Stock, 1990 -2006 Source: Hawaii Tax Map Key records, special tabulations by Hawaii Information Services: SFD & Condo units only. Pct. Chg. = average annual percent increase between 2003 and 2006. In Kauai and Honolulu Counties, the growth rates for single family and condominium units were similar at 2.0 percent and less than 1.0 percent respectively. Hawaii and Maui Counties experienced greater growth rates for single - family units, in the neighborhood of 3.5 percent per year. The County of Hawaii growth rate for condominium units was a surprising 6.9 percent per year between 2003 and 2006. 8 The growth rates for apartments, military housing units, dormitories, and cooperative apartment units were also high between 2003 and 2006. The method of measuring these units in the housing inventory changed somewhat between 2003 and 2006, making their comparison difficult to interpret. We look forward to tracking them effectively in the future. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 10 February, 2007 Difference 2003 2006 Units Pct. Chg. City & County of Honolulu 311,466 329,534 18,068 1.8% Single family homes 150,957 160,686 9,729 2.0% Condominium units 91,913 94,640 2,727 0.9% County of Maui 58,358 65,484 7,126 3.7% Single family homes 34,853 38,993 4,140 3.6% Condominium units 19,592 20,388 796 1.3% County of Hawaii 55,014 62,250 7,236 1.3% Single family homes 47,302 52,703 5,401 3.5% Condominium Units 7,712 9,547 1,835 7.1% County of Kauai 24,907 26,871 1,964 2.4% Single family homes 18,301 19,494 1,193 2.0% Condominium units 5,653 5,818 165 0.9% State of Hawaii 453,697 490,711 37,014 2.5% Single family homes 251,413 271,906 20,493 2.5% Condominium units 124,870 130,400 5,530 1.4% Source: Hawaii Tax Map Key records, special tabulations by Hawaii Information Services: SFD & Condo units only. Pct. Chg. = average annual percent increase between 2003 and 2006. In Kauai and Honolulu Counties, the growth rates for single family and condominium units were similar at 2.0 percent and less than 1.0 percent respectively. Hawaii and Maui Counties experienced greater growth rates for single - family units, in the neighborhood of 3.5 percent per year. The County of Hawaii growth rate for condominium units was a surprising 6.9 percent per year between 2003 and 2006. 8 The growth rates for apartments, military housing units, dormitories, and cooperative apartment units were also high between 2003 and 2006. The method of measuring these units in the housing inventory changed somewhat between 2003 and 2006, making their comparison difficult to interpret. We look forward to tracking them effectively in the future. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 10 February, 2007 Home Ownership The growth in housing stock between 1990 and 2006 was accompanied by a steady increase in homeownership rates across the State. As shown in Table 4, the percent of occupied units that were owner occupied rose from 54 percent in 1990 to nearly 61 percent in 2006. The growth rate was slow at first, rising two points between 1990 and 2000, one point between 2000 and 2003, and then three points in the last three years. Table 4. Home Ownership Rates, 1990 -2006 Source: 1990 and 2000, U.S. Census; Honolulu 2003, 2004, American Community Survey; Honolulu, Hawaii, Maui Counties from American Community Survey, 2005; all other estimated by SMS. Homeownership rates for the City and County of Honolulu have traditionally been somewhat lower than for the other three counties. And while homeownership is higher today on all islands, Honolulu's rate is still the lowest in the State. The surprising finding was that Maui's homeownership rate was stable during the nineties. Even with a growth spurt in the last three years, homeownership is closer to Honolulu's rate than to those of Hawaii and Kauai Counties. Out of State Ownership Out -of -state demand for Hawaii housing units has been a substantial feature of the housing market for many years. In the last six years, as major West Coast real estate prices surpassed those in Hawaii, out -of -state demand increased dramatically and helped to push Hawaii home prices to record highs. Table 5 presents figures for all four counties in 2006. Table 5. Out -of -State Owners, 2006 State of Hawaii County of Honolulu County of Hawaii County of Maui County of Kauai 1990 53.9 52.6 61.1 57.5 58.6 1992 54.5 52.7 61.4 57.4 59.7 1997 56.1 54.2 63.8 57.4 61.2 1999 56.4 54.5 64.2 57.4 61.3 2000 56.5 54.6 64.5 57.4 61.4 2003 57.2 54.9 66.1 58.3 62.0 2004 59.0 57.2 66.9 58.5 62.9 2005 59.4 57.6 67.2 58.6 64.0 2006 1 60.7 58.9 1 67.2 1 61.4 1 65.2 Source: 1990 and 2000, U.S. Census; Honolulu 2003, 2004, American Community Survey; Honolulu, Hawaii, Maui Counties from American Community Survey, 2005; all other estimated by SMS. Homeownership rates for the City and County of Honolulu have traditionally been somewhat lower than for the other three counties. And while homeownership is higher today on all islands, Honolulu's rate is still the lowest in the State. The surprising finding was that Maui's homeownership rate was stable during the nineties. Even with a growth spurt in the last three years, homeownership is closer to Honolulu's rate than to those of Hawaii and Kauai Counties. Out of State Ownership Out -of -state demand for Hawaii housing units has been a substantial feature of the housing market for many years. In the last six years, as major West Coast real estate prices surpassed those in Hawaii, out -of -state demand increased dramatically and helped to push Hawaii home prices to record highs. Table 5 presents figures for all four counties in 2006. Table 5. Out -of -State Owners, 2006 Out -of -State owners calculated as percent of all units for which the tax bill is mailed to an out -of -state address. Source: Hawaii Tax Map Key records, tabulated by Hawaii Information Services for SMS. Hawaii Housing Policy Study, 2006 Page 11 © SMS, Inc. February, 2007 State of Hawaii County of Honolulu County of Hawaii County of Maui County of Kauai Single family homes 6.2 3.6 9.9 9.5 11.0 Condominium units 12.7 7.8 16.0 26.7 20.3 Out -of -State owners calculated as percent of all units for which the tax bill is mailed to an out -of -state address. Source: Hawaii Tax Map Key records, tabulated by Hawaii Information Services for SMS. Hawaii Housing Policy Study, 2006 Page 11 © SMS, Inc. February, 2007 Overall, persons from outside of the State own 6.2 percent of Hawaii single - family housing units and 13 percent of our condominium units. In all but the City and County of Honolulu, the out -of- state figure for single - family units is about 10 percent. For Maui and Kauai counties, the percent of out -of -state condominium ownership is more than 20 percent. HOUSING PRICES Most Hawaii housing observers are aware that housing prices, whether sale or rents, have been rising sharply over the last three years. Housing prices are at historical highs. Availability was low in 2003 and for many months in 2004. By 2005 -2006, for -sale units began to appear on the market in larger numbers, but rentals continued to be in short supply. By 2006, rental units were available in numbers similar to 2002 -2003. Before we turn to the details of housing prices for all the islands, it will be useful to look at the impact of housing prices over the long haul. Figure 1 presents representative9 data for housing prices and rents in current dollars and in 1982 -84 dollars adjusted for inflation. The rent data are average monthly advertised rents for 2- bedroom single - family homes on Oahu. The home sales data are average annual sales prices for 2- bedroom homes on Oahu. Figure 1. Housing Prices and Rents in Hawaii, 1990 to 2006 Source: SMS Rental data. MLS sales data. 9 Some data are available for other islands and for other unit types, but the series are of differing lengths and for differing unit types. No reliable data are available for the State as a whole for such a long series. Most available data suggest that the behavior of these series — as distinct from the actual rent or sale amounts — are roughly the same for all counties. Hawaii Housing Policy Study, 2006 Page 12 © SMS, Inc. February, 2007 $3,000 $700,000 $2,500 $600,000 c $500,000 L 21 $2,000- CL t $400,000 E $1,500 N $300,000 a� d $1,000 � d >M o O a O 0 O O a $200,000 $500 $100,000 $0 $0 g` �4` 0`� �C§l rent adj. rent sales adj. sales Source: SMS Rental data. MLS sales data. 9 Some data are available for other islands and for other unit types, but the series are of differing lengths and for differing unit types. No reliable data are available for the State as a whole for such a long series. Most available data suggest that the behavior of these series — as distinct from the actual rent or sale amounts — are roughly the same for all counties. Hawaii Housing Policy Study, 2006 Page 12 © SMS, Inc. February, 2007 Two sharp price run -ups, one in the late eighties, and a more recent one between 1999 and 2006 dominates the picture. The rent data show an earlier run -up between 1982 and 1985. Since we are near or at the end of the current run -up, our attention is drawn to "what happens next ". The recovery after the early 80s run -up was short, only two or three years. It ended when interest rates began to drop in 1987. The nineties recovery took nearly a decade and seems to have occurred in two steps — a no- growth period between 1991 and 1996, followed by a notable drop in prices that ended in 1999. The current dollar data show that housing prices stayed relatively stable, and even increased a bit about 1994 and 1995. The inflation- adjusted data, on the other hand, show a relatively constant decline in housing values and rents that began to turn around by the end of the decade. This suggests a true "adjustment" in economic terms, in which housing values dropped from their run -up peak but did not fall below their pre - run-up levels. The next run -up drives housing value well above values at the previous peak. We might expect a similar adjustment following the current run -up. Finally, we note that in purely graphic terms, rents seem to lead housing sales prices. That makes recent trends very interesting. Oahu average monthly advertised rents actually began to fall in 2005 and have continued to fall throughout 2006. This and other factors noted throughout this report suggest that the recent increase in Hawaii housing costs may be at an end. Sales Prices Sales prices for housing units across the State rose rapidly in the last three years. Sales prices for single - family units topped out at over $610,000 in late 2006. Condominium sales followed suit, rising from $195,000 in 2003 to $330,000 in late 2006. News stories in the last quarter of 2006 noted that prices had leveled off, and sales volumes had begun to drop. Rents Rental price data in Housing Policy Studies come from two different sources. The Housing Demand Survey measures average monthly rent for all renters in current dollars. The rental price study measures average monthly advertised rent, the price renters will have to pay as they move to new units. Table 6 identifies the difference between the two. Hawaii Housing Policy Study, 2006 Page 13 © SMS, Inc. February, 2007 Table 6. Average and Advertised Rents, 2003 and 2006 Source: Rent Study, review of rental advertisements on all islands, monthly from January 2003 through November 2006. Across all categories, rents rose by about 40 percent between 2003 and 2006. Advertised rents rose by about 20 percent during the same period. Major increases in advertised rents began in 2001 and began to slow in 2005. As the percentage of renters paying the higher rents increased, the average rent for all renters rose more sharply between 2003 and 2005. That is, overall rents lag advertised rents. In all four counties, advertised rents showed the same pattern between 1985 and 200610. Rents rose through the last half of the eighties, fell sharply in the early nineties and remained at relatively low levels until 1999. In the present decade rents have risen at a faster rate than in the past culminating in historic highs by 2005. 10 Rents for Maui and Kauai Counties show an uncharacteristic rise for the period between 2000 and 2002. This may be the result of slightly different data collection methods used for that period. Sample sizes were much lower than in other years, allowing for greater error variance in the estimates. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 14 February, 2007 Average Monthly rents Apartments Single Family Units County Studio 2- Bedroom 2- Bedroom 3 &4 Bedroom All Ad All Ad All Ad All Ad Households Rents Households Rents Households Rents Households Rents Honolulu 2003 $680 $728 $866 $1,446 $1,002 $1,013 $1,136 $1,559 2006 $807 $960 $1,362 $1,798 $1,374 $1,603 $1,819 $2,467 Maui 2003 $584 $1,032 $825 $1,338 $1,016 $1,347 $1,136 $1,926 2006 $809 $984 $1,123 $1,498 $1,227 $1,508 $1,661 $2,254 Hawaii 2003 $615 $693 $745 $1,072 $754 $1,318 $930 $1,560 2006 $588 $855 $1,028 $1,408 $1,097 $1,303 $1,424 $1,504 Kauai 2003 $509 $747 $1,023 $1,249 $796 $1,367 $1,055 $1,712 2006 $925 $929 $1,061 $1,469 $1,344 $1,600 $1,516 $2,017 STATE 2003 $631 $872 $858 $1,373 $969 $1,287 $1,096 $1,841 2006 $794 $929 $1,310 $1,693 $1,312 $1,597 $1,690 $2,287 Source: Rent Study, review of rental advertisements on all islands, monthly from January 2003 through November 2006. Across all categories, rents rose by about 40 percent between 2003 and 2006. Advertised rents rose by about 20 percent during the same period. Major increases in advertised rents began in 2001 and began to slow in 2005. As the percentage of renters paying the higher rents increased, the average rent for all renters rose more sharply between 2003 and 2005. That is, overall rents lag advertised rents. In all four counties, advertised rents showed the same pattern between 1985 and 200610. Rents rose through the last half of the eighties, fell sharply in the early nineties and remained at relatively low levels until 1999. In the present decade rents have risen at a faster rate than in the past culminating in historic highs by 2005. 10 Rents for Maui and Kauai Counties show an uncharacteristic rise for the period between 2000 and 2002. This may be the result of slightly different data collection methods used for that period. Sample sizes were much lower than in other years, allowing for greater error variance in the estimates. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 14 February, 2007 Figure 2a. West Hawaii Rents, 1985 -2006 Figure 2b. Maui Rents, 1985 -2006 $2500 $2-5DO $2000 $2-COO $1,500 $1,5Jo $1,000 $1,CUo $"o $5Do �1 &2BdmApatrert — 3 &4BckmSirgleFarrily 1 &2BJ AM rert — 3 &4BckmSinjeFarrily Figure 2c. Kauai Rents 1985 -2006 Figure 2d. Oahu Rents, 1985 -2006 $2500 W1O $amo $2000 0 $1,500 $20J0 $1,000 $1,5D0 $1,ODO $5D0 $NCO $0 $0 - �1 &2BdmAptmt — 3 &4BdmSirjeFarrily 394BdmSrjeFarnly 2BdmApatmt In all counties, the rate of increase slows between 2005 and 2006. Quarterly data for all but Hawaii County show significant decreases in average advertised monthly rents. The peak of the current run -up in advertised rents was about July of 2006. Since that time, advertised rents have been dropping. Continued increases for the County of Hawaii are led by high rents in West Hawaii. East Hawaii rents have leveled off. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 15 February. 2007 CURRENT HOUSING SITUATION OF HAWAII RESIDENTS Among Hawaii's 435,818 households in 2006, about 60 percent were homeowners. Even on Oahu home ownership rose to 58 percent. It was as high as 68 percent in Hawaii County, 65 percent on Kauai, and 60 percent in Maui County. Among homeowners, ownership in fee was higher than in the past, reaching 93 percent for the State as a whole, and differing only slightly across counties" About 65 percent of all households were living in single - family detached dwelling units. Seventeen percent were renting apartments, and about ten percent were living in condominium units, either owned or rented. Most of the rest were in multi - family units including townhouses, duplexes, and other multiplex units. On Oahu, about 58 percent of households were living in single - family units and more were in all of the other unit types. The Counties of Hawaii and Kauai found around 85 percent of the households in single - family units with fewer families housed in other types of units, especially condominium units. Only about 3.5 percent of their households are in condos, compared with 11.5 percent on Oahu. Maui County's housing pattern is roughly between Oahu and the other two counties, with 75 percent in single - family units and nine percent in condos. We have already noted the rapidly rising cost of housing on all counties since 2003. At present, the average homeowner in Hawaii has a monthly mortgage payment of about $1,553 a month and the average renter is paying nearly $1,100 per month in rent. Maui County housing costs, both rent and mortgage payments, were the highest in the state according to survey data. That finding was corroborated by the rent study as well (see Table 6 and Figures 2a through 2d). Table 7. Average Monthly Housing Costs by County, 2006 Monthly housing costs rounded to the nearest $10. See Table Al for details. With nearly two years of the lowest unemployment rates in the nation, Hawaii household incomes increased between 2003 and 2006. In part, our higher incomes are due to much larger household sizes with several earners per household. For this reason, housing analysts seek a measure of economic well -being that takes household size into account. Housing Policy Studies since 1992 have used the income guidelines set forth by the U.S. Department of Housing and Urban Development (HUD) for that purpose. HUD guidelines express income in terms of the median household income for each of Hawaii's four Counties. Figure 3 shows the distribution of Hawaii households according to HUD guidelines in 2006. 11 For details on finding reported in this section, see Table Al in the appendix. Hawaii Housing Policy Study, 2006 Page 16 © SMS, Inc. February, 2007 State of County County County County Hawaii of Honolulu of Hawaii of Maui of Kauai Average monthly mortgage payment $ 1,550 $ 1,590 $ 1,250 $ 1,820 $ 1,460 Average Monthly rent $ 1,050 $ 1,060 $ 1,000 $ 1,080 $ 1,050 Monthly housing costs rounded to the nearest $10. See Table Al for details. With nearly two years of the lowest unemployment rates in the nation, Hawaii household incomes increased between 2003 and 2006. In part, our higher incomes are due to much larger household sizes with several earners per household. For this reason, housing analysts seek a measure of economic well -being that takes household size into account. Housing Policy Studies since 1992 have used the income guidelines set forth by the U.S. Department of Housing and Urban Development (HUD) for that purpose. HUD guidelines express income in terms of the median household income for each of Hawaii's four Counties. Figure 3 shows the distribution of Hawaii households according to HUD guidelines in 2006. 11 For details on finding reported in this section, see Table Al in the appendix. Hawaii Housing Policy Study, 2006 Page 16 © SMS, Inc. February, 2007 Figure 3. Hawaii Households at HUD Guideline Levels, 2006 25% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................... . 20% 15% 10% 5% 0% less than 30 b 50% 51 b 80% 81 b 120% 121 b 141 b more than 30% 140% 180% 180% The distribution of households at HUD guidelines across the counties is nearly identical because the guidelines are based on the median household income for each county. The distributions also differ very little across time. The guidelines are particularly useful since they describe the types of housing suited to each income level. Households with incomes below 30 percent of the median income are very likely to require assisted housing of some sort. Those between 30 and 50 percent of the median are unlikely to qualify for financing to buy units. Those between 50 and 80 percent of median income may have difficulty qualifying for conventional financing. The ability of those from the 80 to 120 percent group to secure housing depends on the market. With Hawaii's very high housing costs, they will have difficulty finding the housing they might want to have this year. Households with incomes between 120 and 140 percent of median income will need affordable housing units. Those with incomes between 140 and 180 percent of median will do well in the lower half of the market, and those above 180 percent of median are expected to be able to secure housing without difficulty. The more important question is how Hawaii's households are doing in the current boom housing market. Between 2003 and 2006 both purchase price for housing and rent costs soared. During the first half of that period, availability was very low. By the time the Housing Policy Demand Survey was conducted, availability was somewhat better, but costs were at all -time highs. We might expect that the shelter -to- income ratio increased as a result. Hawaii Housing Policy Study, 2006 Page 17 © SMS, Inc. February, 2007 Table 8. Shelter -to- Income Ratios by County, 2006 "No shelter cost" includes those renting without payment of cash rent and homeowners with paid -up mortgages. In 2006, just over 40 percent of Hawaii residents were paying less than 30 percent of their monthly income for shelter. That level is considered to be the norm for homeowners. It would be an asset for a family applying for a home loan. But nearly one in four households across the State was paying more than 40 percent of the monthly income for shelter. The market has affected the ratio over time. The percent of households paying more than 40 percent of their income for shelter dropped steadily between 1992 and 2003. The depressed housing market of the nineties held prices and rents in check while the burgeoning economy raised household incomes. Between 2003 and 2006, however, rapidly rising housing costs pushed the shelter -to- income ratio back to its 1997 level. High rents in the County of Maui have clearly had a negative impact on county residents. Fully 30 percent of Maui residents live with shelter payments taking up more than 40 percent of their income. Nearly half of all Maui households (46 %) are spending more than 30 percent of their income on housing. Conditions within Hawaii households have not changed significantly as a result of the rising prices for housing. Residents rate the condition of their units about the same as they did in 2003. About 78 percent reported that their units were in excellent or satisfactory condition 12. As usual, renters were more likely than owners to be critical of their unit condition. Ratings did not differ significantly across counties. Crowding and doubling up, which had fallen steadily since 1992, were a bit lower than in 2003. Fifteen percent of all households were either living in crowded units or living with more people in the household than they would choose. We note, however, that it was the crowding index that caused the drop. The new units built since 2000 are generally larger than those built during the nineties, and that reduced the number of persons per -room overall. Doubling -up, either living with several generations in the household or living with non - family members, increased since 2003. That suggests that the higher prices and lower availability between 2004 and 2006 slowed the rate of household formation. 12 These were the top two categories in a four -point scale used by Demand Survey respondents to describe their relative satisfaction with the condition of their current unit. Hawaii Housing Policy Study, 2006 Page 18 © SMS, Inc. February, 2007 State of Hawaii County of Honolulu County of Hawaii County of Maui County of Kauai Less than 30% household Income 40.7 40.6 43.4 36.5 43.0 30 to 40% of household income 12.8 12.4 12.4 15.8 12.0 More than 40% household income 25.7 25.1 26.1 30.0 24.0 No shelter cost 20.8 21.9 18.1 17.7 20.9 "No shelter cost" includes those renting without payment of cash rent and homeowners with paid -up mortgages. In 2006, just over 40 percent of Hawaii residents were paying less than 30 percent of their monthly income for shelter. That level is considered to be the norm for homeowners. It would be an asset for a family applying for a home loan. But nearly one in four households across the State was paying more than 40 percent of the monthly income for shelter. The market has affected the ratio over time. The percent of households paying more than 40 percent of their income for shelter dropped steadily between 1992 and 2003. The depressed housing market of the nineties held prices and rents in check while the burgeoning economy raised household incomes. Between 2003 and 2006, however, rapidly rising housing costs pushed the shelter -to- income ratio back to its 1997 level. High rents in the County of Maui have clearly had a negative impact on county residents. Fully 30 percent of Maui residents live with shelter payments taking up more than 40 percent of their income. Nearly half of all Maui households (46 %) are spending more than 30 percent of their income on housing. Conditions within Hawaii households have not changed significantly as a result of the rising prices for housing. Residents rate the condition of their units about the same as they did in 2003. About 78 percent reported that their units were in excellent or satisfactory condition 12. As usual, renters were more likely than owners to be critical of their unit condition. Ratings did not differ significantly across counties. Crowding and doubling up, which had fallen steadily since 1992, were a bit lower than in 2003. Fifteen percent of all households were either living in crowded units or living with more people in the household than they would choose. We note, however, that it was the crowding index that caused the drop. The new units built since 2000 are generally larger than those built during the nineties, and that reduced the number of persons per -room overall. Doubling -up, either living with several generations in the household or living with non - family members, increased since 2003. That suggests that the higher prices and lower availability between 2004 and 2006 slowed the rate of household formation. 12 These were the top two categories in a four -point scale used by Demand Survey respondents to describe their relative satisfaction with the condition of their current unit. Hawaii Housing Policy Study, 2006 Page 18 © SMS, Inc. February, 2007 HOUSING DEMAND This section deals with a unique measure of housing demand. It measures demand as interest in moving to a new housing unit, whether to buy or to rent. It considers interest in moving at any time in the relatively near future 13. The inverse of this measure (one minus the percent who want to move) is the percentage of households who told us that they were in the housing unit where they wanted to live and had no intention of moving in the foreseeable future. This measure of demand should not be confused with other less comprehensive measures of demand used elsewhere. It should not be confused with the number of housing units that should be built in Hawaii. Many, if not most, of the units shown at the bottom of Table 9 will be supplied from current inventory. Our measure of demand suggests the level of real estate activity that can be expected in the relatively near future. Table 9 shows that about 40 percent of all Hawaii households are interested in moving to a new unit. Interest is somewhat higher in Hawaii and Maui Counties. Price increases have been higher in those two counties and while more units have been added to the inventory than in other counties (see table 32), the rate of out -of -state ownership has also been much higher (see Table 5). This suggests that pent -up demand may be higher in these two counties than in Honolulu or Kauai Counties. Table 9. Interest in Moving to a New Home by County, 2006 "Will move out of state" measured as first choice out of state. Effective demand eliminates those moving out of state from the overall demand estimate. Percent is percent of all movers. "Estimated number of movers" is the number of households wishing to move to a new unit minus those who will move to units outside of Hawaii. Just less than 20 percent of all those who want to move expressed a desire to move to a new home outside of Hawaii. As usual, there were more residents planning to move out from Honolulu than from other counties. We were surprised to see Kauai County's figure at 21 percent this year, much higher than the 13 percent for Maui and Hawaii Counties. If we subtract those who want to leave Hawaii from those who want to move, we get an estimate of effective demand that is comparable across time and measures of pressure on the housing market over the next several years. Across the state, effective demand is expected to be equal to about 33 percent of all 2006 households. The difference between Hawaii and Maui Counties (40 %) on one hand, and Honolulu and Kauai Counties on the other (30 %) is even greater by this measure. 13 Data were taken from the Housing Demand Survey. All respondents were asked if and when they intended to move to their next housing unit. Hawaii Housing Policy Study, 2006 Page 19 © SMS, Inc. February, 2007 State of Hawaii County of Honolulu County of Hawaii County of Maui County of Kauai Want to move to a new home 39.8 38.8 42.1 45.1 35.6 Will move out -of -state 19.7 22.5 12.7 13.2 20.6 Effective demand for homes 32.6 30.9 37.2 39.6 29.0 Estimated number of movers 142,362 93,528 22,796 19,577 6,362 "Will move out of state" measured as first choice out of state. Effective demand eliminates those moving out of state from the overall demand estimate. Percent is percent of all movers. "Estimated number of movers" is the number of households wishing to move to a new unit minus those who will move to units outside of Hawaii. Just less than 20 percent of all those who want to move expressed a desire to move to a new home outside of Hawaii. As usual, there were more residents planning to move out from Honolulu than from other counties. We were surprised to see Kauai County's figure at 21 percent this year, much higher than the 13 percent for Maui and Hawaii Counties. If we subtract those who want to leave Hawaii from those who want to move, we get an estimate of effective demand that is comparable across time and measures of pressure on the housing market over the next several years. Across the state, effective demand is expected to be equal to about 33 percent of all 2006 households. The difference between Hawaii and Maui Counties (40 %) on one hand, and Honolulu and Kauai Counties on the other (30 %) is even greater by this measure. 13 Data were taken from the Housing Demand Survey. All respondents were asked if and when they intended to move to their next housing unit. Hawaii Housing Policy Study, 2006 Page 19 © SMS, Inc. February, 2007 Effective demand has changed notably since 1992, reflecting the changing condition of Hawaii's housing market. Across the State, effective demand fell continuously from 42 percent in 1992 to 38 percent in 1997, 35 percent in 2003, and 33 percent in 2006. In the City and County of Honolulu, effective demand fell from the highest in the state (42 %) in 1992 to the lowest in the State (31 %) in 2006. Kauai County demand also dropped in the Study years. In Hawaii and Maui Counties, effective demand dropped from 1992 through 2003, and has since risen to nearly 40 percent of 2006 households. Table 10. Effective Demand by County, 2006 There is little doubt that housing prices have affected demand estimates. Nearly 30 percent of all those who expect to be moving out of Hawaii mentioned housing prices as their main reason for leaving. That's up from 12 percent in 1997 and 19 percent in 2003. And two - thirds of those who said they would not be buying a home on their next move said that housing costs were one of the major reasons for that decision. All of this causes some concern about the drop in demand and its implications for Real Estate activity in the next several years. To what extent does low effective demand reflect despair prompted by a market in which the average price of a 2- bedroom house rose from $375,000 to $665,000 in less than three years? The market has also produced steadily increasing home ownership rates, interest rates remain low, and housing production is at an all -time high. With the leveling off of prices and a drop in rents in the last half of 2006, will demand revive? Or will it take some time to work a market adjustment that will change the outlook at the middle of the market? HOUSING PREFERENCES Buyer and renter preferences for certain housing unit characteristics were measured in 2006 as in the past. The objective was to provide information on preferences to support a broad range of housing issue analysis over the next few years. In this section of the report we will briefly describe the most salient of those preferences. See Table A3 in the appendix for details. Among all households that want to move, 63 percent want to own their next unit. This figure has changed little over the last 15 years. This year the preference for ownership was unusually high for Hawaii County (71%), and somewhat lower than usual for Kauai County (55 %). Overall, single family units remain the first choice of the majority of would -be buyers. Hawaii Housing Policy Study, 2006 Page 20 © SMS, Inc. February, 2007 State of Hawaii County of Honolulu County of Hawaii County of Maui County of Kauai 1992 41.6 42.5 39.7 39.1 38.4 1997 37.5 36.4 34.8 42.5 36.0 2003 35.1 35.1 35.3 35.8 33.0 2006 32.6 30.9 37.2 39.6 29.0 There is little doubt that housing prices have affected demand estimates. Nearly 30 percent of all those who expect to be moving out of Hawaii mentioned housing prices as their main reason for leaving. That's up from 12 percent in 1997 and 19 percent in 2003. And two - thirds of those who said they would not be buying a home on their next move said that housing costs were one of the major reasons for that decision. All of this causes some concern about the drop in demand and its implications for Real Estate activity in the next several years. To what extent does low effective demand reflect despair prompted by a market in which the average price of a 2- bedroom house rose from $375,000 to $665,000 in less than three years? The market has also produced steadily increasing home ownership rates, interest rates remain low, and housing production is at an all -time high. With the leveling off of prices and a drop in rents in the last half of 2006, will demand revive? Or will it take some time to work a market adjustment that will change the outlook at the middle of the market? HOUSING PREFERENCES Buyer and renter preferences for certain housing unit characteristics were measured in 2006 as in the past. The objective was to provide information on preferences to support a broad range of housing issue analysis over the next few years. In this section of the report we will briefly describe the most salient of those preferences. See Table A3 in the appendix for details. Among all households that want to move, 63 percent want to own their next unit. This figure has changed little over the last 15 years. This year the preference for ownership was unusually high for Hawaii County (71%), and somewhat lower than usual for Kauai County (55 %). Overall, single family units remain the first choice of the majority of would -be buyers. Hawaii Housing Policy Study, 2006 Page 20 © SMS, Inc. February, 2007 The preference for ownership units is not always translated into reality in the marketplace. About six percent of survey respondents who said they would be moving to an owned unit next time also said they were not sure they would be able to afford it and may continue renting. That would drop the purchase incidence to about 59 percent from the initial estimate. That would be a more reliable estimate of the actual buyer rate in the market. And if that is the case, we might expect that the growth in home ownership in Hawaii will stabilize or even drop a bit over the next few years. Buyer Preferences Once again, the majority of potential buyers (83 %) preferred single - family detached homes. Single- family units are more important to buyers in Hawaii (92 %), Kauai (86 %), and Maui Counties (89 %) than in Honolulu (79 %). The County of Hawaii, with the lowest percentage of condominium units in the State, also showed the lowest preference for condo units (5% vs. 10 %). When asked if they would accept a condominium unit if they could not find a single - family unit in their price range, half of the buyers (53 %) statewide said they would. In Hawaii County, that figure dropped to 40 percent of potential buyers. About 43 percent of potential buyers said they would be looking for a one - bedroom unit and 49 percent said they would need at least two bedrooms. The preferred number of bedrooms was a bit lower than in the past, perhaps reflecting a willingness to settle for smaller units in the face of high prices. The same was true for the preferred number of bathrooms. More than 90 percent of buyers said they would need one - and -a -half or two bathrooms. Asked what would be the smallest size unit they would accept. More than a third (39 %) of the would -be buyers said they would need 1,500 square feet or more. Thirty -eight percent said they could accept units smaller than 1,200 square feet. Renter Preferences Among those who would rent their next unit, 49 percent preferred to rent a single - family house. About 43 percent preferred an apartment or condo, and another six percent chose a townhouse. Preference for single - family homes was once again much higher on the neighbor Islands than on Oahu, and Oahu renters were more interested in townhomes. Across the State, nearly all of the potential renters were willing to take units with fewer than three bedrooms. Forty -two percent were willing to take studio apartments or cottages. One - bedroom units were acceptable to 37 percent and 20 percent said they would need at least two bedrooms. Again, these figures suggest a willingness to take smaller units than in the past. The number of bathrooms was also relatively low, with 83 percent reporting that they could accept one - and -a -half baths. About 22 percent of potential renters said they would need 1,500 or more square feet of space in their next unit. Almost double that number (38 %) said they could get along with less than 1,000 square feet of living space. Hawaii Housing Policy Study, 2006 Page 21 © SMS, Inc. February, 2007 FINANCIAL QUALIFICATIONS Of course not everyone who wants to buy or rent a new unit will be able to do so in the next few years. The Demand Survey typically includes many items to measure the relative ability of potential buyers or renters to purchase certain housing products. Although no particular product is being evaluated here, it will be useful to review the qualification factors and get an idea how they may affect purchasing capacity in the near future. Complete descriptions of financial qualification data are presented in Table A4 in the appendix. We have selected certain of those factors for presentation in Table 11. For this presentation we chose the levels for each factor that might qualify a potential buyer to obtain conventional financing for a home priced at about $450,000. Table 11. Financial Qualifications by County, 2006 Percent of current homeowners who want to buy another unit. All other percentages based on total households who want to move and will stay in Hawaii. Current homeowners' monthly payments for mortgage and utilities. Homeownership in Hawaii may involve substantial appreciation. Assuming the homeowner has been in the unit for three or more years, sufficient equity may be available for a down payment on a new unit. About 48 percent of all potential buyers own their own homes, and 60 percent of those have been living in that unit for more than three years. If home equity is not available, the prospective buyer may have sufficient savings to apply toward a down payment. Over 72 percent of all prospective buyers have at least $5,000 in family savings or investments. Nevertheless, by their own best estimate, only 39 percent of all would -be buyers will be able to gather $60,000 as a down payment. About 35 percent of all potential buyers have household incomes in excess of 140 percent of the County median. While there is no set income required for financing of this type, the 140 percent level is usually about right for borrowing 85 percent of $450,000. That may be offset if there is more than one person employed, and about 72 percent of buyers pass that test. But by their own estimate, 15 percent of buyers felt their current level of indebtedness would cause problems if they sought mortgage financing. Hawaii Housing Policy Study, 2006 Page 22 © SMS, Inc. February, 2007 State of Hawaii County of Honolulu County of Hawaii County Of Maui County of Kauai Factors affecting down payment Percent homeowners 47.5 43.0 59.1 50.2 62.4 Have adequate equitya 60.2 62.3 60.8 49.9 61.8 Have more than $5,000 in savings 72.3 78.3 54.8 69.2 71.9 Can get $60,000+ down payment 38.6 38.7 38.9 37.6 38.8 Factors affecting financing Income above 140% of median 34.7 34.0 38.0 34.0 35.6 Debt will cause financing problems 15.1 14.7 17.2 14.1 16.7 Factors affecting monthly payment Can afford to pay $2,000 or more 53.9 56.9 43.2 52.0 55.7 Currently pay more than $1,700b 56.9 63.1 38.9 60.0 49.3 Percent of current homeowners who want to buy another unit. All other percentages based on total households who want to move and will stay in Hawaii. Current homeowners' monthly payments for mortgage and utilities. Homeownership in Hawaii may involve substantial appreciation. Assuming the homeowner has been in the unit for three or more years, sufficient equity may be available for a down payment on a new unit. About 48 percent of all potential buyers own their own homes, and 60 percent of those have been living in that unit for more than three years. If home equity is not available, the prospective buyer may have sufficient savings to apply toward a down payment. Over 72 percent of all prospective buyers have at least $5,000 in family savings or investments. Nevertheless, by their own best estimate, only 39 percent of all would -be buyers will be able to gather $60,000 as a down payment. About 35 percent of all potential buyers have household incomes in excess of 140 percent of the County median. While there is no set income required for financing of this type, the 140 percent level is usually about right for borrowing 85 percent of $450,000. That may be offset if there is more than one person employed, and about 72 percent of buyers pass that test. But by their own estimate, 15 percent of buyers felt their current level of indebtedness would cause problems if they sought mortgage financing. Hawaii Housing Policy Study, 2006 Page 22 © SMS, Inc. February, 2007 The monthly mortgage payment may be easier to manage. About 54 percent of potential buyers say they can afford to pay $2,000 or more each month. Among current homeowners, 57 percent are already paying more than $1,700 a month in mortgage and utilities. Many renters who want to buy will have to increase their monthly shelter payment substantially when they move up to home ownership. Only 38 percent of them are paying more than $1,700 a month for shelter now. MODELING HOUSING FUTURES, DEVELOPING HOUSING POLICY In each last three Hawaii Housing Policy Studies, the Hawaii Housing Model was reconstructed and updated. The model was developed to estimate long -range changes in the affordability, price, supply, and demand for housing units in Hawaii. In the past, the Housing Model has been a time series model based on a simple combination of population growth and housing production. Over time, it has become a key piece of the Housing Policy Study. It summarizes the most important findings of a mammoth data collection effort to give policymakers a long - range view of housing and an understanding of how the housing market works. Improvements to the 2006 Model In 2006, the Hawaii Housing Model was completely redesigned. The amount of baseline information used to develop the model was greatly expanded, as were the types of information generated from the model. The structure of the model was redesigned as a supply and demand model. The population and housing inventory elements have remained as central factors in the model, and major components have been added to drive the affordability estimation procedure. Interested readers can refer to the Technical Report for a more detailed explanation of the structure and function of the Hawaii Housing Model. Functionally, the new Housing Model depends to a greater extent on the affordability curve. The affordability ratio is defined as the ratio of the affordable housing price to the median home price in Hawaii. 14 Affordability increases when household income grows at a faster rate than housing prices. It decreases when housing prices rise swiftly ahead of household income. In 2006, affordability was the lowest it has been in 25 years. Housing prices in Hawaii are very unaffordable right now for households at all income levels and it may be many years before housing is affordable again. Past performance of the Hawaii housing market following a price run -up suggests that home prices remain stable for a while and decrease slowly thereafter. Household income rises at a fairly stable rate. After a short run -up housing costs and prices affordable to a median income household reach parity after a few years. The current run -up is the largest in history. The price /income adjustment needed to reach parity will take longer to achieve. 14 That is, affordability is equal to the estimated price of a housing unit that can be purchased with conventional financing by a household with median income, to the median price of the same type of unit, calculated annually over time. Hawaii Housing Policy Study, 2006 Page 23 © SMS, Inc. February, 2007 Figure 4. Affordability Curve for State of Hawaii, 1980 to 2030 Figure 4 shows the affordability curve for the State of Hawaii. Actual ratios have been calculated from existing data up to 2006. Ratios have been estimated by SMS for 2007 through 2030. Periods of greater affordability occur when household income increases at a higher rate than housing prices increase (assuming interest rates remain relatively stable). Low points in the affordability cycle occur when prices have risen faster than income. In Hawaii, the low points on the affordability curve occur in 1982, 1991, and 2006, corresponding to the endpoints of the last three housing price run -ups. Peaks in Hawaii's affordability curve occurred between 1985 and 1989, and from 1998 to 2002, corresponding to downturns and slow periods in Hawaii's real estate market. The affordability forecast predicts housing prices will be relatively flat for about 6 to 7 years, at which time they will start to increase at a modest rate. The model is currently based on a growth rate of 4.6 percent per year for household income, which is an aggressive rate and assumes that Hawaii's real GSP will continue to grow at rates near two percent per annum though 2013. The forecast suggests that the next price run -up can be expected sometime between 2018 and 2022. Hawaii has had a few large price run -ups in the past and recovery patterns were very different for the last two. The model is not designed to predict exactly what will happen and when, but it shows a rough approximation of how supply and demand functions in the housing market. The Housing Model develops independent forecasts for each of Hawaii's four counties. Table 12 shows affordability ratios for each county. Lower affordability ratios indicate housing markets in greater stress. Affordability is highest on Oahu and in Hawaii County. Ratios are very low for Maui and Kauai Counties, two counties with the longest price run -ups. Hawaii Housing Policy Study, 2006 Page 24 © SMS, Inc. February. 2007 1.20 AFFORDABILITY 0 1.10 - U d 1.00 -------- - - - - -- (6 7 � 0.90 - - - - -- -- -- - - - - ------- - - - - - -- - - - -- Q v 0.80 - - - - - -- ----- - - - - -- d a� 0.70 ------------- - - -- n m -2 0.60 ----------------------------------------- 0 tp Q 0.50 0.40 O N V (O 00 O N V (O 00 O N V (O 00 O_ N_ V (O o0 O N V (O W O 00 00 00 00 00 M M M M M O O O O O N N N N N M m m m m m m m m m m O O O O O 00000000000 N N N N N N N N N N N N N N N N Figure 2 Figure 4 shows the affordability curve for the State of Hawaii. Actual ratios have been calculated from existing data up to 2006. Ratios have been estimated by SMS for 2007 through 2030. Periods of greater affordability occur when household income increases at a higher rate than housing prices increase (assuming interest rates remain relatively stable). Low points in the affordability cycle occur when prices have risen faster than income. In Hawaii, the low points on the affordability curve occur in 1982, 1991, and 2006, corresponding to the endpoints of the last three housing price run -ups. Peaks in Hawaii's affordability curve occurred between 1985 and 1989, and from 1998 to 2002, corresponding to downturns and slow periods in Hawaii's real estate market. The affordability forecast predicts housing prices will be relatively flat for about 6 to 7 years, at which time they will start to increase at a modest rate. The model is currently based on a growth rate of 4.6 percent per year for household income, which is an aggressive rate and assumes that Hawaii's real GSP will continue to grow at rates near two percent per annum though 2013. The forecast suggests that the next price run -up can be expected sometime between 2018 and 2022. Hawaii has had a few large price run -ups in the past and recovery patterns were very different for the last two. The model is not designed to predict exactly what will happen and when, but it shows a rough approximation of how supply and demand functions in the housing market. The Housing Model develops independent forecasts for each of Hawaii's four counties. Table 12 shows affordability ratios for each county. Lower affordability ratios indicate housing markets in greater stress. Affordability is highest on Oahu and in Hawaii County. Ratios are very low for Maui and Kauai Counties, two counties with the longest price run -ups. Hawaii Housing Policy Study, 2006 Page 24 © SMS, Inc. February. 2007 Table 12. 2006 Prices and Affordability by County, 2006 County Actual Price Affordable Price Affordability Ratio City & County of Honolulu $434,508 $311,783 .72 County of Maui $562,614 $296,773 .53 County of Hawaii $362,425 $250,128 .69 County of Kauai $543,661 $270,690 .50 State of Hawaii $448,932 $299,551 .67 Source: Prices from MLS, ratios calculated by SMS. Needed Units One impact of rapid price run -ups and lower affordability is an increase in the number of households with inadequate housing. Inadequate housing might be defined to include households affected by pent -up demand15, doubling up16, and homelessness". Between 2003 and 2006, despite decreasing intention to move in Hawaii, it appears that pent -up demand, doubling -up, and homelessness all went up. One method of dealing with those problems is to increase the number of affordable housing units available. The Hawaii Housing Model includes a procedure for developing estimates of "needed units" for each county and for the State as a whole. Needed units were calculated as the number of households that cannot obtain a housing unit in the current market. The 2006 estimates were based on the number of households that were doubled -up. The current estimate does not include those who are homeless18. Method and Definitions The estimate of needed housing units presented here was taken from the Hawaii Housing Model 2006. Inherent in that supply and demand housing model is an estimate of the number of units that would provide all potential buyers and renters with an appropriate housing unit. Over several years, that estimate is not a specific number of housing units, but rather the number of sales or rental agreements completed during the period. Some of those agreements will involve re -sales or rental contracts involving existing housing units, others will require that new units be produced in Hawaii. 15 Pent up demand: households with the desire to move to a new unit but unable to do so. The number of households who will be moving out of State to find affordable housing, and those who cannot buy because of soaring housing costs, have increased since 2003. 16 Doubling -up: multi - generational families or families living with unrelated individuals in one unit who would rather split up. The number of doubled -up households has increased since 2003. 17 The number of homeless persons and families has not been measured since 2003. Those who deliver services to homeless people in Hawaii expect that the new measures will show an increase in homelessness since 2003. 18 The Hawaii Homeless Point -in -Time Count, 2007 is currently under way. Results will be included in the Hawaii Housing Model in 2007. Hawaii Housing Policy Study, 2006 Page 25 © SMS, Inc. February, 2007 New Units Needed, an Estimate: The new unit estimate was developed from data collected in the Housing Demand Survey, 2006. The estimate begins with the assumption that the housing market in Hawaii is saturated, i.e. that all existing units (except a reasonable vacancy rate) are being used by current residents. Potential buyers who are currently doubled -up would all need a new unit. The Housing Demand Survey measures doubled -up households, those in which more than one family is residing in a single household, and thus provides an estimate of new units needed to facilitate the housing market. The initial estimate therefore reflects the number of housing units needed to eliminate pent -up demand and accommodate new household formation. Estimating Need for Specific Unit Types and Sizes: The initial estimate of needed units did not provide any further details on the types and sizes of units that might be needed. The Housing Demand Survey 2006 did not identify unit characteristics preferred by the specific family within doubled -up households that wanted to move. Therefore a method of estimating an appropriate distribution of needed units was required. The logic of the estimation method was as follows. By definition, the family within doubled -up households that wanted to move could not do so because they could not afford to buy or rent in the current market. Therefore, we might reasonably expect that their unit preferences might be very similar to those of other households who wanted to move but could not afford to buy in Hawaii's current market. The Housing Demand Survey has a very large sample size (n= 4,997), and includes a lengthy battery of items19 to measure qualifications to buy or rent. Those items were used to identify within the total number of potential buyers and renters, those who could not afford to buy or rent the unit of their choice 20. Estimates were developed separately for each of HUD's income classifications. The next step was to develop a demand profile by summarizing, for each HUD income classification, the number of buyers and renters, and the number who preferred single - family and multi - family units, within the group who could not afford the unit they needed. Finally, we expanded the survey profile to the number of needed units produced in the previous step. The result was the configuration of needed units shown in Table 13 on the following page. The estimation procedure is sound and based on reasonable assumptions. Befitting the realities of Hawaii's housing market, it is also complex and involves numerous factors that affect buyer decisions. The estimation method was developed to replace the simpler and somewhat more arbitrary method of estimating needed units in past iterations of the Housing Policy Study. In the end, its utility will depend on the extent to which policies based on the estimates are successful in managing Hawaii's housing needs. We look forward to monitoring its use for that purpose and to refining the estimation methods as required. 19 The battery includes questions on current tenancy, years in unit, estimated unit value, current rent or mortgage payment, household income, household size, preferred tenancy, preferred unit type, number of bedrooms and bathrooms required, affordable down payment, affordable monthly rent or mortgage payment, household savings, and household debt. 2° Note that the "choice" was not their first choice, but rather the type and size unit they would be willing to accept in order to buy or rent a unit they could afford. Hawaii Housing Policy Study, 2006 Page 26 © SMS, Inc. February, 2007 Table 13. Needed Housing Units by County Housing units needed to eliminate pent -up demand and accommodate new household formation between 2007 and 2011 for the State of Hawaii and its four counties, by preferred tenancy and unit type. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 27 February, 2007 Total Units Needed, 2007 through 2011 HUD Income Classification LT 30 30 to 50 50 to 80 80 to 120 120 to 140 140 to 180 180+ 1 Total Honolulu 3,683 1,477 5,069 3,608 780 1,865 1,530 18,013 Ownership Units 1,559 701 3,874 3,311 753 1,319 989 12,507 Single - Family 147 564 368 370 260 415 488 2,613 Multi - Family 1,412 137 3,506 2,941 493 904 500 9,894 Rental Units 2,124 776 1,195 297 26 546 541 5,506 Single - Family 753 293 556 159 - - 55 1,815 Multi-Family 1,372 482 639 138 26 546 486 3,691 Maui 1,115 710 747 738 108 495 311 4,224 Ownership Units 653 362 499 612 108 293 288 2,815 Single - Family 156 38 300 372 3 155 119 1,143 Multi - Family 497 324 199 239 105 138 170 1,672 Rental Units 462 349 248 126 - 202 22 1,409 Single - Family 440 333 30 65 - 115 - 982 Multi - Family 22 15 218 61 - 88 22 426 Hawaii 1,146 458 1,056 537 106 365 619 4,286 Ownership Units 469 286 754 418 71 251 593 2,841 Single - Family 275 121 259 294 21 193 437 1,599 Multi - Family 195 165 495 124 49 58 156 1,242 Rental Units 677 171 302 119 36 114 26 1,444 Single - Family 375 71 144 - 36 70 26 722 Multi - Family 301 100 158 119 - 44 - 722 Kauai 374 157 369 316 187 54 158 1,615 Ownership Units 114 24 285 178 118 54 123 895 Single - Family 75 8 151 67 60 46 79 485 Multi - Family 39 16 135 111 58 8 44 410 Rental Units 260 133 83 139 69 - 35 720 Single - Family 231 29 30 67 26 - - 383 Multi - Family 29 104 53 72 43 - 35 337 State of Hawaii 6,318 2,802 7,240 5,200 1,181 2,779 2,617 28,137 Ownership Units 2,795 1,373 5,412 4,519 1,050 1,916 1,993 19,058 Single - Family 653 731 1,077 1,104 344 809 1,123 5,841 Multi - Family 2,142 642 4,335 3,415 706 1,108 870 13,217 Rental Units 3,523 1,429 1,828 681 131 863 624 9,079 Single - Family 1,799 727 760 290 62 184 80 3,902 Multi - Family 1,724 702 1,068 390 69 678 544 5,176 Housing units needed to eliminate pent -up demand and accommodate new household formation between 2007 and 2011 for the State of Hawaii and its four counties, by preferred tenancy and unit type. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 27 February, 2007 Interpretation The numbers in Table 13 represent the profile of new housing units needed to accommodate pent -up demand and new household formation in Hawaii between 2007 and 2011. The total number of units needed is 28,137, including 19,058 ownership units and 9,079 rental units21. The configuration of needed units across counties, income groups, and unit types has clear policy implications. At this early stage of development and application of the needed units estimate, it may be useful to review some of the salient implications of these numbers and their application to policy formation. Total units needed The total number of units needed, 28,137, is survey a ceiling on production estimates for the next five years. The numbers represent units that must be developed in addition to expected production under normal market conditions. That level of production is probably an unrealistic goal for any set of policy initiatives. First of all, that level of production has never been possible in the past and seems outside the scope of current resources. Second, producing units at the ceiling level will result in a significant supply surplus. By definition, all of these units are desired by households that cannot afford to buy or rent in the current market. It is likely that some of them will not be able to afford their desired unit prices that are well below "affordable" levels by any definition. Finally, at income levels above 120 percent of median, there is no guarantee that the new units would be available to the particular households that need them. Thus, policy initiative designed to produce 28,137 housing units are likely to be ineffective and inefficient. But the total number of needed units is not without policy significance. The 28,137 units needed is a measure of the extent to which the Hawaii housing market might be called "unhealthy ", or unable to produce sufficient units at the right price and configuration for the market. Over time, if that number goes down, either in absolute terms or as a percentage of the total number of households in Hawaii, the housing market might be called healthier. 2. Need Units Profile The profile of units needed — the relative numbers of single - family and multi - family owned and rented units suited to different income groups in each county — appears to be reasonable and suited to policy development. The estimate includes housing units at all levels of buyer qualifications, from 6,318 units required to house people in the lowest of HUD's income levels and 2,617 units required to fill the needs of households in HUD's highest income class. As expected, the number of units required to fill the needs of households with income below 80 percent of each county's median households income is notable higher than needs among those with higher incomes. 21 The number of significant digits in each estimate is an artifact of the estimation procedure. It should not be interpreted as an indication of the precision of the estimate in any cell of the table. Hawaii Housing Policy Study, 2006 Page 28 © SMS, Inc. February, 2007 The numbers in each category are not absolutes. Table 13 might best be treated as a set of guidelines for development of new units. It is clear that single - family ownership units are in greater demand than multi - family rental units at the high end of the market, and that the reverse is true for the low end of the market. Policies that ignore that basic relationship will probably be ineffective. But forcing policy to conform to the low -level details of Table 13 may be equally ineffective. The data show a need for 29 multi - family rental units for households with incomes below 30 percent of the Kauai County median over five years. Slavish reliance on this number would ignore the fact that developing 114 ownership units for this group will be difficult if not impossible. In the meantime, those 114 households need a place to live and we can expect that many would take advantage of multi - family rentals if available. Supply and Demand for Single - Family Housing Units After a large price run -up like we saw from 2003 -2006, the demand for affordable units grows significantly. In 2006, there are many more households needing units at an affordable price than there are units available at that price. Figures 5 and 6 show supply and demand by HUD household income guidelines for Hawaii County. The charts demonstrate the difference between what households can afford and what is available on the market. Figure 5. Demand and Supply for Single Family Homes by HUD levels in Hawaii County, 2006 100% 10% 90% 24% 80% [1180+% 70% 12% ❑ 140 -180% 49% 60% 6% ❑ 120 -140% 50% 21% ❑ 80 -120% 40% ❑ 50 -80% 10% 30% 18% ❑ 30 -50% 20% 23% ❑ <30% 9% 10% 11% ;;;;;;;�221. 0% 1% Single Family Single Family Demand Supply Demand measured in Housing Demand Survey, 2006; supply calculated from MLS average sales prices 3rd quarter 2006. In Figure 5, demand for single - family units was based on 2006 Hawaii Housing Demand Survey housing preferences by HUD household income levels. Supply of single - family units was estimated by classifying all MLS units available in 2006 according to sales prices affordable to households in each of the HUD income categories. The chart shows that the current supply of ownership units will serve the needs of households with incomes above 140 percent of the county median. It will be somewhat short of units affordable to households with incomes Hawaii Housing Policy Study, 2006 Page 29 © SMS, Inc. February, 2007 between 80 and 140 percent of median. It includes almost no units affordable to households with incomes below 80 percent of median. More than half (55 %) of all households who want to buy cannot afford to buy in this market. On the other hand, the number of units available at affordable prices for those with household incomes greater than 140 percent of the county median far outstrips demand. That is consistent with recent price leveling and decreases in sales activity reported by MLS. The magnitude of the difference between affordable prices and average sales prices suggests a long period of price adjustment. Units affordable to households below 80 percent of the county median are in very low supply22. This suggests the price adjustment period may be particularly stressful to low income households. There is a large demand for single - family units in all income groups. In 2006, few of them will have their housing needs met. Even as the affordability curve approaches parity (where a household with median income can afford a median - priced housing unit), the lower income groups may not be able to find a single family housing solution. Supply and Demand for Multi- family Housing Units Figure 6, the multi - family supply and demand chart, was prepared using the same procedures as the previous charts, but based on demand and supply of multi - family housing units in the County of Hawaii, 2006. This analysis is new for 2006. In past iterations of HPS, the old housing model was not capable of separate estimates for SFD and MFD units. Since there are many more single - family units in the market, SFD results dominated the total- market analysis. Figure 6 shows that the markets for single - family and multi - family units are similar on Hawaii Island. Based on current supply of multi - family units, demand among households with incomes above 120 percent of the county median is over served. There is greater supply that for those units. The opposite is true for households with incomes below 140 percent of median income. And below 50 percent of the HUD median for Hawaii Island there are very few units available.. The comparisons in Figures 5 and 6 are based on crude estimates of supply and demand by HUD income classifications. The estimates do not take into consideration unit size, quality, or location. They do not take into consideration the fact that buyers can switch between the single - family and multi - family markets as they see fit. More important, they involve the assumption that all households in a given HUD classification are equally qualified to purchase in the short - run. Our initial review of qualifications in an earlier section of this report suggests that may not be a viable assumption. We note, however, that data are available to refine these analyses and to test specific policy alternatives should the need arise. 22 The percent of units available to households below 80 percent of median is an underestimate of the situation because many units at that level are tear -downs that could not be eliminated for the data. Hawaii Housing Policy Study, 2006 Page 30 © SMS, Inc. February, 2007 Figure 6. Demand and Supply for Multi - Family Homes by HUD levels in Honolulu, 2006 100% 90% 80% 8 °i° ❑180 +% 0 ° 1 s °i° ❑ 140 -180% 60% ❑ 120 -140% 31% 50% ❑ 80 -120% 40% ❑ 50 -80% 30% 9% ❑ 30 -50% 12% ° 20% ❑ <30% 10% 0% Multi- family Demand Multi- family Supply In the City and County of Honolulu, the market for units in multi - family structures is notably different. There are many more multi - family units available and therefore more opportunities for home ownership among families between 50 and 120 percent of the HUD median. The ability to go beyond gross data on needed units provides opportunities for housing policy in markets with sufficient numbers of affordable multi - family units. In future studies, as the affordability curve approaches parity, this chart will likely show that the multi - family resale market provides opportunities for lower income households, even households at 50 percent of median income, to purchase their own home in the resale market. Model Outputs Figure 7 presents some selected outputs from the Hawaii Housing Model. The data shown there are for the State as a whole. Similar outputs are available for each of the four counties. The median sales price data is presented along with the affordable price for households with median household incomes in each year -- the basis for the affordability ratio. New construction figures are driven by the affordability index. As affordability increases, demand increases, and new construction follows. Mortgage payments follow affordable sales prices, increasing as prices increase, assuming constant interest rates. The sales chart shows actual and forecasted sales. Levels of real estate activity follow demand. The latest addition to the model is a set of components being developed for the Hawaii rental market. Rental prices are shown for the last 15 years. The model is based on advertised rents rather than average rents paid, because the market drives those prices directly. In 2007 we will begin to develop the indirect mechanism by which total shelter payments for renters are affected by advertised rents. Hawaii Housing Policy Study, 2006 Page 31 ©SMS, Inc. February, 2007 8 °i° 48% 1 s °i° 31% 11% 7% 9% 12% ° In the City and County of Honolulu, the market for units in multi - family structures is notably different. There are many more multi - family units available and therefore more opportunities for home ownership among families between 50 and 120 percent of the HUD median. The ability to go beyond gross data on needed units provides opportunities for housing policy in markets with sufficient numbers of affordable multi - family units. In future studies, as the affordability curve approaches parity, this chart will likely show that the multi - family resale market provides opportunities for lower income households, even households at 50 percent of median income, to purchase their own home in the resale market. Model Outputs Figure 7 presents some selected outputs from the Hawaii Housing Model. The data shown there are for the State as a whole. Similar outputs are available for each of the four counties. The median sales price data is presented along with the affordable price for households with median household incomes in each year -- the basis for the affordability ratio. New construction figures are driven by the affordability index. As affordability increases, demand increases, and new construction follows. Mortgage payments follow affordable sales prices, increasing as prices increase, assuming constant interest rates. The sales chart shows actual and forecasted sales. Levels of real estate activity follow demand. The latest addition to the model is a set of components being developed for the Hawaii rental market. Rental prices are shown for the last 15 years. The model is based on advertised rents rather than average rents paid, because the market drives those prices directly. In 2007 we will begin to develop the indirect mechanism by which total shelter payments for renters are affected by advertised rents. Hawaii Housing Policy Study, 2006 Page 31 ©SMS, Inc. February, 2007 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 32 February, 2007 Figure 7. Outputs for the State of Hawaii from the 2006 Hawaii Housing Model N3dian,9ngIe Farrily RmaIe Rich 1980-2030 $1X9'000 -a-Pchd Rioe $1,000,000 — ATudadeNce W,000 N 0 SU1\A //yyyy\� A/ 00,�/ NOY Wdian Nbrtgage PaAm t, New Wits, 19942 M $12000 t Singe Faniy $1Q000 mi4arriy %000 a R $6,000 0 $'4,000 WOO Average Ntxthly Rert,1985 -2030 $5,000 $44,500 singefantj $44000 - *- Nk&(an*y ,c$$33,500 L `- ,'000 o aS2,5y0y0 0 .pl 000 $1,500 $1,0000 $500 n n n n Hawaii Housing Policy Study, 2006 © SMS, Inc. NewConstn action Per Year, 1995 - 2030 $9,000 W00 f sinyefarriy -r Uffibniy 0)$7,000- N $6,000 7 x S5, $ma/y00 yy� 4,0 z $$3,000 M JIC 009 0 $1,000 ^01411101411f° Sales, 1990 -2030 $35,000 c $30°000 a�$25,000 c M $20,000 0 x o $15,000 M $10000 E 0 $5'000 Page 33 February, 2007 ISSUE: DISTANCE TRADE -OFF AND TRAFFIC The Housing Policy Study has looked into the issue of moving to less populated areas since 1997. The greatest opportunities for developing large numbers of housing units at affordable prices are usually located at some distance from population and job centers on all islands. From the buyer's point of view, this usually involves a trade -off between lower priced housing and increased time on the road. As traffic becomes an ever more vexing issue in all counties, the trade -off is of greater interest to all developers and housing policy specialists. In 2006, the Demand Survey asked a series of questions to gather reactions to moving to a new home at some distance from one's job. Results are shown briefly in Table 14, and in greater detail in the appendix to this report. Most buyers would like to buy new homes in the same general area in which they currently live. In part, that is due to the fact that they are relatively near their jobs now23. In 2006, about 70 percent of all prospective buyers wanted to buy a unit in the same area where they live now, and an additional 19 percent wanted to mover even closer to their jobs. The rest wanted to move farther away or said the location didn't make any different to them. There were few meaningful differences from one county to another. Table 14. Moving to Distant Areas a. "Loc" was different for each County: Oahu = Kapolei, Maui = West Maui, Hawaii = other side of Hawaii Island, and Kauai = Poipu. 23 We do not dispute that being near friends and family, church and other community organizations, have as much or more impact on the desire to stay in the same community, but the job is our major concern this year. Hawaii Housing Policy Study, 2006 Page 34 © SMS, Inc. February, 2007 State of Hawaii County of Honolulu County of Hawaii County of Maui County of Kauai Would you like to move.... closer to your job 19.2 19.6 21.6 15.5 16.6 Stay in the same area 69.6 70.5 63.8 71.2 69.3 move farther away 3.1 2.4 5.2 4.7 3.6 If you found the right home at the right price, would you move to (loca)? Yes, would move 36.3 37.8 22.0 35.5 54.9 no, too far away 62.6 62.2 77.6 56.5 44.6 Live in that area now 1.1 0.0 0.4 8.0 0.6 If you moved to (loca), would you....? keep the job you have now 79.3 86.6 42.8 61.1 75.9 Get a job closer to new home 15.9 8.7 56.6 32.0 18.8 Not sure 4.7 4.8 0.6 7.0 5.3 Net addition to traffic - -- 20,300 -390 1,250 1,470 a. "Loc" was different for each County: Oahu = Kapolei, Maui = West Maui, Hawaii = other side of Hawaii Island, and Kauai = Poipu. 23 We do not dispute that being near friends and family, church and other community organizations, have as much or more impact on the desire to stay in the same community, but the job is our major concern this year. Hawaii Housing Policy Study, 2006 Page 34 © SMS, Inc. February, 2007 But in a tight housing market, many people would be willing to move away from their current neighborhoods if they can find a home at an affordable price. Overall, about 36 percent of residents who wanted to buy would be willing to move to a more distant location for that reason. Responses differed significantly from one county to another. In part that reflects the specific locations used in the survey. In part it reflects the traffic situations on each island. Those least willing to move were Hawaii County residents who would have to move "to the other side of the island ". Only 22 percent of them would be willing to do that, even for an affordable housing unit. Honolulu and Maui county residents, who would have to move to Kapolei or West Maui, respectively, were more likely to move. Between 36 and 38 percent of them would move for the chance to get an affordable home. On Kauai, we asked prospective buyers if they would be willing to move to the Poipu area. Almost 55 percent of them said they would do that if an affordable housing unit were available. We can also get an idea of the impact on traffic caused by developing units in distant areas of each island. Prospective buyers who said they would be willing to move were asked if they would keep the same job they have now or get a new job closer to their new home. Responses in each county differed dramatically. Overall, about 16 percent of those who would move to a distant location would give up their jobs to get new ones closer to home. On Oahu, only nine percent would look for a new job in Kapolei. On Kauai, about 19 percent would try to get a job in Poipu. But on Maui, 32 percent of people willing to move the West Maui would try to get a new job there. And in Hawaii County, nearly 57 percent would get a new job on the other side of the island. All that would have some very interesting impacts on traffic. A crude estimate of the impact can be calculated by subtracting the number of households where a new job was sought from the total households who might move and keep their old job24. On Oahu, for instance, fulfilling the survey demand would put over 20,000 additional cars on the road from Kapolei to Honolulu every morning. On Maui, traffic on the road to Ka'anapali would go up by about 4,500 cars at commute times. On Kauai, the road from Poipu to Lihue might see an additional 2,800 cars each morning and afternoon. But on the Island of Hawaii, the net change in traffic would be to decrease cross - island traffic by 390 cars per peak traffic period. The traffic tradeoff issue is illustrative of many similar development issues. Developing large numbers of units at some distance from job centers, without creating jobs there, may cause serious strain on infrastructure. ISSUE: SUSTAINABLE LEASE In recent months the concept of the sustainable lease has been suggested by Hawaii housing planners as a feasible method of producing more affordable housing in the State. The sustainable lease concept is very broadly defined in the industry and it can take many different forms. At base, a sustainable lease is a leasehold arrangement that sustains a property in an affordable price range. Details of the arrangement are generally developed to favor lessees who need affordable housing to a greater extent than might be available in conventional lease agreements. 24 This assumes only one car added to the commute traffic per household. Hawaii Housing Policy Study, 2006 Page 35 © SMS, Inc. February, 2007 Sustainable leases are of interest in Hawaii for several reasons. First, it is an arrangement that allows government to maintain affordable housing developments as affordable over long periods of time. The alternative might be to develop properties for sale at affordable prices, but once they are sold the next buyer pays a market price. Second, sustainable leases on government land can be written to reduce development costs and to greatly enhance the availability of the property to buyers below the level of current market housing. Ground leases can be reduced or even eliminated, down payments can be reduced or even fully absorbed in the sale, and lease prices can be maintained over the course of the lease period. Third, sustainable lease agreements can be written to include features that increase the acceptability of leases in general, and controlled property agreements of a specific nature. Past research has shown, for instance, that one of the chief problems with the lease concept in Hawaii is the inability to pass leased property on to one's heirs. Sustainable leases can be written to allow such transfers. Any sustainable property agreement also entails other limitations on ownership and resale. The property must be owner occupied, must be sold back to the community, and there is usually a ceiling on the resale price. Other aspects of the lease agreement usually offset these features. The Housing Demand Survey 2006 includes a brief set of items to begin the investigation of sustainable lease as an affordable housing development tool. The objective was to test the acceptability of the sustainable lease concept among potential home buyers. Some results are shown in Table 15. Table 15. Sustainable Lease Responses Would consider as lease that... State of Hawaii County of Honolulu County of Hawaii County of Maui County of Kauai ...was a 60 -year renewable lease 49.4 47.6 54.5 52.1 53.3 ... had no ground lease payment 56.9 55.4 61.1 60.5 56.3 ... required no down payment 59.5 58.8 61.4 61.8 56.6 ...could pass it to your heirs 64.8 63.5 70.1 68.0 59.7 All things considered, what is your reaction to a sustainable lease? Prefer sustainable lease 22.5 22.7 23.9 20.6 20.1 Would consider sustainable lease 30.0 29.5 26.8 36.6 30.3 Not sure 13.4 12.3 15.3 13.8 21.5 Still want fee simple 34.1 35.5 34.0 29.0 28.1 Asked of potential buyers who were not interested in leasehold property, even if fee simple property was unavailable in their price range. The sustainable lease questions were asked of potential buyers who had already stated that: (1) they preferred to buy fee simple; and (2) that they would probably not consider leasehold property even if they could not find a home in their price range. Hawaii Housing Policy Study, 2006 Page 36 © SMS, Inc. February, 2007 Statewide, between 49 and 65 percent of buyers who were unwilling to accept leasehold property found the characteristics of the sustainable lease to be acceptable. More than 49 percent said they would consider leasehold property if they could get a 60 -year, renewable lease. Fifty -seven percent said they would consider a lease that had no ground lease payment for the duration of the agreement. Almost 60 percent said they would consider buying leasehold property if it required no down payment. And finally, almost 65 percent reported that they would consider leasehold if they were able to pass the lease on to their heirs and the new leaseholder would automatically receive a new 60 -year lease. The order of acceptance follows findings of past research on the major problems with leasehold property. Solving the most important problems results in bringing in more people to consider the option. After considering these options, many potential buyers changed their minds about leasehold property. Table 15 also shows that, all things considered, about 53 percent of those who had already stated their opposition to leasehold property would consider a sustainable lease with one or more of the options discussed above. A little more than 22 percent of them said they would prefer a sustainable lease. Thirty percent said they would seriously consider it. And there were still 34 percent who would hold out for fee simple property. The results suggest that there is a role for the sustainable lease concept in developing affordable housing for Hawaii. Leasehold arrangements can be used to produce more affordable housing units and maintain them in the affordable housing stock in perpetuity. These data show that, even where leasehold property is unpopular, the sustainable lease appeals to a substantial number of potential home buyers. Once they understand how a sustainable lease works, between 22 and 50 percent of people will be willing to take advantage of a sustainable lease to get into their own homes. Further analysis showed that sustainable leases were most appealing to buyers who most need them. Sustainable leases appealed to more renters than current owners, to those who weren't sure they could come up with a down payment, and to those with debt that might cause financing problems. They appealed to households that were crowded. And they appealed more often to households with shelter -to- income ratios between 30 and 40 percent. Equally important, sustainable leases appealed to prospective homebuyers with incomes between 80 and 140 percent of median income — those perhaps most qualified to buy. Finally, the sustainable lease was attractive to disproportionately high numbers of households that included "hidden homeless" persons — multigenerational households or those doubled -up with non - family members. Hawaii Housing Policy Study, 2006 Page 37 © SMS, Inc. February, 2007 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 38 February, 2007 Table A -1. Characteristics of Housing Units By County, 1990 through 2006 Table A -1 a: Total Housing Units, 1990 -2006 Table A -1 b: Occupied Housing Units, 1990 -2006 State of Hawaii I County of Honolulu County of Hawaii County of Maui 11 County of Kauai 1990 389,810 281,683 48,253 42,261 17,613 1992 411,494 290,571 49,394 51,578 19,951 1997 449,385 311,398 59,098 54,321 24,568 1999 456,091 314,448 61,108 55,475 25,060 2000 460,542 315,988 62,674 56,549 25,331 2003 477,333 322,845 67,878 59,788 26,822 2004 484,936 325,888 70,927 60,888 27,233 2005 491,671 329,300 71,984 62,178 28,209 2006 501,956 332,196 77,577 63,364 28,819 Avg. Ann. Rate of Change 1990-20001 1.7% 1.1% 2.6% 2.9% 3.6% 2003-20061 1.7% 1.0% 4.5% 1.9% 2.4% Table A -1 b: Occupied Housing Units, 1990 -2006 Table A -1 c: Owner Occupied Housing Units, 1990 -2006 State of Hawaii County of Honolulu County of Hawaii County of Maui County of Kauai 1990 356,267 265,304 41,461 33,207 16,295 1992 370,627 270,783 42,373 39,998 17,473 1997 395,545 283,621 50,127 41,998 19,799 1999 400,120 285,501 51,734 42,839 20,046 2000 403,240 286,450 52,985 43,622 20,183 2003 422,443 297,204 56,610 46,367 22,262 2004 428,915 300,046 58,734 47,300 22,835 2005 432,617 300,557 59,470 48,393 24,197 2006 435,818 303,149 61,213 49,484 21,971 Table A -1 c: Owner Occupied Housing Units, 1990 -2006 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 39 February, 2007 State of Hawaii County of Honolulu County of Hawaii County of Maui County of Kauai 1990 191,911 137,910 25,336 19,083 9,582 1992 202,105 142,672 26,035 22,967 10,431 1997 222,031 153,831 31,983 24,110 12,107 1999 225,557 155,465 33,215 24,591 12,286 2000 227,888 156,290 34,175 25,039 12,384 2003 238,927 161,163 37,402 27,017 13,344 2004 252,346 171,755 39,293 27,688 13,609 2005 255,845 173,182 39,949 28,476 14,238 2006 260,986 175,488 41,685 29,502 14,311 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 39 February, 2007 Table A -1d: Hawaii Home Ownership Rates, 1999 to 2006 Table A -2. Characteristics of Housing Units By County, 1992, 1997, 2003 and 2006 State of Hawaii County of Honolulu County of Hawaii County I of Maui County of Kauai 1990 53.9 52.0 61.1 57.5 58.8 1992 54.5 52.7 61.4 57.4 59.7 1997 56.1 54.2 63.8 57.4 61.2 1999 56.4 54.5 64.2 57.4 61.3 2000 56.5 54.6 64.5 57.4 61.4 2003 56.6 54.2 66.1 58.3 59.9 2004 58.8 57.2 66.9 58.5 59.6 2005 59.1 57.6 67.2 58.8 58.8 2006 60.9 59.0 69.1 60.2 66.1 Table A -2. Characteristics of Housing Units By County, 1992, 1997, 2003 and 2006 Note. Percentages may not sum to 100 percent due to rounding. Pre - Hurricane Iniki For number of bedrooms and bathrooms, half -rooms are included with the next highest category. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 40 February. 2007 Tenancy Unit Size (bedrooms) Studio or 1 2 3 4+ County Year Own Rent bedroom bedrooms bedrooms bedrooms Honolulu 1992 48% 52% 20% 32% 30% 19% 1997 54% 46% 16% 27% 36% 21% 2003 61% 39% 15% 25% 35% 25% 2006 1 59% 41% 18% 25% 37% 20% Maui 1992 61% 39% 14% 26% 46% 15% 1997 65% 35% 12% 23% 46% 19% 2003 61% 40% 13% 28% 42% 17% 2006 60% 40% 15% 27% 43% 17% Hawaii 1992 68% 32% 7% 25% 53% 14% 1997 72% 28% 8% 21% 54% 17% 2003 70% 30% 12% 19% 50% 19% 2006 69% 31% 11% 22% 49% 18% Kauai 1992* 60% 40% 12% 19% 53% 15% 1997 67% 33% 8% 19% 57% 15% 2003 66% 34% 11% 20% 53% 17% 2006 66% 34% 10% 21% 51% 18% Total 1992 52% 48% 17% 30% 35% 18% 1997 58% 42% 14% 25% 40% 20% 2003 62% 38% 14% 24% 39% 23% 2006 61% 39% 17% 24% 39% 20% Note. Percentages may not sum to 100 percent due to rounding. Pre - Hurricane Iniki For number of bedrooms and bathrooms, half -rooms are included with the next highest category. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 40 February. 2007 Table A -3a. Household Income Data By County, 1992, 1997, 2003 and 2006 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 41 February, 2007 Household Income $15,000 $25,000 $35,000 $50,000 $75,000 Total Lessthan to to to to to $100,000 County Year Households $15,000 $24,999*" $34,999 $49,999 $74,999 $99,999 or more Refused Honolulu 1992 247,349 N/A 24% 13% 16% 12% 6% 7% 21% 1997 272,234 9% 9% 12% 16% 15% 9% 6% 24% 2003 292,003 8% 10% 14% 22% 18% 11% 17% - - -- 2006 303,149 13% 7% 12% 14% 22% 12% 21% - - -- Maui 1992 34,266 N/A 20% 17% 20% 11% 2% 3% 27% 1997 39,252 10% 8% 16% 18% 15% 7% 6% 20% 2003 43,687 9% 13% 13% 22% 19% 14% 11% - - -- 2006 49,484 11% 8% 11% 18% 20% 15% 17% - - -- Hawaii 1992 39,789 N/A 24% 19% 20% 11% 3% 4% 20% 1997 46,271 14% 14% 15% 15% 12% 4% 4% 22% 2003 54,644 14% 12% 17% 22% 17% 9% 9% - - -- 2006 61,213 13% 10% 13% 16% 22% 10% 16% - - -- Kauai 1992 16,981 N/A 20% 14% 22% 10% 5% 3% 26% 1997 18,817 11% 13% 15% 16% 15% 5% 3% 23% 2003 20,460 13% 12% 16% 21% 18% 9% 12% - - -- 2006 21,971 10% 10% 12% 15% 23% 11% 19% - - -- Total 1992 338,385 N/A 24% 14% 17% 12% 5% 6% 22% 1997 376,574 10% 10% 13% 16% 15% 8% 6% 24% 2003 410,794 10% 10% 14% 21% 19% 10% 15% - - -- 2006 435,818 13% 7% 12% 15% 21% 12% 20% - - -- Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 41 February, 2007 Table A -3b. Households at HUD Income Guidelines By County, 1992, 1997, 2003 and 2006 Percentages may not sum to 100.0 due to rounding. — In 1992, the lowest household income category was "less than $25,000." That category was split into two categories thereafter. In 2003 and 2006, household income was imputed for cases with missing data. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 42 February, 2007 HUD Household Income Guidelines Total Over Over 30% Over 50% Under Over 80% 120% to Over County Year 30% or less to 50 %+ to 80% 80% to 120% 140% 140% Median Honolulu 1992 N/A 20% 19% 40% 23% 10% 27% $ 36,974 1997 8% 15% 21% 36% 30% 7% 20% $ 42,234 2003 5% 19% 22% 41% 22% 7% 25% $ 47,917 2006 14% 10% 20% 22% 9% 9% 15% $ 54,545 Maui 1992 N/A 20% 19% 39% 24% 9% 28% $ 35,843 1997 7% 11% 27% 38% 24% 10% 21% $ 38,908 2003 10% 17% 28% 45% 18% 7% 21% $ 44,297 2006 13% 11% 19% 21% 7% 13% 15% $ 52,500 Hawaii 1992 N/A 20% 18% 38% 24% 10% 29% $ 34,063 1997 3% 19% 21% 40% 23% 10% 24% $ 31,831 2003 5% 14% 28% 43% 22% 6% 25% $ 36,905 2006 14% 11% 18% 20% 5% 12% 19% $ 48,125 Kauai 1992 N/A 21% 18% 39% 21% 9% 30% $ 36,966 1997 9% 18% 27% 45% 25% 9% 12% $ 34,891 2003 6% 23% 27% 49% 20% 7% 18% $ 42,205 2006 12% 11% 18% 21% 10% 13% 15% $ 53,261 Total 1992 N/A 20% 19% 39% 22% 11% 28% $ 36,289 1997 7% 15% 22% 37% 28% 7% 20% $ 39,883 2003 9% 15% 20% 36% 22% 8% 24% $ 46,086 2006 14% 11% 20% 22% 8% 10% 16% $ 53,571 Percentages may not sum to 100.0 due to rounding. — In 1992, the lowest household income category was "less than $25,000." That category was split into two categories thereafter. In 2003 and 2006, household income was imputed for cases with missing data. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 42 February, 2007 Table A -4a. Housing Unit Condition, Owned Units, by County, 1992, 1997, 2003 and 2006 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 43 February, 2007 Owner Occupied Total Housing Excellent Satisfactory County Year Units condition condition Fair condition Poor condition Honolulu 1992 285,487 47% 43% 9% 2% 1997 309,473 31% 47% 18% 4% 2003 292,003 42% 46% 11% 1% 2006 1 303,149 39% 46% 12% 3% Maui 1992 48,850 52% 38% 10% 1% 1997 54,639 35% 48% 15% 3% 2003 43,687 45% 42% 10% 3% 2006 49,484 44% 43% 11% 2% Hawaii 1992 45,408 52% 41% 6% 1% 1997 54,643 42% 42% 13% 4% 2003 54,644 46% 44% 9% 2% 2006 61,213 44% 44% 11% 1% Kauai 1992* 20,643 49% 42% 7% 2% 1997 24,112 42% 42% 13% 3% 2003 20,460 48% 42% 9% 2% 2006 21,971 44% 43% 11% 2% Total 1992 400,388 49% 42% 8% 2% 1997 442,867 34% 46% 17% 4% 2003 410,795 43% 45% 10% 2% 2006 435,818 41% 45% 12% 3% Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 43 February, 2007 Table A -4b. Housing Unit Condition, Rented Units, by County, 1992, 1997, 2003 and 2006 Percentages may not sum to 100.0 due to rounding. * Pre- Hurricane Iniki Table A -5a: Housing Cost By County, 1992, 1997, 2003 and 2006 Average Monthly Mortgage Payment Renter Occupied Total Housing Excellent Satisfactory Total County Year Units condition condition Fair condition Poor condition Honolulu 1992 285,487 23% 52% 20% 6% $864 1997 309,473 21% 46% 27% 6% $1,335 2003 292,003 22% 52% 22% 4% $1,650 2006 303,149 24% 42% 25% 10% Maui 1992 48,850 27% 43% 24% 6% 34,266 1997 54,639 25% 48% 22% 5% 1997 2003 43,687 28% 47% 20% 6% 2006 49,484 31% 40% 22% 7% Hawaii 1992 45,408 29% 46% 16% 9% $1,256 1997 54,643 26% 45% 20% 10% $579 2003 54,644 27% 46% 23% 5% $1,069 2006 61,213 22% 48% 20% 10% Kauai 1992* 20,643 25% 55% 15% 5% 61,213 1997 24,112 27% 44% 22% 7% 1992* 2003 20,460 30% 47% 18% 5% 2006 21,971 24% 46% 25% 6% Total 1992 400,388 24% 51% 20% 6% $983 1997 442,867 22% 46% 26% 6% $974 2003 410,795 24% 51% 21% 4% $863 2006 435,818 24% 43% 24% 9% Percentages may not sum to 100.0 due to rounding. * Pre- Hurricane Iniki Table A -5a: Housing Cost By County, 1992, 1997, 2003 and 2006 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 44 February. 2007 Average Monthly Mortgage Payment Average Monthly Rent 2- bedroom Total Year Households Total Single- family Multi- family Total apartment Honolulu 1992 247,349 $821 $915 $832 $864 1997 272,234 $1,430 $1,369 $1,335 $928 $923 2003 292,003 $1,546 $1,650 $1,239 $1,014 $1,072 2006 303,149 $1,142 $1,173 $1,029 $1,300 $1,393 Maui 1992 34,266 $776 $831 $719 $730 1997 39,252 $1,210 $1,664 $789 $850 $1,138 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 Hawaii 1992 39,789 $651 $691 $579 $556 1997 46,271 $954 $1,069 $840 $697 $644 2003 54,644 $1,072 $1,078 $919 $859 $843 2006 61,213 $1,057 $1,039 $1,407 $1,146 $1,152 Kauai 1992* 16,981 $726 $773 $612 $807 1997 18,817 $1,151 $1,290 $881 $830 $860 2003 20,460 $1,284 $1,306 $1,014 $983 $885 2006 21,971 $1,165 $1,178 $974 $1,230 $1,271 Total 1992 338,385 $800 $863 $813 $793 1997 376,574 $1,319 $1,330 $1,286 $897 2003 410,794 $1,433 $1,488 $1,213 $992 $1,037 2006 435,818 $1,167 $1,183 $1,081 $1,274 $1,346 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 44 February. 2007 Table A5b: Mortgage Payments by Years in Unit By County, 1992, 1997, 2003 and 2006 Pre- Hurricane Iniki Average monthly rents for 2003 taken from the Housing Inventory Study, 2003. See Section III. Table A -6a. Household Composition and Crowding By County, 1992, 1997, 2003 and 2006 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 45 February, 2007 Average Monthly Mortgage by Years in Unit Less than 1 More than 10 Total Year Households year 1 to 5 years 6 to 10 years years Honolulu 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 2006 303,149 $2,865 $1,865 $1,445 $824 Maui 1992 34,266 $824 $781 $755 $609 1997 39,252 $1,497 $1,519 $1,339 $986 2003 43,687 $1,972 $1,448 $1,436 $1,091 2006 49,484 $2,245 $2,037 $1,565 $1,072 Hawaii 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 2006 61,213 $1,700 $1,662 $987 $725 Kauai 1992 16,981 $888 $722 $559 $552 1997 18,817 $1,448 $1,304 $1,167 $968 2003 20,460 $1,673 $1,490 $1,373 $1,089 2006 21,971 $2,666 $1,634 $1,442 $824 Total 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 2006 435,818 $2,468 $1,837 $1,378 $835 Pre- Hurricane Iniki Average monthly rents for 2003 taken from the Housing Inventory Study, 2003. See Section III. Table A -6a. Household Composition and Crowding By County, 1992, 1997, 2003 and 2006 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 45 February, 2007 Percentages may not sum to 100.0 due to rounding. a. Pre - Hurricane Iniki b. Data after 1997 weighted by household size, resulting in some difference for single member households. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 46 February, 2007 Household tVpe b Single Married, no Parent(s) Unrelated Multiple Total County Year Households member children & children roommates families Undetermined Honolulu 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% 2006 303,149 24.1% 21.8% 20.9% 3.3% 29.3% 0.5% Maui 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% 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% Hawaii 1992 39,789 9.6% 27.2% 32.3% 0.6% 26.0% 4.3% 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% 2006 61,213 19.5% 25.6% 22.6% 2.6% 28.7% 1.0% Kauai 1992a 16,981 12.7% 26.1% 31.0% 0.5% 26.3% 3.5% 1997 18,817 13.2% 27.1% 30.0% 1.7% 25.4% 2.5% 2003 20,460 20.9% 26.9% 26.8% 3.2% 20.5% 1.7% 2006 21,971 19.8% 25.0% 23.3% 3.3% 28.2% 0.4% Total 1992 338,385 11.7% 24.9% 27.9% 1.5% 30.3% 3.6% 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% 2006 435,818 22.9% 22.8% 21.6% 3.2% 28.8% 0.6% Percentages may not sum to 100.0 due to rounding. a. Pre - Hurricane Iniki b. Data after 1997 weighted by household size, resulting in some difference for single member households. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 46 February, 2007 Table A -6b. Household Composition and Crowding By County, 1992, 1997, 2003 and 2006 a. Pre - Hurricane Iniki b. Data weighed by household size after 2003. c. Not a standard crowding measure. Applicable to data with known bedrooms, unknown number of rooms. d. Based on 1.01 persons or more per room or multiple families in one household. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 47 February, 2007 Crowding Indicatorsb Percent overcrowded Percent overcrowded Percent of households Total (1.01 persons or more (1.01 persons or more that are overcrowed or County Year Households per room) per bedroom`) doubled u d Honolulu 1992 247,349 23% 32% 1997 272,234 11% 27% 2003 292,003 10% 23% 2006 303,149 8% 35% 15% Maui 1992 34,266 27% 26% 1997 39,252 10% 25% 2003 43,687 11% 18% 2006 49,484 8% 36% 15% Hawaii 1992 39,789 19% 26% 1997 46,271 8% 24% 2003 54,644 7% 18% 2006 61,213 7% 34% 16% Kauai 1992a 16,981 17% 26% 1997 18,817 9% 25% 2003 20,460 6% 21% 2006 21,971 7% 35% 16% Total 1992 338,385 22% 30% 1997 376,574 10% 27% 2003 410,794 10% 22% 2006 435,818 8% 35% 15% a. Pre - Hurricane Iniki b. Data weighed by household size after 2003. c. Not a standard crowding measure. Applicable to data with known bedrooms, unknown number of rooms. d. Based on 1.01 persons or more per room or multiple families in one household. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 47 February, 2007 Table A -7a. Shelter -to- Income Ratios, 1992, 1997, 2003 and 2006 Includes both rent and mortgage payments. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 48 February, 2007 Monthly Shelter Payment as a Percent of Monthly Household Income Under 30 30 to 40 Over 40 Not enough Total County Year Households percent percent percent information Honolulu 1992 247,349 55.7% 14.1% 20.2% 10.0% 1997 272,234 55.1% 18.9% 18.4% 7.5% 2003 292,003 55.7% 18.5% 18.0% 7.8% 2006 303,149 54.8% 10.9% 22.0% 12.0% Maui 1992 34,266 59.3% 18.1% 15.8% 6.7% 1997 39,252 47.9% 16.0% 19.8% 16.4% 2003 43,687 52.2% 18.3% 15.7% 15.9% 2006 49,484 49.1% 14.3% 27.1% 9.4% Hawaii 1992 39,789 70.2% 12.4% 11.5% 5.9% 1997 46,271 51.8% 18.1% 20.4% 9.7% 2003 54,644 52.5% 19.1% 15.9% 12.4% 2006 61,213 54.9% 11.1% 22.0% 12.0% Kauai 1992* 16,981 60.3% 17.7% 13.7% 8.1% 1997 18,817 44.9% 18.7% 24.7% 11.7% 2003 20,460 51.8% 16.8% 18.0% 13.3% 2006 21,971 57.6% 10.8% 21.6% 10.0% Total 1992 338,385 58.0% 14.5% 18.4% 9.1% 1997 376,574 53.5% 18.5% 19.1% 8.9% 2003 410,794 54.7% 18.5% 17.5% 9.5% 2006 435,818 54.2% 11.3% 22.7% 11.8% Includes both rent and mortgage payments. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 48 February, 2007 Table A -7b. Shelter -to- Income Ratios by Years in Unit, 1992, 1997, 2003 and 2006 Includes both rent and mortgage payments. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 49 February, 2007 Percent with shelter -to- income ratio of 30% or more by years of occupancy by tenancy Less than 6 to 10 More than 10 Rented or Owner Total County Year Households 1 year 1 to 5 years years years no cash occupied Honolulu 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% 2006 303,149 53.0% 43.1% 36.9% 22.1% 47.2% 22.7% Maui 1992 34,266 47.3% 49.8% 30.6% 17.0% 43.8% 27.6% 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% 2006 49,484 66.3% 46.8% 44.8% 26.3% 54.6% 32.6% Hawaii 1992 39,789 51.5% 35.8% 18.5% 6.7% 37.8% 17.2% 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% 2006 61,213 60.8% 43.7% 27.5% 20.3% 48.3% 27.1% Kauai 1992* 16,981 46.3% 31.1% 18.5% 15.6% 36.9% 28.1% 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% 2006 21,971 51.6% 45.2% 37.1% 18.8% 47.7% 24.3% Total 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% 2003 410,794 43.6% 46.2% 35.3% 25.3% 28.3% 28.3% 2006 435,818 56.4% 43.8% 36.7% 22.1% 48.2% 24.6% Includes both rent and mortgage payments. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 49 February, 2007 Table A -8a. Intention to Move By County, 1992, 1997, 2003 and 2006 Note: Percentages may not sum to 100.0 due to rounding. * Pre - Hurricane Ink Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 50 February. 2007 Intention to Move When Household Will Move Probably Will move more Total will not to a new Total will in one I in two 3 to 5 than 5 not sure County Year Households move unit move year years years years when Honolulu 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% 2006 303,149 61.2% 38.8% 117,597 24.5% 22.9% 15.5% 8.2% 29.0% Maui 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 58.3% 48.1% 18,205 22.1% 20.6% 18.6% 10.0% 28.7% 2006 49,484 54.9% 45.1% 22,318 19.6% 26.9% 15.0% 14.0% 24.5% Hawaii 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 61.1% 44.4% 21,252 21.4% 19.2% 15.9% 17.3% 26.2% 2006 61,213 57.9% 42.1% 25,7691 22.4% 19.3% 19.4% 11.2% 27.7% Kauai 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% 2006 21,971 64.4% 35.6% 7,826 23.4% 17.5% 13.6% 17.1% 28.4% Total 1992 338,385 46.2% 53.8% 181,904 29.2% 21.5% 18.8% 10.4% 20.1% 1997 376,574 48.1% 51.9% 195,485 23.1% 20.0% 15.9% 12.3% 28.8% 2003 410,794 57.5% 42.5% 174,607 26.3% 20.5% 18.6% 11.2% 23.5% 2006 1 435,818 60.2% 39.8% 173,511 1 23.5% 22.6% 15.9% 9.8% 28.2% Note: Percentages may not sum to 100.0 due to rounding. * Pre - Hurricane Ink Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 50 February. 2007 Table A -8b. Preferred Location for Next Move By County, 1992, 1997, 2003 and 2006 Note: Percentages may not sum to 100.0 due to rounding. * Pre - Hurricane Iniki Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 51 February, 2007 Preferred Location for Next Move Total Total will Same Different out -of- Year Households move Island I island state not sure Honolulu 1992 247,349 142,090 62.2% 5.3% 26.1% 6.3% 1997 272,234 150,194 52.5% 4.3% 32.2% 11.0% 2003 292,003 127,683 65.7% 2.8% 19.8% 11.6% 2006 303,149 117,5971 66.1% 4.5% 20.5% 8.9% Maui 1992 34,266 14,793 71.7% 13.3% 9.4% 5.7% 1997 39,252 18,894 72.5% 2.7% 11.8% 13.0% 2003 43,687 18,205 68.3% 6.9% 14.0% 10.8% 2006 49,484 22,318 71.5% 9.5% 12.3% 6.7% Hawaii 1992 39,789 17,685 80.9% 4.2% 10.6% 4.4% 1997 46,271 18,491 74.3% 4.0% 14.0% 7.7% 2003 54,644 21,252 73.4% 5.4% 9.1% 12.1% 2006 61,213 25,769 73.0% 6.0% 11.5% 9.4% Kauai 1992* 16,981 7,337 76.7% 6.2% 11.1% 6.0% 1997 18,817 7,907 69.8% 5.7% 14.3% 10.1% 2003 20,460 7,468 71.8% 9.7% 9.5% 9.0% 2006 21,971 7,826 64.8% 7.4% 18.7% 9.1% Total 1992 338,385 181,904 65.4% 5.9% 22.6% 6.1% 1997 376,574 195,485 57.2% 4.2% 27.8% 10.9% 2003 410,794 174,607 67.2% 3.9% 17.5% 11.5% 2006 435,818 173,511 67.8% 5.5% 18.0% 8.7% Note: Percentages may not sum to 100.0 due to rounding. * Pre - Hurricane Iniki Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 51 February, 2007 Table A -9. Tenancy Preference of Current Owners & Renters, 1992, 1997, 2003 and 2006 Note: Percentages may not sum to 100.0 due to rounding. a. Includes renters who pay no cash rent. b. Differs from Table A -9 by exclusion of about 50 percent of "not sure" category to account for those who said they would like to move but did not supply any preferecens for unit type, number bedrooms, etc. c. Eg.: the percent of current homeowners who would like to move to a different owned unit. d. Pre - Hurricane Iniki. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 52 February, 2007 Total Current Owners Current Rentersa Will Preferred Tenancy Preferred Tenancy County Year Move b Total Ow Rent Rent Total Own Rent Honolulu 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% 2006 100,545 30,973 86.8% 13.2% 69,572 55.4% 44.6% Maui 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% 2006 19,584 7,083 92.0% 8.0% 12,501 52.3% 47.7% Hawaii 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% 2006 22,200 10,264 93.8% 6.2% 11,936 54.7% 45.3% Kauai 1992d 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% 2006 6,715 2,614 87.6% 12.4% 4,101 39.3% 60.7% Total 1992 163,664 47,239 90.4% 9.6% 116,425 37.2% 62.8% 1997 167,343 60,533 88.6% 11.4%1 106,810 44.9% 55.1% 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% Note: Percentages may not sum to 100.0 due to rounding. a. Includes renters who pay no cash rent. b. Differs from Table A -9 by exclusion of about 50 percent of "not sure" category to account for those who said they would like to move but did not supply any preferecens for unit type, number bedrooms, etc. c. Eg.: the percent of current homeowners who would like to move to a different owned unit. d. Pre - Hurricane Iniki. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 52 February, 2007 Table A -10. Preferences of Buyers and Renters Statewide, 1992, 1997, 2003 and 2006 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 53 February, 2007 Preferred Unit Type Total Will Single town no Treference County Year Move Family I House Condo Apartment other Honolulu 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% 2006 65,495 69.7% 7.5% 12.7% 1.0% 1.3% 8.6% P Maui 1992 8,328 89.7% 2.5% 5.3% 0.6% 1.9% 0.0% r 1997 10,051 87.1% 2.2% 8.0% 0.8% 0.0% 1.9% e 2003 10,586 85.0% 1.2% 7.4% 1.6% 0.1% 4.7% f 2006 12,539 85.6% 2.7% 7.6% 0.0% 0.4% 3.7% e Hawaii 1992 12,441 91.8% 3.3% 2.2% 1.0% 0.8% 0.9% r 1997 10,794 91.7% 1.9% 4.8% 0.2% 0.2% 1.1% 2003 13,402 91.4% 1.8% 2.1% 0.5% 0.2% 4.0% t 0 2006 15,940 84.2% 4.4% 4.9% 0.0% 2.1% 4.4% Kauai 1992 4,513 95.1% 1.1% 2.9% 0.0% 0.0% 0.9% 0 1997 4,016 91.0% 4.1% 4.9% 0.0% 0.0% 0.0% W 2003 4,381 86.9% 3.8% 5.8% 0.0% 1.7% 1.8% n 2006 3,879 79.0% 5.3% 8.2% 0.0% 1.3% 6.1% Total 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% 2003 103,851 81.3% 4.3% 6.2% 1.5% 1.0% 5.7% 2006 97,853 74.5% 6.3% 10.6% 1.0% 1.3% 7.2% P Honolulu 1992 67,086 64.3% 3.9% 12.5% 13.6% 0.6% 5.1% r 1997 52,128 50.8% 8.3% 11.4% 19.3% 1.1% 9.1% e 2003 38,156 56.0% 9.1% 4.1% 21.1% 2.9% 6.8% t 2006 40,585 41.3% 10.7% 8.3% 28.8% 2.8% 8.2% r Maui 1992 4,956 82.1% 3.8% 6.3% 4.1% 3.7% 0.0% 1997 6,188 60.3% 3.9% 14.0% 17.6% 2.0% 2.2% t 2003 5,007 77.9% 6.7% 4.7% 7.2% 1.8% 1.7% O 2006 7,265 65.1% 0.8% 11.4% 14.1% 0.5% 8.0% Hawaii 1992 3,563 80.1% 5.4% 4.7% 4.7% 0.0% 5.1% 1997 5,090 65.3% 4.1% 4.7% 16.4% 3.4% 6.1% e e 2003 5,069 69.9% 1.3% 5.0% 18.1% 3.4% 2.3% n t 2006 7,659 61.6% 4.5% 7.7% 15.8% 5.4% 5.0% Kauai 1992 2,017 84.4% 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% r 2003 2,045 77.3% 0.0% 1.7% 12.9% 0.0% 8.1% 0 2006 3,177 64.4% 2.0% 9.8% 10.9% 5.7% 7.1% t Total 1992 77,622 66.7% 4.0% 11.6% 12.3% 0.8% 4.6% h 1997 65,818 53.9% 7.3% 10.8% 18.4% 1.4% 8.2% e 2003 50,277 60.4% 7.7% 4.2% 19.1% 2.7% 5.9% r 2006 58,686 48.1% 8.2% 8.7% 24.3% 3.0% 7.7% Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 53 February, 2007 Table A -11. Preferred Number of Bedrooms for Buyers and Renters, 1992, 1997, 2003 and 2006 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 54 February. 2007 Preferred Number of Bedrooms Total Will studio or four or no County Year Move one two three more preference Honolulu 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% p 1 2006 65,495 0.1% 15.1% 41.6% 39.0% 4.2% r Maui 1992 8,328 0.4% 27.5% 56.9% 15.2% 0.0% 1997 10,051 6.4% 19.7% 44.5% 28.1% 1.2% e f 2003 10,586 4.1% 21.8% 37.7% 36.0% 0.4% e 2006 12,539 1.7% 19.9% 46.0% 31.7% 0.7% Hawaii 1992 12,441 1.1% 25.4% 55.9% 17.3% 0.3% r 1997 10,794 6.2% 22.7% 40.3% 29.0% 1.7% 2003 13,402 4.0% 18.4% 45.9% 31.7% 0.0% t 2006 15,940 3.1% 17.1% 41.2% 35.4% 3.3% Kauai 1992* 4,513 0.7% 29.3% 48.3% 21.7% 0.0% 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% W 2006 3,879 0.8% 18.5% 46.3% 34.1% 0.3% n Total 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% 2003 103,851 4.0% 21.6% 45.2% 28.0% 1.2% 2006 97,853 0.8% 16.2% 42.3% 37.3% 3.5% P Honolulu 1992 67,086 15.2% 40.0% 35.3% 9.5% 0.0% r 1997 52,128 7.3% 40.2% 32.4% 19.7% 0.4% e 2003 38,156 17.7% 40.6% 28.0% 12.4% 1.3% t 2006 40,585 11.8% 35.1% 33.4% 16.3% 3.5% r Maui 1992 4,956 6.4% 41.0% 49.0% 1.0% 2.6% 1997 6,188 17.9% 34.3% 34.8% 12.7% 0.2% t 2003 5,007 9.1% 37.4% 34.0% 18.1% 1.4% 0 2006 7,265 7.5% 43.7% 35.9% 11.9% 1.0% Hawaii 1992 3,563 5.1% 43.9% 38.7% 12.3% 0.0% 1997 5,090 10.7% 31.7% 40.1% 16.8% 0.6% e e 2003 5,069 18.0% 35.9% 37.5% 8.6% 0.0% n t 2006 7,659 9.3% 31.6% 41.2% 16.6% 1.3% Kauai 1992* 2,017 0.8% 38.1% 47.8% 13.3% 0.0% 0 1997 2,412 4.6% 14.7% 63.8% 14.3% 2.6% r 2003 2,045 17.8% 23.7% 44.3% 11.7% 2.5% 0 2006 3,177 7.3% 33.3% 41.7% 17.1% 0.5% t Total 1992 77,622 13.8% 40.2% 36.6% 9.2% 0.2% h 1997 65,818 8.5% 38.0% 34.4% 18.6% 0.5% e 2003 50,277 17.7% 40.6% 28.0% 12.4% 1.3% r 2006 58,686 10.7% 35.6% 35.1% 15.8% 2.7% Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 54 February. 2007 Table A -12. Preferred Location of New Housing Unit, 2006 Percentages do not add to 100% because multiple responses were allowed. This table combines respondents' first, second, and third choices for preferred location of their next unit. Table includes both preferred owners and preferred renters. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 55 February, 2007 County of Residence Honolulu Hawaii Kauai Maui Group Total Count Pct. Count Pct. Count Pct. Count Pct. Count Pct. HONOLULU PUC 67,328 67.0% 890 4.0% 250 3.7% 329 1.7% 68,798 46.2% Central Oahu 48,082 47.8% 867 3.9% 158 2.4% 213 1.1% 49,320 33.1% East Honolulu 8,491 8.4% 202 0.9% 22 0.3% 22 0.1% 8,737 5.9% Windward Oahu 31,022 30.9% 604 2.7% 46 0.7% 107 0.5% 31,778 21.3% Leeward Oahu 14,343 14.3% 283 1.3% 58 0.9% 107 0.5% 14,791 9.9% Oahu, any 1,616 1.6% 448 2.0% 190 2.8% 177 0.9% 2,431 1.6% HAWAII South Kona -Kau 460 0.5% 1,034 4.7% 99 1.5% 21 0.1% 1,614 1.1% Puna 703 0.7% 3,444 15.5% 38 0.6% 60 0.3% 4,245 2.8% North & South Hilo 603 0.6% 8,843 39.8% 70 1.0% 358 1.8% 9,874 6.6% North Hawaii 1,893 1.9% 9,189 41.4% 45 0.7% 111 0.6% 11,238 7.5% North Kona 70 0.1% 7,072 31.9% 12 0.2% 32 0.2% 7,186 4.8% Hawaii island, any 1,316 1.3% 1,045 4.7% 150 2.2% 531 2.7% 3,042 2.0% MAUI Hana 130 0.1% 304 4.5% 689 3.5% 1,123 0.8% Makawao - Pukalani -Kula 484 0.5% 138 2.1% 9,273 47.4% 9,896 6.6% Wailuku - Kahului 183 0.2% 20 0.3% 6,197 31.6% 6,400 4.3% Paia -Haiku 1,209 1.2% 17 0.3% 2,399 12.2% 3,625 2.4% Kihei - Makena 112 0.5% 5,516 28.2% 5,628 3.8% West Maui 204 0.9% 11 0.2% 4,442 22.7% 4,657 3.1% Molokai 148 0.7% 38 0.6% 1,085 5.5% 1,271 0.9% Lanai 95 0.4% 12 0.2% 312 1.6% 419 0.3% Maui, any 594 0.6% 408 1.8% 160 2.4% 1,274 6.5% 2,435 1.6% KAUAI Waimea 941 14.0% 941 0.6% Koloa 55 0.2% 1,772 26.4% 6 0.0% 1,834 1.2% Lihue 91 0.4% 2,360 35.1% 2,451 1.6% Kawaihau 329 0.3% 63 0.3% 1,750 26.1% 9 0.0% 2,151 1.4% Hanalei 136 0.1% 123 0.6% 1,859 27.7% 2,118 1.4% Kauai, any 682 0.7% 457 2.1% 546 8.1% 79 0.4% 1,764 1.2% Total no preference 7,037 7.0% 1,584 7.1% 750 11.2% 1,612 8.2% 10,983 7.4% Total will move 100,545 100% 22,200 100.0% 6,715 100.0% 19,584 100.0% 149,044 100.0% Percentages do not add to 100% because multiple responses were allowed. This table combines respondents' first, second, and third choices for preferred location of their next unit. Table includes both preferred owners and preferred renters. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 55 February, 2007 Table A -13. Affordable Housing Cost for New Units, 1992, 1997, 2003 and 2006 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 56 February, 2007 Affordable monthly housing cost* Less More Median Total Will than $200 to $500 to $800 to $1,100 to $1,400 to $1,700 to $2,000 to than Monthly Count Year Move $200 $499 $799 $1,099 $1,399 $1,699 $2,000 $3,000 $3,000 Payment Honolulu 1992 60,724 0.9% 1.1% 14.7% 29.9% 10.7% 22.0% 7.7% 5.9% 7.2% $ 1,197 1997 76,663 0.0% 0.6% 9.3% 21.7% 18.4% 20.7% 11.6% 14.2% 3.4% $ 1,398 2003 75,482 2.4% 1.3% 4.5% 14.1% 15.5% 17.3% 19.4% 19.1% 6.5% $ 1,612 p 2006 65,495 1.8% 3.9% 6.7% 9.3% 9.2% 12.0% 6.0% 21.5% 13.3% $ 1,674 Maui 1992 8,328 3.1% 5.5% 36.5% 23.6% 12.7% 8.4% 4.7% 4.0% 1.5% $ 862 r 1997 10,051 1.1% 6.2% 20.5% 30.8% 13.5% 14.6% 5.4% 6.3% 1.6% $ 1,016 e f 2003 10,586 1.8% 5.9% 11.9% 26.8% 13.4% 12.7% 9.6% 12.1% 5.8% $ 1,181 e 2006 12,539 2.0% 2.5% 4.3% 7.9% 9.3% 13.8% 8.7% 28.8% 12.4% $ 1,874 Hawaii 1992 12,441 0.9% 3.4% 17.6% 31.0% 22.8% 11.3% 4.9% 5.0% 3.2% $ 1,072 r 1997 10,794 0.9% 3.1% 9.6% 25.0% 12.6% 26.0% 9.6% 10.7% 2.5% $ 1,371 2003 13,402 1.3% 1.7% 7.2% 16.9% 15.2% 15.6% 20.5% 13.8% 7.9% $ 1,550 t 2006 15,940 1.4% 3.2% 6.3% 17.8% 8.2% 12.8% 2.3% 18.6% 10.7% $ 1,488 Kauai 1992` 4,513 0.0% 1.6% 14.5% 31.3% 23.6% 14.7% 8.5% 4.6% 1.2% $ 1,133 1997 4,016 1.0% 4.5% 13.1% 28.0% 17.2% 16.6% 9.6% 7.5% 2.4% $ 1,159 O 2003 4,381 1.5% 1.2% 5.7% 21.3% 15.8% 22.3% 14.4% 12.6% 5.2% $ 1,461 W 2006 3,879 1.4% 2.4% 3.6% 12.9% 12.4% 12.9% 5.4% 20.1% 13.5% $ 1,623 n Total 1992 86,006 1.0% 1.9% 17.2% 29.5% 13.4% 18.7% 7.0% 5.5% 5.7% $ 1,108 1997 101,524 0.3% 1.6% 10.6% 23.2% 17.3% 20.5% 10.7% 12.8% 3.1% $ 1,349 2003 103,851 2.1% 1.8% 5.6% 16.0% 15.3% 16.8% 18.3% 17.4% 6.5% $ 1,562 2006 97,853 1.8% 3.5% 6.2% 10.5% 9.2% 12.4% 5.8% 21.9% 12.8% 1 $ 1,663 P Honolulu 1992 67,086 1.5% 2.8% 29.6% 35.1% 16.3% 9.6% 2.8% 2.3% 0.0% $ 938 r 1997 52,128 2.0% 7.5% 26.1% 31.6% 16.7% 10.6% 3.1% 2.4% 0.0% $ 937 e 2003 38,156 4.4% 10.2% 19.0% 24.9% 11.4% 11.4% 10.3% 5.2% 3.2% $ 997 t 2006 40,585 0.0% 7.8% 13.6% 21.1% 13.3% 9.5% 8.8% 6.7% 5.0% $ 1,109 r Maui 1992 4,956 0.9% 7.6% 53.2% 29.2% 6.8% 2.2% 0.2% 0.0% 0.0% $ 734 1997 6,188 4.6% 18.7% 41.7% 21.8% 5.1% 4.5% 1.8% 1.9% 0.0% $ 692 t 2003 5,007 8.0% 11.0% 38.6% 22.2% 9.0% 8.0% 0.0% 1.7% 1.5% $ 741 0 2006 7,265 0.0% 10.2% 12.9% 19.9% 12.5% 17.3% 5.2% 9.1% 3.6% $ 1,156 Hawaii 1992 3,563 0.1% 6.6% 23.8% 32.4% 25.2% 9.7% 1.0% 1.0% 0.0% $ 980 R 1997 5,090 6.0% 15.5% 26.5% 31.6% 15.3% 2.9% 0.6% 1.7% 0.0% $ 819 n 2003 5,069 7.8% 5.3% 17.7% 33.2% 10.0% 11.2% 3.8% 11.0% 0.0% $ 974 t 2006 7,659 0.0% 18.3% 16.5% 19.1% 10.7% 9.9% 5.8% 8.6% 1.6% $ 964 Kauai 1992` 2,017 1.0% 8.2% 30.3% 21.4% 22.2% 17.0% 0.0% 0.0% 0.0% $ 948 0 1997 2,412 6.7% 16.2% 43.0% 24.3% 4.4% 3.7% 1.8% 0.0% 0.0% $ 689 r 2003 2,045 4.2% 2.2% 13.8% 34.9% 15.7% 15.0% 2.5% 11.7% 0.0% $ 1,056 0 2006 3,177 0.0% 9.1% 5.2% 17.7% 15.3% 25.0% 4.5% 7.1% 4.9% $ 1,343 t Total 1992 77,622 1.4% 3.4% 30.8% 34.2% 16.3% 9.3% 2.5% 2.0% 0.0% $ 926 h 1997 65,818 2.7% 9.5% 28.2% 30.4% 15.0% 9.2% 2.7% 2.2% 0.0% $ 895 e 2003 50,277 5.1% 9.5% 20.6% 25.9% 11.2% 11.2% 8.3% 5.7% 2.6% $ 972 r 2006 58,686 0.0% 9.5% 13.4% 20.5% 13.0% 11.4% 7.8% 7.2% 4.4% $ 1,105 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 56 February, 2007 Table B -1. 2006 Housing Demand Characteristics, by County (Honolulu) Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 57 February, 2007 Demand for Housing Units, 2006 want to bu want to rent want to other not sure Grou Total Count Col % Count C01 % Count Col % Count C o, % Count Col Preferred Unit Type (Adj.) single family 38,771 66.0 12,665 44.1 2,393 65.1 53,830 53.2 condominium 3,598 6.1 3,905 13.6 7,504 7.4 apartment 8,171 13.9 3,131 10.9 367 10.0 11,669 11.5 other 1,713 2.9 5,334 18.6 789 21.5 7,836 7.7 no preference 6,483 11.0 3,683 12.8 129 3.5 9,989 100.0 20,285 20.1 Total 58,737 100.0 28,718 100.0 3,679 100.0 9,989 100.0 101,123 100.0 Prefer Lease or Fee Simple? 1 Leasehold 2,278 3.9 1,515 5.4 3,792 4.2 2 Fee simple 48,656 82.8 21,039 75.2 1,195 40.2 70,889 79.0 3 can't afford either 4,162 7.1 186 0.7 732 24.6 5,080 5.7 9 no preference 3,641 6.2 5,254 18.8 1,049 35.2 9,945 11.1 Total 58,737 100.0 27,994 100.0 2,976 100.0 89,707 100.0 Willing to take a condo if SFD too expensive? 1 Yes 20,033 51.7 7,398 58.4 1,919 77.6 29,349 54.4 2 No 16,407 42.3 3,521 27.8 19,929 37.0 9 not sure, depends 2,331 6.0 1,746 13.8 555 22.4 4,632 8.6 Total 38,771 100.0 12,665 100.0 2,473 100.0 53,910 100.0 What is the smallest number of bedrooms you can live with 0 None - studio 6,608 11.2 9,948 34.6 1,223 33.2 17,779 17.6 1 one 26,636 45.3 9,238 32.2 1,319 35.9 37,194 36.8 2two 19,344 32.9 8,838 30.8 965 26.2 29,146 28.8 3three 4,575 7.8 405 1.4 4,979 4.9 4 four 577 1.0 17 0.1 594 0.6 7 no response 998 1.7 272 0.9 172 4.7 9,989 100.0 11,431 11.3 Total 58,737 100.0 28,718 100.0 3,679 100.0 9,989 100.0 101,123 100.0 What is the smallest number of bathrooms you can live with one or one and a half 31,413 53.5 22,289 77.6 2,412 65.6 56,115 55.5 two 22,036 37.5 5,003 17.4 1,094 29.7 28,133 27.8 two and a half 2,514 4.3 1,119 3.9 3,634 3.6 three 2,082 3.5 35 0.1 2,117 2.1 four or more 576 1.0 576 0.6 7 no response 116 0.2 272 0.9 172 4.7 9,989 100.0 10,549 10.4 Total 58,737 100.0 28,718 100.0 3,679 100.0 9,989 100.0 101,123 100.0 What is the smallest size home you would be willing to live in Please give your answer in terms of square feet. about 800 sq. ft. 4,159 7.1 4,029 14.0 815 22.2 9,003 8.9 800 to 999 sq. ft 3,356 5.7 4,214 14.7 274 7.5 7,844 7.8 1, 000 to 1, 199 sq. ft. 13,351 22.7 5,159 18.0 893 24.3 19,404 19.2 1,200 to 1,499 sq. ft 9,955 16.9 2,410 8.4 307 8.3 12,672 12.5 1,500 to 1,999 sq. ft. 8,076 13.7 2,640 9.2 10,715 10.6 2,000 sq. ft. or more 9,509 16.2 2,340 8.1 118 3.2 11,968 11.8 not sure 10,331 17.6 7,926 27.6 1,271 34.5 9,989 100.0 29,517 29.2 Total 58,737 100.0 28,718 100.0 3,679 100.0 9,989 100.0 101,123 100.0 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 57 February, 2007 Table B -2. 2006 Housing Qualifiers, by County (Maui) Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 58 February, 2007 Demand for Housing Units, 2006 want to bu want to rent want to other not sure Grou Total Count Col % Count C01 % Count Col % Count C o, % Count Col Preferred Unit Type (Adj.) single family 8,979 83.2 4,363 69.4 725 77.2 107 4.5 14,174 69.5 condominium 309 2.9 65 1.0 9 0.9 383 1.9 apartment 858 7.9 763 12.1 41 4.4 1,662 8.1 other 220 2.0 627 10.0 133 14.2 980 4.8 no preference 423 3.9 467 7.4 31 3.3 2,283 95.5 3,204 15.7 Total 10,789 100.0 6,285 100.0 939 100.0 2,390 100.0 20,402 100.0 Prefer Lease or Fee Simple? 1 Leasehold 737 6.8 557 9.0 115 12.3 1,409 7.8 2 Fee simple 8,546 79.2 4,305 69.2 387 41.6 103 96.0 13,341 73.9 3 can't afford either 583 5.4 246 4.0 258 27.7 1,087 6.0 9 no preference 923 8.6 1,117 17.9 172 18.4 4 4.0 2,216 12.3 Total 10,789 100.0 6,225 100.0 932 100.0 107 100.0 18,052 100.0 Willing to take a condo if SFD too expensive? 1 Yes 3,945 43.9 3,023 69.3 449 59.4 47 44.1 7,465 52.5 2 No 4,828 53.8 1,254 28.7 299 39.6 56 51.9 6,436 45.3 9 not sure, depends 207 2.3 86 2.0 8 1.0 4 4.0 305 2.1 Total 8,979 100.0 4,363 100.0 756 100.0 107 100.0 14,205 100.0 What is the smallest number of bedrooms you can live with 0 None - studio 1,711 15.9 1,389 22.1 316 33.7 4 0.2 3,420 16.8 1 one 4,764 44.2 4,060 64.6 363 38.7 103 4.3 9,290 45.5 2 two 3,807 35.3 645 10.3 109 11.6 4,561 22.4 3 three 354 3.3 137 2.2 138 14.7 629 3.1 4 four 153 1.4 153 0.8 7 no response 54 0.9 13 1.4 2,283 95.5 2,349 11.5 Total 10,789 100.0 6,285 100.0 939 100.0 2,390 100.0 20,402 100.0 What is the smallest number of bathrooms you can live with one or one and a half 5,806 53.8 4,858 77.3 777 82.7 107 4.5 11,548 56.6 two 4,651 43.1 1,420 22.6 151 16.0 6,221 30.5 two and a half 165 1.5 165 0.8 three 83 0.8 7 0.1 5 0.5 95 0.5 four or more 84 0.8 84 0.4 7 no response 6 0.7 2,283 95.5 2,289 11.2 Total 10,789 100.0 6,285 100.0 939 100.0 2,390 100.0 20,402 100.0 What is the smallest size home you would be willing to live in Please give your answer in terms of square feet. about 800 sq. ft. 560 5.2 1,114 17.7 299 31.8 47 2.0 2,019 9.9 800 to 999 sq. ft 1,489 13.8 1,339 21.3 54 5.7 4 0.2 2,886 14.1 1,000 to 1, 199 sq. ft. 2,154 20.0 1,156 18.4 61 6.5 3,370 16.5 1,200 to 1,499 sq. ft 2,192 20.3 924 14.7 393 41.9 56 2.3 3,564 17.5 1,500 to 1,999 sq. ft. 2,217 20.5 372 5.9 106 11.3 2,694 13.2 2,000 sq. ft. or more 1,078 10.0 234 3.7 1,312 6.4 not sure 1,099 10.2 1,148 18.3 26 2.8 2,283 95.5 4,556 22.3 Total 10,789 100.0 6,285 100.0 939 100.0 2,390 100.01 20,402 100.0 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 58 February, 2007 Table B -3. 2006 Housing Qualifiers, by County (Hawaii) Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 59 February, 2007 Demand for Housing Units, 2006 want to bu want to rent want to other not sure Grou Total Count Col % Count C01 % Count Col % Count Col % Count Col Preferred Unit Type (Adj.) single family 11,571 82.1 4,200 66.1 1,119 72.1 16,890 70.5 condominium 552 3.9 236 3.7 187 12.1 976 4.1 apartment 779 5.5 368 5.8 223 14.4 1,370 5.7 other 170 1.2 962 15.1 1,131 4.7 no preference 1,029 7.3 585 9.2 24 1.5 1,969 100.0 3,606 15.0 Total 14,101 100.0 6,351 100.0 1,553 100.0 1,969 100.0 23,975 100.0 Prefer Lease or Fee Simple? 1 Leasehold 736 5.2 498 8.3 1,235 5.7 2 Fee simple 11,398 80.8 3,392 56.5 786 50.6 15,576 71.9 3 can't afford either 327 2.3 131 2.2 704 45.4 1,163 5.4 9 no preference 1,639 11.6 1,985 33.1 63 4.1 3,687 17.0 Total 14,101 100.0 6,006 100.0 1,553 100.0 21,661 100.0 Willing to take a condo if SFD too expensive? 1 Yes 4,353 37.6 2,403 57.2 664 53.1 7,420 43.6 2 No 6,489 56.1 1,473 35.1 557 44.6 8,519 50.0 9 not sure, depends 728 6.3 325 7.7 29 2.4 1,082 6.4 Total 11,571 100.0 4,200 100.0 1,251 100.0 17,022 100.0 What is the smallest number of bedrooms you can live with 0 None - studio 2,019 14.3 2,004 31.6 514 33.1 4,538 18.9 1 one 5,917 42.0 2,898 45.6 826 53.2 9,641 40.2 2 two 5,583 39.6 1,427 22.5 70 4.5 7,080 29.5 3 three 460 3.3 22 0.3 54 3.5 536 2.2 4 four 88 5.7 88 0.4 7 no response 122 0.9 1,969 100.0 2,091 8.7 Total 14,101 100.0 6,351 100.0 1,553 100.0 1,969 100.0 23,975 100.0 What is the smallest number of bathrooms you can live with one or one and a half 6,737 47.8 4,683 73.7 945 60.8 12,365 51.6 two 6,503 46.1 1,613 25.4 300 19.3 8,415 35.1 two and a half 322 2.3 322 1.3 three 487 3.5 55 0.9 110 7.1 652 2.7 four or more 53 0.4 88 5.7 141 0.6 7 no response 111 7.2 1,969 100.0 2,080 8.7 Total 14,101 100.0 6,351 100.0 1,553 100.0 1,969 100.0 23,975 100.0 What is the smallest size home you would be willing to live in Please give your answer in terms of square feet. about 800 sq. ft. 793 5.6 461 7.3 134.0229 8.6 1,389 5.8 800 to 999 sq. ft 1,217 8.6 1,159 18.2 260.8321 16.8 2,636 11.0 1, 000 to 1, 199 sq. ft. 2,416 17.1 1,597 25.2 227.5724 14.7 4,241 17.7 1,200 to 1,499 sq. ft 3,130 22.2 1,247 19.6 405.4141 26.1 4,783 19.9 1,500 to 1,999 sq. ft. 2,781 19.7 672 10.6 29.45399 1.9 3,482 14.5 2,000 sq. ft. or more 1,514 10.7 192 3.0 197.7915 12.7 1,904 7.9 not sure 2,251 16.0 1,022 16.1 298.1753 19.2 1,969 100.0 5,540 23.1 Total 14,101 100.0 6,351 100.0 1553.262 100.0 1,969 100.0 23,975 100.0 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 59 February, 2007 Table B -4. 2006 Housing Qualifiers, by County (Kauai) Note: "Preferred unit type" was self- reported in the Demand Survey. Condominium and apartment units are both multi - family units. Respondent who want to buy and apartment usually prefer condominium units by those who wish to rent. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 60 February. 2007 Demand for Housing Units, 2006 want to bu want to rent want to other not sure Grou Total Count Col % Count C01 % Count Col % Count C o, % Count Col Preferred Unit Type (Adj.) single family 2,539 79.4 1,821 69.0 290 73.9 17 2.4 4,666 67.5 condominium 105 3.3 65 2.4 169 2.5 apartment 222 7.0 250 9.5 13 3.2 485 7.0 other 51 1.6 264 10.0 20 5.2 335 4.8 no preference 279 8.7 241 9.1 69 17.7 667 97.6 1,257 18.2 Total 3,196 100.0 2,641 100.0 392 100.0 684 100.0 6,912 100.0 Prefer Lease or Fee Simple? 1 Leasehold 31 1.0 160 6.2 191 3.1 2 Fee simple 2,772 86.7 1,739 67.0 249 68.8 17 100.0 4,776 77.4 3 can't afford either 144 4.5 17 0.7 113 31.2 274 4.4 9 no preference 249 7.8 679 26.2 928 15.0 Total 3,196 100.0 2,596 100.0 361 100.0 17 100.0 6,169 100.0 Willing to take a condo if SFD too expensive? 1 Yes 1,078 42.5 1,173 64.4 142 48.9 2,393 51.3 2 No 1,287 50.7 519 28.5 102 35.2 17 100.0 1,924 41.2 9 not sure, depends 173 6.8 130 7.1 46 15.9 349 7.5 Total 2,539 100.0 1,821 100.0 290 100.0 17 100.0 4,666 100.0 What is the smallest number of bedrooms you can live with 0 None - studio 436 13.6 817 30.9 158 40.4 1,410 20.4 1 one 1,115 34.9 1,162 44.0 170 43.4 2,447 35.4 2 two 1,376 43.0 635 24.1 64 16.3 8 1.2 2,083 30.1 3 three 262 8.2 9 0.4 8 1.2 279 4.0 4 four 8 0.3 8 0.1 7 no response 17 0.7 667 97.6 685 9.9 Total 3,196 100.0 2,641 100.0 392 100.0 684 100.0 6,912 100.0 What is the smallest number of bathrooms you can live with one or one and a half 1,430 44.8 1,898 71.9 172 43.8 3,500 50.6 two 1,516 47.4 661 25.0 221 56.2 8 1.2 2,406 34.8 two and a half 41 1.3 41 0.6 three 144 4.5 72 2.7 8 1.2 224 3.2 four or more 36 1.1 9 0.4 46 0.7 7 no response 28 0.9 667 97.6 696 10.1 Total 3,196 100.0 2,641 100.0 392 100.0 684 100.0 6,912 100.0 What is the smallest size home you would be willing to live in Please give your answer in terms of square feet. about 800 sq. ft. 267 8.3 398 15.1 153 39.1 818 11.8 800 to 999 sq. ft 301 9.4 352 13.3 12 3.1 8 1.2 673 9.7 1, 000 to 1, 199 sq. ft. 675 21.1 400 15.2 1,076 15.6 1,200 to 1,499 sq. ft 451 14.1 510 19.3 91 23.2 1,053 15.2 1,500 to 1,999 sq. ft. 563 17.6 141 5.3 54 13.8 758 11.0 2,000 sq. ft. or more 649 20.3 256 9.7 36 9.1 8 1.2 949 13.7 not sure 290 9.1 583 22.1 46 11.8 667 97.6 1,587 23.0 Total 3,196 100.0 2,641 100.01 392 100.0 684 100.0 6,912 100.0 Note: "Preferred unit type" was self- reported in the Demand Survey. Condominium and apartment units are both multi - family units. Respondent who want to buy and apartment usually prefer condominium units by those who wish to rent. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 60 February. 2007 Table B -5. 2006 Housing Qualifiers, by County (State of Hawaii) Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 61 February, 2007 Demand for Housing Units, 2006 want to bu want to rent want to other not sure Grou Total Count Col % Count C01 % Count Col % Count C o, % Count Col Preferred Unit Type (Adj.) single family 61,860 71.2 23,049 52.4 4,527 69.0 123 0.8 89,560 58.8 condominium 4,564 5.3 4,272 9.7 196 3.0 9,032 5.9 apartment 10,030 11.6 4,512 10.3 644 9.8 15,186 10.0 other 2,153 2.5 7,186 16.3 943 14.4 10,283 6.7 no preference 8,214 9.5 4,976 11.3 252 3.8 14,909 99.2 28,351 18.6 Total 86,822 100.0 43,995 100.0 6,563 100.0 15,032 100.0 152,412 100.0 Prefer Lease or Fee Simple? 1 Leasehold 3,782 4.4 2,730 6.4 115 2.0 6,627 4.9 2 Fee simple 71,372 82.2 30,474 71.2 2,617 44.9 119 96.6 104,582 77.1 3 can't afford either 5,216 6.0 581 1.4 1,807 31.0 7,604 5.6 9 no preference 6,452 7.4 9,036 21.1 1,284 22.1 4 3.4 16,776 12.4 Total 86,822 100.0 42,821 100.0 5,823 100.0 123 100.0 135,589 100.0 Willing to take a condo if SFD too expensive? 1 Yes 29,410 47.5 13,997 60.7 3,174 66.5 47 38.2 46,627 51.9 2 No 29,011 46.9 6,766 29.4 959 20.1 72 58.4 36,808 41.0 9 not sure, depends 3,439 5.6 2,286 9.9 638 13.4 4 3.4 6,368 7.1 Total 61,860 100.0 23,049 100.0 4,770 100.0 123 100.0 89,803 100.0 What is the smallest number of bedrooms you can live with 0 None - studio 10,773 12.4 14,158 32.2 2,212 33.7 4 0.0 27,147 17.8 1 one 38,432 44.3 17,359 39.5 2,678 40.8 103 0.7 58,572 38.4 2two 30,110 34.7 11,546 26.2 1,207 18.4 8 0.1 42,871 28.1 3 three 5,650 6.5 573 1.3 192 2.9 8 0.1 6,423 4.2 4 four 738 0.8 17 0.0 88 1.3 843 0.6 7 no response 1,120 1.3 343 0.8 185 2.8 14,909 99.2 16,557 10.9 Total 86,822 100.0 43,995 100.0 6,563 100.0 15,032 100.0 152,412 100.0 What is the smallest number of bathrooms you can live with one or one and a half 45,387 52.3 33,728 76.7 4,305 65.6 107 0.7 83,527 54.8 two 34,706 40.0 8,697 19.8 1,765 26.9 8 0.1 45,176 29.6 two and a half 3,042 3.5 1,119 2.5 4,161 2.7 three 2,795 3.2 169 0.4 115 1.7 8 0.1 3,087 2.0 four or more 748 0.9 9 0.0 88 1.3 846 0.6 7 no response 144 0.2 272 0.6 290 4.4 14,909 99.2 15,614 10.2 Total 86,822 100.0 43,995 100.0 6,563 100.0 15,032 100.0 152,412 100.0 What is the smallest size home you would be willing to live in Please give your answer in terms of square feet. about 800 sq. ft. 5,778 6.7 6,003 13.6 1,401 21.3 47 0.3 13,229 8.7 800 to 999 sq. ft 6,362 7.3 7,064 16.1 601 9.2 12 0.1 14,039 9.2 1,000 to 1, 199 sq. ft. 18,596 21.4 8,313 18.9 1,182 18.0 28,091 18.4 1,200 to 1,499 sq. ft 15,729 18.1 5,091 11.6 1,196 18.2 56 0.4 22,072 14.5 1,500 to 1,999 sq. ft. 13,636 15.7 3,824 8.7 189 2.9 17,650 11.6 2,000 sq. ft. or more 12,750 14.7 3,023 6.9 352 5.4 8 0.1 16,133 10.6 not sure 13,972 16.1 10,678 24.3 1,642 25.0 14,909 99.2 41,200 27.0 Total 86,822 100.0 43,995 100.0 6,563 100.0 15,032 100.01 152,412 100.0 Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 61 February, 2007 Table C -1. Average Rents for Apartments and Houses, 2006 by Type, Bedroom, and Area Source: Rental Survey January 1 through November 30, 2006. See Technical Report for details. Sample sizes for small areas and for Kauai were affected by low ad counts and may be affected by small sample sizes. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 62 February, 2007 Avera e Rents Apartment Apartment House Townhouse County Areas Studio 1 2 Other I Total 3 &4 Other 2 3 T Other Other I Honolulu $787 $970 $1,253 $1,777 $1,208 $2,264 $1,738 $1,542 $1,977 $1,208 Central Central Honolulu $979 $1,240 $2,021 $2,820 $1,657 $1,840 $1,433 $1,150 $1,580 $2,576 East Honolulu $1,100 $1,735 $2,289 $3,052 $2,257 $3,068 $2,899 $2,021 $2,602 $2,412 Ewa Plain $800 $1,194 $1,400 $1,500 $1,370 $2,335 $2,270 $1,516 $2,031 $1,290 Leeward $792 $964 $1,159 $1,390 $1,020 $3,068 $2,899 $1,096 $1,508 $2,254 Makiki /Manoa $952 $1,120 $1,659 $2,421 $1,372 $2,857 $1,868 $853 $1,042 $1,256 Pearl City /Aiea $926 $1,228 $1,515 $1,908 $1,321 $2,252 $1,542 $1,610 $1,950 $1,543 Salt Lake $939 $1,152 $1,531 $1,960 $1,427 $1,354 $1,262 $1,008 $1,433 Waialae / Kahala $2,400 $1,563 Waikoloa $913 $2,274 $3,541 $ 2,982 $1,810 $1,225 $1,694 Waikiki 905.9 1415.5 2053.4 2772.3 $1,572 $1,683 $1,800 $1,085 $1,178 $1,700 Windward 1202 1453.3 1632.94 2105.2 $1,618 $2,685 $ 2,066 $1,838 $2,344 $ 2,032 Other 1090 1487.8 2016.45 2002.4 $1,698 $2,388 $1,809 $1,312 $2,022 $2,348 Total $960 $1,263 $1,798 $2,464 $1,552 $2,467 $1,939 $1,574 $2,133 $1,522 Source: Rental Survey January 1 through November 30, 2006. See Technical Report for details. Sample sizes for small areas and for Kauai were affected by low ad counts and may be affected by small sample sizes. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 62 February, 2007 Average Rents Apartment House County Areas Studio 1 2 Other Total Cottage 2 3&4 Other I Total Maui $777 $1,075 $1,345 $1,809 $1,236 $1,008 $1,361 $1,987 $2,580 $1,599 Central South $1,217 $1,206 $1,460 $1,840 $1,433 $1,150 $1,580 $2,576 $3,083 $1,858 Upcountry $750 $1,200 $2,117 $2,000 $1,712 $1,098 $1,494 $2,114 $3,175 $1,613 West $1,035 $1,478 $1,809 $2,355 $1,788 $1,102 $2,049 $3,016 $1,600 $2,330 Total $984 $1,223 $1,498 $2,075 $1,461 $1,096 $1,508 $2,254 $2,892 $1,711 Hawaii $745 $806 $969 $1,303 $886 $853 $1,042 $1,256 $1,642 $1,181 East Hawaii Kona - Keauhou $970 $1,100 $1,529 $1,984 $1,422 $1,184 $1,812 $2,100 $3,200 $1,947 Capt. Cook - Kealakekua $900 $1,025 $1,354 $1,262 $1,008 $1,433 $1,861 $2,400 $1,563 Waikoloa $913 $2,274 $1,653 $2,494 $1,810 $1,225 $1,694 $2,158 $1,977 Waimea - Kohala $838 $983 $1,683 $1,800 $1,085 $1,178 $1,700 $2,047 $2,150 $1,813 Other $969 $958 $1,575 $2,018 $1,175 $992 $1,289 $1,630 $1,767 $1,455 Total $855 $1,027 $1,409 $1,880 $1,306 $966 $1,303 $1,504 $1,803 $1,508 Kauai $950 $750 $850 $1,231 $1,354 $1,611 $1,477 West Lihue $988 $925 $1,462 $1,909 $1,427 $890 $1,679 $1,971 $1,797 Wailua - Anahola $781 $1,080 $1,371 $1,733 $1,090 $1,435 $1,494 $1,859 $2,200 $1,679 Poipu - Kalaheo $1,028 $1,200 $1,400 $1,692 $1,254 $1,273 $1,487 $1,968 $2,200 $1,713 North Shore $1,097 $1,408 $1,553 $2,238 $1,622 $1,199 $2,108 $2,608 $3,250 $2,332 Other $850 $1,850 $1,950 $1,690 $795 $1,950 $2,299 $2,100 $2,006 Total $929 $1,092 $1,469 $1,992 $1,357 $1,272 $1,600 $2,017 $2,533 $1,801 Total Oahu $960 $1,263 $1,798 $2,464 $1,552 $ 2,110 Total Other Islands $876 $1,077 $1,442 $1,942 $ 1,347 $ 1,617 Total All Hawaii $929 $1,218 $1,693 $2,235 $ 1,490 $ 1,641 Source: Rental Survey January 1 through November 30, 2006. See Technical Report for details. Sample sizes for small areas and for Kauai were affected by low ad counts and may be affected by small sample sizes. Hawaii Housing Policy Study, 2006 © SMS, Inc. Page 62 February, 2007