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As median home prices hover at $1M, the statewide search for affordable homes continues

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Casey Harlow / HPR
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State Homeless Coordinator Scott Morishige consistently points out that, not immediately, but in the years after the economic recession in 2009, what began as moving in with relatives, or couch surfing, took years to evolve into a huge increase in homelessness.

That's why as median home prices hover at $1 million on Maui, Oʻahu and Kauaʻi, the statewide search for shelter that people can afford, continues.

Maui now has a plan that could provide enough affordable housing, and fed-up renters on Oʻahu are starting to organize.

Jack, last name withheld to avoid retaliation, moved to Honolulu from Silicon Valley five years ago. If you haven't looked for a rental recently, he says it's tough out there.

"The first place we moved into had terrible water damage. We moved into another place, the first day we were there, there was water bulging out of the wall. My landlord's response is, "We'll send someone over in a few days,'" Jack said. "Then the person shows up and the person tells me, off the record, you should move. This is not a safe place for your little kid."

After incidents like this, along with stolen security deposits, and threats of eviction, Jack helped found the Honolulu Tenants Union in late 2019.

The idea is to educate renters about their rights and help connect them with services. Also, the idea is to organize in the face of what Jack calls a housing environment weighted in the landlord's favor.

Kenna StormoGipson is director of housing policy at the Hawai’i Budget and Policy Center, a research branch of Hawaiʻi Appleseed. She says for renters, being able to pay rent is not enough.

"One thing that has been happening is that even people with rental assistance have been evicted, sometimes because the landlord has decided to sell," she said.

If landlords want to sell, there is no recourse for a tenant.

"That has been hard to realize. That even people with money to pay rent from federal programs, especially on neighbor islands, Maui, Kauaʻi, there's literally no places out there that are affordable," StormoGipson said.

Foo Pham chairs the Housing Now committee of Faith Action for Community Equity. They have been following housing legislation for years and say Oʻahu, for example, currently needs about 22,000 affordable residences.

They support an Empty Homes Tax on non-owner occupied housing to encourage renting currently empty units.

"According to the latest census, it's about 85,000 vacant housing units on Oʻahu," Pham said. "So if we were able to tap into the existing units, and just take a third of those units back into the market by motivating them with this disincentive of the Empty Homes Tax, then that can give us the 22,000 units were seeking."

An Empty Homes Tax, or a tax on investment properties, makes sense in Hawaiʻi, which has the lowest property taxes in the country, according to StormoGipson. She said for the very wealthy, there is no disincentive to just running the AC and keeping their properties vacant.

"There's not that many people in Hawaiʻi that can afford to pay let's say, $4,000 a month rent for a two-bedroom. So, for the extra $48,000 I would get, if I'm making $100 million a year, is $48,000 worth of rent from my second home worth that much to me? I think that's part of what we're up against here. This is why every county is really looking at, how do we tax these homes?" StormoGipson said.

Currently, Hawaiʻi's property taxes are among the lowest in the nation. The average residential tax rate is 1.2% across the nation. In Hawaiʻi, counties receive less than half of that.

"If you live in any other state, that's the average you're paying, 1.2%. Here, the owner-occupied rate is about .35% on Oʻahu, every county is a little different. Our average is about .6%, so about half or less than half the national average," StormoGipson told HPR.

The Hawaiʻi State Teachersʻ Association identified this potential funding source several years ago but was not able to get the constitutional amendment needed to implement such a tax statewide.

"I think unfortunately in housing policy for a long time, there's been this idea that it's more the federal stuff, the feds will help pay for housing or the state will pay help for that, but it's not really the responsibility of the counties to pay for it."

"Housing policy and housing subsidy can very much be a county level issue. And probably in may ways should, because counties control zoning. They tend to do city planning around infrastructure. It does make sense for the counties to be more proactive about housing policy. The Maui County Affordable Housing Plan is a great example of this," StormoGipson said.

The Maui plan calls for raising money through investment property tax increases. Jeff Gilbreath is interim Executive Director of Hawaiian Community Assets, the group that convened about 1,500 stakeholders to formulate the Maui Housing plan.

"People are suffering. And we've allowed this to occur while we're seeing folks buying properties for $78 million, $45 million, $38 million. There is an abundance of resources. This is nothing new to Hawaiʻi," Gilbreath said.

"In traditional Hawaiian community, you had konohiki manage the resources within the ahupuaʻa which said, 'Hey, thereʻs an abundance here, and it's our responsibility to steward these resources so we meet the needs of the entire community."

In the Maui plan, funds raised through a tax on investment properties would be used to provide housing subsidies and to give affordable housing projects a leg up by installing water, sewage, and roads. Gilbreath says federal infrastructure funds could assist here.

Meanwhile, StormoGipson says, we witnessed a troubling phenomenon in Hawaiʻi over the Covid pandemic. Housing prices escalated while jobs and wages here were stagnant or dropping.

"That's a very concerning trend, because it means the pricing of homes is becoming more and more disconnected from wages that people earn. If what you have to pay to live in a house, is not connected to wages, how are you ever going to ever afford to be here?" StormoGipson said.

On Kauaʻi, the first island to surpass $1 million median home prices, some people have concluded that the only way forward is to ask for help from some of billionaires who have recently bought residences.

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