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Wow. I'm sorry I missed this thread. (I spent the last two weeks on Maui; lucky me) Too many things said already for my two cents. But as a landlord in Hawaii I agree with what Tuck's Dad said.
I will only add that Hawaii's is not the only place high rent is occurring. It is not just a Hawaii problem. Supply and demand fuels this debate and since no one wants to over develop any Hawaiian Island; high rent will always be a problem in Hawaii.
But mostly what I'm trying to address here is the non-subsidized mid-range housing that is in severe shortage in the state, according to in-depth studies like the Hawaii Housing Planning Study (2011).
But again, that is only the bottom 10-20% of the market. It's the people who are trying to get by on middle incomes who are under the greatest pressures.
That is a really interesting study. Who am I to argue with that, folks obviously put a lot of effort and research into it.
This was where my wife and I fell, we were OK as singles living together or married with no kids but once we wanted to start a family we made too much for any subsidies but too little to live anywhere decent, afford childcare (both of us and her parents still worked), have a reasonable commute and send our kid to acceptable schools. Sort of right at that $100k combined where a lot of middle class professional folks seem to fall. It's not that we couldn't make it, we certainly could, we just didn't like living a medical emergency or a layoff away from being bankrupt with no savings and little time to enjoy the great things about Hawaii because we worked so much. Where we live now housing (to purchace) is less than half of HNL, we make 30% more that we were making before we left, and the public schools and state colleges are both very good.
I'll be honest, I am still somewhat skeptical that anything can keep rents down, but you have convinced me that more units and better quality units in better laid-out communities would at least improve the quality of life and prospects for middle class folks to enjoy a decent lifestyle as long as appropriate parks and other amenities are made as well. I also applaud any effort to fix the problem, it is easy for me to be critical but doing nothing isn't going to make it better either.
That is a really interesting study. Who am I to argue with that, folks obviously put a lot of effort and research into it.
I think so too. But I can't see that it's made much difference so far. I know elected officials have to prioritize their efforts, but how is this not a priority?
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I'll be honest, I am still somewhat skeptical that anything can keep rents down, but you have convinced me that more units and better quality units in better laid-out communities would at least improve the quality of life and prospects for middle class folks to enjoy a decent lifestyle as long as appropriate parks and other amenities are made as well. I also applaud any effort to fix the problem, it is easy for me to be critical but doing nothing isn't going to make it better either.
Thanks, I appreciate the comments, and I'm glad my core message landed for you. That's why I go to the effort.
The experts* disagree, and I trust their research and their opinion. It's just common sense that if the state needs 5,000 new units built state-wide in a year to accommodate population growth from all sources, including local births, but only 1,000 units get built, then there will be a deficit of 4,000 total to the supply. Repeat that a second year, and the total deficit will be 8,000 units. Repeat that pattern for five years and the state will be 20,000 units behind.
And that's what has been happening, cycle after housing cycle, for many years. And for people with low to medium incomes, that already bad situation has been made worse because what housing is getting built today is very much skewed to the high end of the market.
The term shortage is misunderstood and a few "expert" sources that misunderstood basic economics are at fault for spreading the misconception. A true shortage can only occur for a sustainable period in a vacuum. Issues of scarcity are often confused with shortages, such as happened here.
The issue is that there is an abundance of housing available, even after the 5000 births, but it is available at the market clearing price. When the demand curve shifts outward (right) and the supply curve shifts outward (right) by a smaller amount, the result is that generally the two will price at a higher point, which results in a higher price being charged for the scarce resource.
A shortage means that you can not buy more of the product at ANY price. The price is not simply whatever price you wanted to pay, the shortage would be if you could not buy another house with a trillion USD. Then you could argue that it was a shortage, rather than a scarcity issue.
Unfortunately, this undermines the premise for your argument because it is crucial to understand the terms you are using. On the aspect that Hawaii should allow more housing, I'm generally in favor of that. Bringing down the cost of island life for middle income people raises utility overall as more people can enjoy it. However, assuming that new population won't flood the new housing space is assuming that the demand for island living is not largely connected to its affordability. I believe the volume of people choosing to live on Hawaii would be substantially higher if it was an affordable option for middle class families to move from the mainland to Hawaii.
As I found through previous research, it is difficult but far from impossible for a middle class family to make it work in Hawaii. The trick is understanding that moving to Hawaii does not entitle anyone to live within a thousand feet of the beach. Housing costs drop off substantially going farther inland. The number of people that wish to live on the coast dramatically exceed the amount of coastal space available. Even if several new condo buildings were established that were 50 stories high, the new space would be quickly occupied.
It is unlikely Hawaii will see relaxed requirements for building that would drive down prices. The percentage of people owning a home is low and the landlords that exist to meet the demand for property are heavily vested in preventing new construction which would increase the supply and make the area become less desirable (aside from price) by increasing congestion issues. The average voter is not competent enough to understand the dollar impact those regulations have, so there won't be a strong and effective push to reduce the cost (not price) of housing. Attempts to reduce the price only provide temporary benefits.
The term shortage is misunderstood and a few "expert" sources that misunderstood basic economics are at fault for spreading the misconception. A true shortage can only occur for a sustainable period in a vacuum. Issues of scarcity are often confused with shortages, such as happened here.
Thanks, but honestly, I don't think that parsing the semantic differences between scarcity and shortage makes any practical difference at all. If it is said there are 50,000 fewer housing units available than the current market will bear, the average citizen won't care if you call that a scarcity or a shortage. Either way, it is clear there are not enough housing units for everyone who wants to rent one.
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Unfortunately, this undermines the premise for your argument because it is crucial to understand the terms you are using. On the aspect that Hawaii should allow more housing, I'm generally in favor of that. Bringing down the cost of island life for middle income people raises utility overall as more people can enjoy it. However, assuming that new population won't flood the new housing space is assuming that the demand for island living is not largely connected to its affordability. I believe the volume of people choosing to live on Hawaii would be substantially higher if it was an affordable option for middle class families to move from the mainland to Hawaii.
Affordable by whose standards? Even the Big Island rents, at half what people pay for the same thing in Honolulu, are still higher that average mainland rents. And as we've discussed before, the biggest market pressure from mainland expats is at the high end of the scale.
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As I found through previous research, it is difficult but far from impossible for a middle class family to make it work in Hawaii.
No argument there. This should be in a sticky at the top of the forum. I bolded it for emphasis.
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The trick is understanding that moving to Hawaii does not entitle anyone to live within a thousand feet of the beach. Housing costs drop off substantially going farther inland. The number of people that wish to live on the coast dramatically exceed the amount of coastal space available. Even if several new condo buildings were established that were 50 stories high, the new space would be quickly occupied.
That's not a factor in what I'm talking about... middle class high density low to mid-rise housing, built on cheaper land inland, away from the coast.
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It is unlikely Hawaii will see relaxed requirements for building that would drive down prices. The percentage of people owning a home is low and the landlords that exist to meet the demand for property are heavily vested in preventing new construction which would increase the supply and make the area become less desirable (aside from price) by increasing congestion issues.
Again, there are ways to differentiate value levels. Smaller units, with economy features, without the coastal vistas, these would be attractive to young working people who grew up on the islands and just want to get out of their mom's ohana.
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The average voter is not competent enough to understand the dollar impact those regulations have, so there won't be a strong and effective push to reduce the cost (not price) of housing. Attempts to reduce the price only provide temporary benefits.
My message is, build more lower COST units... not concrete jungles, but well designed, livable spaces that cost less to build. This sector has been methodically underserved for so long nobody is even paying attention, but it's a key component to maintaining a healthy, diverse community.
And as somebody else said earlier... who will the millionaires call to unclog their toilets if there's no good place for the Roto Rootermen to live?
And as somebody else said earlier... who will the millionaires call to unclog their toilets if there's no good place for the Roto Rootermen to live?
That is the beauty of supply and demand - the millionaires will have to pay more the Rooterman, thus lifting the wage of the Rooterman.
The problem with building more units catering the lower classes is space - the only open space left on Oahu is out West - there are already plenty of cheap units on the West Side - most people don't want to live there regardless of price since that is not where most of the jobs are.
ok so im planing to move in hawaii hopefully by summer and i dont know if moving to hawaii would be a good idea.
Aloha,
I suggest you spend as much time as you can reading the posts on this forum to find out the good, the bad, and the ugly. It's a valuable resource, full of insights.
That is the beauty of supply and demand - the millionaires will have to pay more the Rooterman, thus lifting the wage of the Rooterman.
The problem with building more units catering the lower classes is space - the only open space left on Oahu is out West - there are already plenty of cheap units on the West Side - most people don't want to live there regardless of price since that is not where most of the jobs are.
I completely agree with this. While personally I think that the government manages Hawaii poorly and thus our costs are artificially high, places that are more desirable to live are always going to cost more. If Bakersfield and Honolulu costs were the same, Bakersfield would essentially be empty and we'd be stepping on everyone's toes.
People can complain it's not fair, but fair isn't the issue - no one has ever been promised things in life are fair. Unless you look at it that is the same for EVERYONE, and thus..... is fair.
Everyone has choices to make in what is worth what for themselves. If your love of things in Hawaii outweighs all else, come and live here at a lower standard of living and be happy. If not, live where ever.
The majority of my very large, extended family is mainly middle class. I would say 90% of them own homes. We eat, drink and are merry; and we cringe when our electric bill arrives.
Sorry, I drifted a bit on that......
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That is the beauty of supply and demand - the millionaires will have to pay more the Rooterman, thus lifting the wage of the Rooterman.
The problem with building more units catering the lower classes is space - the only open space left on Oahu is out West - there are already plenty of cheap units on the West Side - most people don't want to live there regardless of price since that is not where most of the jobs are.
Ok not arguing with your ideal theory because its correct and no not wanting to make this a min wage argument either. But if your theory was correct in Hawaii about supply and demand raising the wages. Hawaii wouldn't be behind other states whos cost of living is lower and who also pay higher wages. Further, if wealth has any indication with supply and demand regaining wages Hawaii wouldn't be behind other states because she is one of the richest states. Also the ideal of trickle down ecconomics hasn't really worked in awhile thats why we have such inequalities
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