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We also lived kinda differently. All the things mentioned made it difficult for most to adept and they moved from Hawai'i. Now we have eliminated pretty much of the culture shock by making everything look like mainland and now heading to a island of rich entitlements.
Absent any significant gentrification I find 6% YOY increases over 35 years to be impossible. I can't find a 12-year period anywhere within the last 30 years where rents have doubled. I've even asked around some of my older friends and family as your previous posts got me curious. 6% is far from sustainable in the long term.
You might want to ask your friends and family about lease lengths and rental turnover rates.
For instance, "Kimo Landowner" owns a place in Waikīkī that he rented to his friend "Mary Malihini" in 2001 for $850 per month. In 2002, Kimo rents the place to "Bob Newcomer" for $1,000 per month, which represents an 17.65% increase over what Mary was paying for rent. In 2003, Kimo rents the place to "George Visitor" for $1,200 per month, which represents a 20.00% increase over what Bob was paying for rent. By 2013, Kimo has had several tenants, increasing the rent with each new rental agreement and his current tenant is "Crystal Kalapating" who's paying $1,975 per month. Over the course of 13 years, it averages out to more than a 6% year-over-year increase.
We also lived kinda differently. All the things mentioned made it difficult for most to adept and they moved from Hawai'i. Now we have eliminated pretty much of the culture shock by making everything look like mainland and now heading to a island of rich entitlements.
I think the biggest single "population control" measure of the past was air travel. In the 60's and 70's air travel was not affordable for the average American. There were also few direct flights to the Islands.
In the 80's airfares because affordable to the masses and more direct flights from more cities were developed. This made access to the islands easier for the masses.
I think that change is the primary driver to population growth and change on the islands. In my opinion far moreso than culture differences being a primary population control driver.
You might want to ask your friends and family about lease lengths and rental turnover rates.
For instance, "Kimo Landowner" owns a place in Waikīkī that he rented to his friend "Mary Malihini" in 2001 for $850 per month. In 2002, Kimo rents the place to "Bob Newcomer" for $1,000 per month, which represents an 17.65% increase over what Mary was paying for rent. In 2003, Kimo rents the place to "George Visitor" for $1,200 per month, which represents a 20.00% increase over what Bob was paying for rent. By 2013, Kimo has had several tenants, increasing the rent with each new rental agreement and his current tenant is "Crystal Kalapating" who's paying $1,975 per month. Over the course of 13 years, it averages out to more than a 6% year-over-year increase.
Properties with low vacancies and low turnover are those that generally don't experience consistent rent increases. Many problem-free long-term tenants don't see rent increases annually or even bi-annually. It is EXTREMELY rare to find a landlord that builds in rent increases into every new annual lease renewal if even tiny increases. For example, I purchased a multi-unit property in serious need of rehabilitation in Nuuanu quite a few years back. Several of the tenants were paying $950/mo for a 2bd/1ba in an old tear down (this is Nuuanu now). They were living there for 50-55 years. Their rent didn't increase for well over a decade when I closed on the property. It was flat for many, many years. And this isn't some rare thing in Hawaii. Many elderly Japanese, Chinese, Portuguese, etc that have owned their property since the mid 1900's (many of which immigrated here or are second generation) have zero mortgages and their tenants have evolved almost into family. They don't need to increase rents because the overhead associated with the properties are so low that despite the very low rents, the owners still netted a decent cash flow and provided for a no-frills standard of living they are very happy with. You would be blown away at how many properties exist on Oahu that rent well below market... they may not be the prettiest properties out there... but there are many that aren't that bad. Some of the best deals on rentals can be had by the once-upon-a-time lower/middle class worker that busted their behinds and made some smart investments when they were young. Their roots in lower/middle class society show through their willingness to keep rents lower than market. Unfortunately, as these simple-living, low-frills elderly pass on their homes to their children or sell on the market, they become owned by people that expect a much higher standard of living. They want to travel the world, own fancy cars, hang out at bars that charge $10 for a freaking jack and coke. So to support this lifestyle people are doing everything in their control to squeeze every penny they can out of rents. I have friends that charge full market pop on their properties and they are constantly dealing with nightmarish tenant issues and high turnover. To them, it's worth the hassle because they can squeeze that extra $300/mo or whatever to support a portion of the lease payment on their new X5.
I'm simply making the argument on the 6%/YOY consistent rent increases because it's very misleading for those considering moving here. Apparently a lot of the forum participants here are vehemently against anyone moving here that makes less than 6-figures. They scare people by telling them their rents will double every 10-12 years... or $1.00 in California is worth only 74 cents here... and they will find themselves homeless and unable to feed their children inside of 6 months. Most of it is just plain silliness. I do think rents will increase in the interim... perhaps 15-20% (TOTAL) over the next several years. But to expect that to keep pushing up up and up over the subsequent 5+ years is just gloom and doom hysteria. I'm sure many of the landlords on this forum would love to see that happen. Despite being a landlord myself and being a direct beneficiary of market increases in rent... it's definitely not good for our locals and younger generations striving and working hard to stay put on our island. Just as I am in the construction industry, I would (financially) benefit greatly from the implementation of rail on our island. However, I vigorously lobbied against it through huge campaign donations, public meetings, forum participation (I was a hardcore anti-rail contributor to the old Honolulu Advertiser forums - oh how I miss those forums) but it wasn't enough to stop it. My point being not everyone on Oahu cares to see our island go to ***** so they can fatten their wallets.
Got to love you Kama'aina uncle! Spoken like a true local. The only thing i disagree with is the statement of " I do think rents will increase in the interim... perhaps 15-20% (TOTAL) over the next several years. But to expect that to keep pushing up up and up over the subsequent 5+ years is just gloom and doom hysteria." I think with the paradise tax mentality that alot have because hawaii is an investment and a status symbol that they will keep raising prices as high as they can get away with it.
I think the biggest single "population control" measure of the past was air travel. In the 60's and 70's air travel was not affordable for the average American. There were also few direct flights to the Islands.
In the 80's airfares because affordable to the masses and more direct flights from more cities were developed. This made access to the islands easier for the masses.
I think that change is the primary driver to population growth and change on the islands. In my opinion far moreso than culture differences being a primary population control driver.
I find that interesting, because even back in the 70s, Oahu was still one if the most expensive places to live. So obviously if you can afford to live here you can fly here. Airfare was more expensive In 1978, you could pay $278 to fly PDX-HNL-KOA (round trip) or in 1977 pay $248 RT from West Coast to Oahu. During the 70s Oahu saw aprox 4 million visitors to Honolulu (thats half of today)
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Last edited by hawaiian by heart; 05-29-2014 at 04:58 PM..
Oahu's population was app 630,000 back in the 70s. Idk my mother was a single mother and wasn't an executive and could afford to take care of me and fly us back and forth a few times from Hawai'i to Mainland and back. I truely believe its the lack of mainland stuff back then because in the 80s is when we start seeing the influx of mainland stuff and the population starts to explode.
I'm simply making the argument on the 6%/YOY consistent rent increases because it's very misleading for those considering moving here. Apparently a lot of the forum participants here are vehemently against anyone moving here that makes less than 6-figures. They scare people by telling them their rents will double every 10-12 years... or $1.00 in California is worth only 74 cents here... and they will find themselves homeless and unable to feed their children inside of 6 months. Most of it is just plain silliness. I do think rents will increase in the interim... perhaps 15-20% (TOTAL) over the next several years. .
It is naive to think rent will only go up 20% total in the next several years (let's call it 7), when actual data suggests otherwise.
It is also naive to think anyone on a FIXED income, won't be subject to rent increases that will far outstrip any increases to the fixed income.
And to suggest that "anyone" should move here is naive to think the islands can continue to handle the current population growth. Something has to give.
Airfare was more expensive In 1978, you could pay $278 to fly PDX-HNL-KOA (round trip) or in 1977 pay $248 RT from West Coast to Oahu.
Sorry, my friend, but you've fallen into a very common pothole with this argument.
According to Bureau of Labor statistics, $248 in 1977 was equal in buying power to $970.20 today, and with just a little shopping I can easily beat that.
I think that change is the primary driver to population growth and change on the islands. In my opinion far moreso than culture differences being a primary population control driver.
Mmmmm, state statistics say otherwise. High birthrate and extended lifespans are the real drivers of population growth in Hawai'i.
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