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I know people who live in affected communities and it is a rough time for them.
Yes, the Navy offered to put them up out in town at hotels or at military hotels elsewhere on island, but many are staying put due to having pets that weren't adjusting to hotel life.
For better or worse, I think there is a fair chance that an increasingly large number of residents will opt out of using military housing with a water source fed by the Red Hill Shaft in the future, instead opting to find housing out in town. Doesn't bode well for those who want housing prices to come down, I wager.
For those who haven’t been tracking:
Quote:
Water samples taken from the Navy’s Red Hill shaft on Dec. 5 contained total petroleum hydrocarbons associated with diesel fuel that were 350 times above levels that the state considers safe, according to a news release from the Hawaii Department of Health today.
DOH says that the Red Hill shaft samples also tested positive for gasoline range organics at levels that were more than 66 times the state’s “environmental action level.”
For better or worse, I think there is a fair chance that an increasingly large number of residents will opt out of using military housing with a water source fed by the Red Hill Shaft in the future, instead opting to find housing out in town. Doesn't bode well for those who want housing prices to come down, I wager.
Don't military housing allow pets? Very tough to get pet friendly rentals on Oahu. And those houses have decent square footage - I suspect non-military housing options to get a comparable place will be much more expensive.
Rents are actually down in Honolulu due to the AirBnb ban.
Don't military housing allow pets? Very tough to get pet friendly rentals on Oahu.
That's a good point. As far as I'm tracking, military housing does allow pets. I see some pet-friendly rentals, but they are limited (going to your point).
Based on a quick Zillow search, less than a 1/4 of available rentals shown via that site allow for small dogs (this is island-wide), with 7% allowing large dogs and less than 1/4 allowing cats.
I'm sure that Zillow doesn't represent the entire picture, but still pretty telling.
I'm also curious how much room there is for negotiation. As an example, when I rented out my condo in 2019, I told my property manager that I'd be open to accepting small dogs or cats; my current tenant has neither. But for the right amount of pet rent, I would have accepted a large dog, even though that point wasn't noted in my listing. Still, that would just go to your point about added expense of living out in town vs. on base for some folks.
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Originally Posted by whtviper1
And those houses have decent square footage - I suspect non-military housing options to get a comparable place will be much more expensive.
That's another thing. The military housing I've seen is definitely a bargain once you start to talk about larger families (I'm talking 2+ kids and parents), especially if you want to live somewhere decent. But I still think we'll see some freak out over the risk of folks getting sick due to the potential of future leaks and bite the bullet to get town housing (I note that the current monitoring systems didn't catch this recent contamination where it mattered and there are still people hospitalized today). From what I was reading last night on one of the Navy's social media pages on island, I think folks are being allowed to cancel their leases now without penalty.
In any event, this is definitely something that I'm continuing to follow.
Quote:
Originally Posted by whtviper1
Rents are actually down in Honolulu due to the AirBnb ban
I did recall seeing that rents were decreasing in Honolulu, but that was earlier during the pandemic when we saw such trends throughout much of the country Other things I'm reading now point to increases and/or predictions of increases due to rental shortages as people are buying up properties and not renting them out at substantial levels
I did recall seeing that rents were decreasing in Honolulu, but that was earlier during the pandemic when we saw such trends throughout much of the country Other things I'm reading now point to increases and/or predictions of increases due to rental shortages as people are buying up properties and not renting them out at substantial levels
With Hawaii leading the nation in residents leaving the state on a per capita basis - I don't see a rental shortage anytime soon.
With Hawaii leading the nation in residents leaving the state on a per capita basis - I don't see a rental shortage anytime soon.
State population isn't a good correlation to rent prices. You can have a declining population in a state but have rent increases in more than half of the cities in that state. Changing demographics play a larger role in rents. And housing prices, land cost and construction cost. Currently it costs developers $900-$1300/SF to develop a new project whether SFH or condos. And these costs aren't dropping. It makes zero sense for developers to build rental housing now. The return on investment is about 3% for a typical multifamily property and mid 2% return for SFHs. Bill 7 which passed to help developers build affordable fell flat on its face because developers don't want to embark on a 3-year long project tying up resources and a ton of money just to lose money at the end (shocker). People are also putting a higher demand on location. So even with a declining population you can see rent reductions in some areas and rent increases in others.
One anomaly that is never discussed is that even with the small net migration four years in a row here, we have more and more transients living here. The count we read about is only permanent residents. So we could actually have an increasing number of people physically in the state even if the permanent resident count drops.
You can have a declining population in a state but have rent increases in more than half of the cities in that state. Currently it costs developers $900-$1300/SF to develop a new project whether SFH or condos.
Let's rinse and repeat on this.
Again - rent is down in Honolulu.
And are you kidding me - $900 SF for a single family home (on your low range). Seriously? Let's get back to reality - not even close. Give me a budget of $900 SF ($1.5M for a modest home/land) and I'd do that full time.
And rentals are coming online - Lilia, with 400+ units in Waikiki are live in early 2022. The rental market is not dead.
$900 a square foot for single family homes - I mean seriously - you could buy all over a high price area like Kailua - do teardowns (which is common nowadays) - and be well under $900 SF - way way under. Kailua/Hawaii Kai is running closer to $700 SF for new construction (which is historically high) - and you can develop for much lower in Kalihi - Kaneohe - anywhere west side, etc.....
Apparently, state employees have access to live in off-base military housing, too, which I wasn't tracking until now. This changes some of what I stated about potential impact on increasing rents.
But, unlike active duty residents and families, civilians are not getting per diem payments to cover expenses. They are having hotel rooms paid for in town by the military, but that's about it, though the feds are working to secure additional funds to pay civilians impacted by this mess per diem.
-To the woman with two children living at a hotel in Waikiki and complaining about sometimes spending $100 a day on food (she's a teacher) as food in Waikiki is expensive and she doesn't have an oven/etc. in the hotel room, it's hard for me to have sympathy--as crappy as her and other people's situation is--when she could have bought a hot plate and and a larger mini-refrigerator to supplement the small refrigerator that's already in the hotel room. She would have more than saved on out of pocket expenses this way.
-There's another case where a former military spouse is regretting deciding to live on base again, despite her claims that her child developed infant botulism when they were living on Fort Meade in Maryland, which she blames on something wrong at the fort (Fort Meade is a Environmental Protection Agency superfund site). I think cases like hers--in addition to the fact that this is the second oil spill from this source that impacted drinking water in less than ten years--is going to make more and more families think long and hard before signing a lease to live in housing with water sources close to the shaft, I'd wager.
-To the woman with two children living at a hotel in Waikiki and complaining about sometimes spending $100 a day on food (she's a teacher) as food in Waikiki is expensive and she doesn't have an oven/etc. in the hotel room, it's hard for me to have sympathy--as crappy as her and other people's situation is--when she could have bought a hot plate and and a larger mini-refrigerator to supplement the small refrigerator that's already in the hotel room. She would have more than saved on out of pocket expenses this way.
Food is only expensive in Waikiki - if you seek out expensive options. You can do sandwiches at ABC stores/hot dogs - you have McDonalds and BK - ramen places - you can Uber to Safeway on Kapahulu, etc....
Food is only expensive in Waikiki - if you seek out expensive options. You can do sandwiches at ABC stores/hot dogs - you have McDonalds and BK - ramen places - you can Uber to Safeway on Kapahulu, etc....
$100/day is being dramatic......
I agree, which is why it's hard for me to have sympathy for that particular case. It's not like this woman is new to the island and doesn't know her way around. I could feed a family of three (parent and two small minors) on $100 a week, even on Oahu, though it would require cooking and not eating out. Point is that this woman has other ways to make ends meet and is needlessly spending money, even within Waikiki as you pointed out if she wanted to not spend so much money.
And are you kidding me - $900 SF for a single family home (on your low range). Seriously? Let's get back to reality - not even close. Give me a budget of $900 SF ($1.5M for a modest home/land) and I'd do that full time.
And rentals are coming online - Lilia, with 400+ units in Waikiki are live in early 2022. The rental market is not dead.
$900 a square foot for single family homes - I mean seriously - you could buy all over a high price area like Kailua - do teardowns (which is common nowadays) - and be well under $900 SF - way way under. Kailua/Hawaii Kai is running closer to $700 SF for new construction (which is historically high) - and you can develop for much lower in Kalihi - Kaneohe - anywhere west side, etc.....
As I noted, land + construction cost + development costs are definitely within that range. How would I know? I'm building my own house right now.
Tear down house cost $1.05M which actually was a really good deal. I am building a modest size house of 2,000 SF, 3 bd, 3 bath + 2 car garage with decent finishes but by no means opulent. I have a friend that is spending $600/SF to build his house with very nice finishes. And I know ultra lux houses go $1,000++/SF. But let's just stick to my slightly above average finish house... Construction cost came in just shy of $750K including some site work (excavating, retaining walls) that needed to be addressed but nothing too crazy. Consultants incl structural, architectural cost me $40K. It will be completed roughly 30 months after I closed on the tear down property. It took 6 months to complete the building permit plans for submittal. It also took 10 months to get a demolition permit from the city although this permit was in process when we started the house design. After 6 months of design and plan completion, it took 10 additional months to get the building permit. Construction is slated to be completed 14 months after start. So I've had money tied up in a piece of dirt for 30 months by the time I have a home I can live in. Interest on land and construction cost paid would come in around $100K. Interest on soft costs and construction cost on average another $30K. Utilities and RP taxes paid over the period come in around $24K. So total soft cost incl interest and come in around $200K. So $1.05M for the land, $750K construction, $200K all soft costs. That is an even $2M. House is 2,000 SF so I'm at $1,000/SF just to start.
But this isn't about me... I was talking about developers. Developers have higher costs including bank bonding requirements, loan acquisition fees, appraisals, higher interest rates because of risk profile, etc. Let's just say that's only 5% which is low. Now we are at $2,050,000. Then there is 6% to the realtor and another 1% to closing cost. So now they are at $2.2M. Then there is this thing called profit that these developers need to make. Let's say that a developer is willing to make a measly 20% profit on a 2.5 year long project. This is about 7% annualized return/year for spec construction which is absolutely unheard of but let's just go with that. So now we are at $2.64M for a developer to turn a profit for this 2,000 SF house. This comes out to $1,320/SF. Let's say the developer has amazing connections on cheap labor and materials and built a dirt cheap budget house with the cheapest finishes imaginable. This gets us to about $1,175/SF. Let's say developer bought a ridiculously tiny lot of 3,000 SF for only $500K (which is unheard of) and somehow managed to squeeze that same house on it (not allowed by zoning but let's pretend)... their cost per SF all in would be down to $950/SF. Well within my $900-$1300/SF range that you thought was absurd.
My company (engineering) are consultants on multifamily housing and all-in costs are well over $700/SF for the most basic, no frills units after all fees are calculated. And this is BEFORE land, carry cost and profit. They have to pay nearly $30K/unit just in permit/permit review/water/sewer/park dedication/DPP fees. Easily pushing the total hard cost for a developer well over $900/SF. People wonder why market rate condos sell for $1,100/SF++. Granted the large developments have economies of scale and get all kinds of freebies and breaks from the city to reduce their fees. Still, they would be losing money selling for sub $1,000/SF for a condo today.
I'm sorry you are out of touch of what things actually cost here. Hopefully this information was enlightening.
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Other things I'm reading now point to increases and/or predictions of increases due to rental shortages as people are buying up properties and not renting them out at substantial levels 
