Honolulu is tied for being the least affordable city for renters nationwide, with only 8 percent of middle-class jobs paying enough to afford a two-bedroom apartment.

The city also is tied for second with nearly two dozen others as least affordable for homeownership, behind only San Francisco, with just 1 of 74 service positions earning enough to afford a median-price home, according to the Washington, D.C.-based Center for Housing Policy, which released a report today on the housing market in 200 metropolitan areas.

"Hawaii faces a lot of unique challenges because it’s an island (state), it’s a tourism-driven economy and a lot of those jobs tend to be service jobs that don’t necessarily pay very well," said Laura Williams, author of the report. "There’s just not space to develop further so that creates a lot of demand for a small supply of housing."

Despite Honolulu’s median home price falling to $425,000 in the third quarter from $450,000 at the end of 2009, it still is the fourth most expensive market for homeownership, the report said. It’s also the third most expensive for rentals, with the average rent on a two-bedroom unit at $1,702, up from $1,631 two years ago.

To afford a median-price home, a family in Honolulu needs an income of $122,613 or more, according to the report.

Out of 74 Honolulu service jobs surveyed, only one — construction manager — earns more than $122,000. The average salary for service jobs is $43,910.

While housing is expensive in places such as New York City and San Francisco, those areas also tend to be more affordable because of the "extremely high-paying jobs" in the financial and technology sectors, according to Williams.

"Hawaii is definitely coming out on the high end of all of these measures," she said. "There’s a definite need for better, more affordable housing options."

The solution for many local families is to live in multigenerational households or rent out part of their homes to be able to pay the higher home prices here.

Chucky Stevens and his wife, May, both 43, rent out part of their nine-bedroom Aiea home, which includes a two-bedroom rental unit above the garage and a studio, to supplement two mortgages that total about $3,000 a month.

"Without the additional income it would be difficult to make ends meet and to keep the house within the family," said Stevens, who has two children, Skye, 13 and Nephi, 16. "It’s important for there to be a home where family members come back to when they’re older and also to help friends that may need a place to stay. The economy in Hawaii is very difficult to survive in. For the middle class, there’s no way that we can survive on a single income."

Makaha resident Kuuipo Kim, 59, said the rising prices of basic necessities such as food and utilities make it impossible to afford a home without some help.

"I make a little bit more than minimum wage, but not enough to qualify to buy a place," said Kim, who lives with her mother, brother, niece and nephew in a three-bedroom home.

"Even though it’s just a three-bedroom house, everybody manages even if they have to sleep in the living room or share a bedroom. With the increase in the cost of living — electricity has gone up, water has gone up tremendously — all these extras just make it really difficult for people to be on their own. People have no choice but to kind of all live together in order to survive."

Waipahu resident Dana Oguma, 30, and his wife, Jennifer, 31, opened an adult foster care home three years ago to be able to provide for their two children and mother in their five-bedroom rental unit. They currently have two live-in clients.

"The money we get from the clients all goes to rent," totaling $2,450 a month, Dana said. "If we didn’t have a care home we wouldn’t be living in a bigger place. On top of that, we would probably still be with our aunty and cousin living with them all together. We would definitely be struggling. We would just barely be making our bills."

Marc Orbito, a system analyst for the state, sacrificed his dream of owning a home with his wife and two children to help pay a mortgage on a seven-bedroom Pauoa Valley house with his mother, father, aunt and brother.

"We all pitch in to make ends meet," said Orbito, who has depended on his parents to take care of his children while he and his wife work. "Maintaining a level of comfort or even just surviving in ‘paradise’ requires some kind of sacrifice. We have to concede on one thing or another because things cost so much."

As Hawaii’s cost of living continues to escalate, Orbito is considering moving his immediate family out of state "somewhere where my dollar can stretch a bit further."