City planners project that an existing housing shortage on Oahu could disappear in five years based on current and anticipated residential development projects.
The city Department of Planning and Permitting shared a report Thursday that predicts Oahu’s housing supply will shift from a shortage to an equilibrium in 2024 and then a surplus through at least 2040.
If the projection is correct, a deficit of almost 8,700 homes last year would swing to a surplus of 5,500 homes by 2040 and possibly 12,600 homes by 2050.
More demand than supply puts pressure on housing prices that makes homes less affordable and can lead to overcrowding and people moving off the island or out of state.
DPP’s report expects that 37 percent of new home production will be affordable to households earning no more than 140 percent of Honolulu’s median income, which is the upper limit of “affordable housing” under federal guidelines. Still, for low-income households, a shortage of 1,380 affordable homes will still exist 10 years from now, the report said.
“The inputs received from developers show optimism for the future in that overall supply will significantly grow, but the need for lower income housing will continue to be a challenge,” Kathy Sokugawa, DPP acting director, said in a statement.
DPP prepared its report using net population growth estimates combined with expectations for production of major known housing projects and smaller ones that typically get built.
The report said developers, which typically tailor production to population growth, dropped production below demand amid the Great Recession that followed the global financial market meltdown in 2007 and have not caught up yet. In fact, since 2010 the gap between supply and demand has widened, the report said.
DPP expects that Oahu will see a net gain of 77,700 homes between 2010 and 2040 to bring the island’s housing stock to 414,600 units for a projected population of 1,086,700. The addition breaks down to between 2,000 and 4,000 homes a year.
Looking ahead, most of these homes — about 30,000 units — are expected in the Ewa region led by the 11,750-home Ho‘opili project, which is in an early stage of production. Another roughly 20,000 homes are expected in Honolulu’s primary urban core, and about 14,000 are expected in Central Oahu.
DPP based its projections on projects that are being built, are permitted or are in planning phases. The agency included projects that are zoned for residential development or lack zoning but are supported by city development plans. Also in the count was about 150 homes a year that are typically built by small developers.
One caveat to DPP’s report is that not all the expected new homes will likely be occupied by residents. The agency didn’t count condominium-hotel projects, but said some of the new residential inventory may be bought as second homes by out-of-state buyers or used as transient accommodation rentals. It’s possible that up to 15 percent of new homes may not be available to residents, the report said.
DPP’s report, which also includes information on land use approvals and city infrastructure improvements, is an update of a 2016 report on land use on Oahu.
The report can be obtained at bit.ly/2tSGr1W online.
GROWING
Areas expected to have biggest increases in new homes:
>> Kapolei East: 13,132
>> Ala Moana/Kakaako: 8,033
>> Waiawa: 7,400
>> Kalaeloa: 6,650
>> Kalihi/Palama: 5,176
>> Makakilo/Makaiwa Hills/Kunia: 4,571
>> Waipio: 3,500
>> Ko Olina/Honokai Hale: 3,286
>> Aiea: 2,740
>> Village Park/Kunia: 2,111
Source: City Department of Planning and Permitting
