Rents in this place are high. Yes, everyone knows that.
But the annual “Out of Reach” report, now marking its 30th year, serves as a way to underscore just how long Hawaii has lived with this burden. The mismatch: The cost of housing is higher than most salaries can comfortably cover.
The bottom line: Hawaii faces a persistent crisis providing housing that people with a renter’s typical income can afford, and must pull out all the stops to bridge the growing gap.
“Out of Reach” is published by the National Low Income Housing Coalition, a nonprofit affordable housing advocacy organization. There are cities more expensive than Honolulu in its survey, but considering states as a whole, since 2007, Hawaii has ranked first for the highest “two-bedroom wage.”
This means this state has the highest wage requirement for renters if they are to afford a two-bedroom unit — assuming only 30% of the money goes to rent.
Many people in this state are compelled to manage with a much narrower margin, and it’s always been a difficult balancing act. Even in 2005, when the District of Columbia outranked Hawaii with the highest rents, it already took two jobs here at the average renter’s wage to make a two-bedroom rental affordable.
This year, that’s up to 2.2 jobs, which basically means the average wage has not increased over time enough to cover the increase in rents — even through an economic recovery.
Would the sought-after boost in the state’s minimum wage have helped? Yes, because a higher minimum wage tends to add upward pressure higher on the earnings scale.
And the gap for those who are trying to cover costs with minimum-rate paychecks is simply extreme: It takes 146 work hours per week at minimum wage here to afford the average two-bedroom.
But the problem extends beyond that. Most people dealing with the housing challenge make above minimum wage; there are many who are professionals in the rental market, as well.
At the demand side of this equation, there needs to be better-paying job opportunities than are most common in a service economy such as Hawaii’s. This is a long-term challenge of economic diversification and workforce development. Industries with the most livable wages must be encouraged, and the future employees must get the education and training to qualify for these jobs.
Clearly the supply-side inventory of affordable rentals needs critical attention in the near term.
The Legislature has been paying some attention in recent years, with large appropriations over the past two sessions for the state’s rental housing fund to assist developers in financing subsidized affordable rentals. The counties have a huge role in development and have taken some initial steps in the right direction. For example, the city has passed various incentives to encourage the expansion of walk-up apartment buildings, many of which comprise affordable rentals.
And most recently, the Honolulu City Council has at last passed legislation to rein in illegal vacation rentals. Their numbers have been estimated at roughly 8,000 units, both whole-home and single-room rentals.
It’s critical that efforts at enforcement succeed. Many of the rental owners then will have the incentive to return the unit to the long-term rental inventory, enabling more to be let to Hawaii residents. Others may then have the incentive to add accessory dwelling units to their property, as well.
There is room for everyone — lawmakers, landlords, developers — to step up and fill the housing demand. Failing that, the most basic of living expenses, housing, will continue to move out of reach for many of Hawaii’s people.