Peer-Review Questions: Essay #2: Analysis & Discussion of a ProblemName of writer:______________________Reviewer: _____________________Thesis: Does the writer clearly...

Andrew Clemson Professor Hitchcock ENG 111
10 March 2023

The Ever-Worsening Housing Crisis in Hawai’i
Hawai’i is, without a doubt, one of the most beautiful places to live in the United States.

But as they say, sometimes “it’s not always rainbows and butterflies.” The beauty of Hawai’i doesn’t come without a price – one that many people can no longer afford to pay. With arguably the highest cost-of-living and an average wage comparable to of the rest of the less expensive states, it’s no wonder people are struggling to make ends meet in “The Aloha State.” The lack of regulations on short term rentals and out of state investors only intensifies the problem. Unfortunately, there are many roadblocks facing affordable housing solutions, so correcting the issue is challenging. The combination of these issues makes up the terrible recipe to Hawai’i’s dire housing crisis.

One of the main factors that contributes to the housing crisis in Hawai’i is the discrepancy between the cost of living and resident’s income. Hawai’i has one of the nation’s highest costs of living, but unfortunately the average resident doesn’t earn a salary that can keep up. Due to its geographical components, many things must be imported, making them more expensive. This includes everyday items such as food and fuel. Additionally, an electric rate three times more than most states, and having one of the highest income tax rates, Hawai’i is at the top of the cost-of-living based list (“Electricity Rates by State (March 2023): Chooseenergy.com®.”). According to MIT, a single-income family of four would need to make

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over $100,000 per year, or $48.57 per hour for it to be considered living wage (“Living Wage Calculator – Living Wage Calculation for Honolulu County, Hawaii”). In most cases, both parents need to work, sometimes multiple jobs, to make ends meet. These families can expect to pay around $10,000 per child for childcare, making the total salary necessary much higher (“Living Wage Calculator – Living Wage Calculation for Honolulu County, Hawaii”). For comparison, Hawai’i and San Francisco have similar costs of living. Both places are far more expensive than the US average. According to a well-known job board, the average salary in San Francisco is around $94,000 per year (“Average Salary in San Francisco, Ca $94,259 (Mar 23) – ZIPRECRUITER”). On the same site, they state the average salary in Hawai’i is $52,000 (“Average Salary in Hawaii ($52,285 Avg – Mar 23) ZIPRECRUITER”). This truly highlights the major discrepancy between the cost of living and the average wage in Hawai’i.

Another main contributor of the housing crisis in Hawai’i is the lack of regulation on short-term rentals and non-resident investors. Out-of-state investors accounted for over a quarter of all home purchases in Hawai’i in the first nine months of 2022 (“Proposal Aims to Tackle Hawaii’s Affordable Housing Crisis by Targeting Non-residents”). Many of these people will visit occasionally and use them as short-term rentals the rest of the year. Additionally, some Hawai’i residents are purchasing second properties to become STRs that will be advertised year- round. Most investors take advantage of this because renting short-term is typically much more profitable than having a long-term rental. It also allows owners to visit whenever they choose. The government of O’ahu currently has some regulations on short-term rentals, attempting to keep them only in the three designated resort areas, Waikiki, KO’Olina and Turtle Bay. There are a few instances in which an exception was granted for rentals outside of those boundaries,

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but lack of enforcement means that there are thousands operating without a permit. According to Inside AirBnB, less than 10% of O’ahu rentals advertised on this platform have the proper permitting (InsideAirbnb: Hawaii). Additionally, COVID-19 brought an inundation of remote workers from other states. Though these people were still renting longer terms than vacation rentals, they contribute to the skyrocket of rental prices. Many come from areas that offer higher salaries and paying a lower income tax on those wages allows them to afford much more per month for rent. I watched my neighborhood transform because of this. Many friends of mine were given notice, only to be replaced by someone that could pay $1200 more each month. The building next door raised rent $800, forcing the families out.

The other major factor that adds to the strain is the lack of affordable housing. Governor Josh Green proposed the Emergency Housing Plan for Hawaii in April 2022 when he was holding the office of Lieutenant Governor. He states, “


We have reached a point of crisis, with a housing deficit that requires at least 50,000 new units for low- and middle-income families right now just to meet current demand and maintain our workforce”




(“An Emergency Plan for Hawaii’s Housing Crisis – Dr. Josh Green: Trusted, Caring Leadership”). Unfortunately, there are many issues hurdles affecting affordable housing in Hawaii. First, these projects can take nearly a decade to complete (“Hawaii Public Housing Authority – State of Hawaii”). This makes keeping up with demand very difficult. Secondly, the average wait time on the waitlist for affordable housing is between two to five years (“Hawaii Public Housing Authority – State of Hawaii”). Depending on the severity of the situation, many people are forced to move off island or become houseless in that time. Currently, the need is so high on O’ahu that the waitlist has been closed (“Hawaii Public Housing Authority – State of Hawaii”). Finally, the regulations

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surrounding these projects only stipulate that only a certain percentage of the new units be considered “affordable”. The percentage is based on the locality. For example, the newly developed Koa Ridge master planned community in Waipio brags that 30% of homes offered in “within the affordable housing range” (“Hawaii Real Estate - Castle and Cooke Hawaii”). This means that for their 576-acre plot, only about 1000 of the 3500 housing units will help low- income families (“Hawaii Real Estate - Castle and Cooke Hawaii”).

The severity of the housing crisis in Hawaii is almost incomprehensible. If action isn’t taken, the affects could be catastrophic. The discrepancy between the outrageously high cost of living and low average wages is a main contributor. Additionally, the lack of regulations for short-term rentals and out-of-state investors and the hurdles associated with affordable housing exacerbates the problem. If law makers don’t step in, it won’t be long until Hawai’i starts losing workers to the mainland in record numbers. Teachers, construction workers, nurses, tourism workers etc. can no longer afford to stay. Without these workers, the Hawai’i’s economy will collapse.

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Works Cited

“Average Salary in Hawaii ($52,282 Avg - Mar 23) ZIPRECRUITER.”




ZipRecruiter


, Mar. 2023, https://www.ziprecruiter.com/Salaries/--in-Hawaii.

“Average Salary in San Francisco, Ca $94,259 (Mar 23) - Ziprecruiter.”




ZipRecruiter


, Mar. 2023, https://www.ziprecruiter.com/Salaries/-in-San-Francisco,CA.

“Castle & Cooke Homes Hawaiʻi.”




Hawaii Real Estate - Castle & Cooke Hawaii


, https://www.castlecookehawaii.com/Page/Residential.

Davis, Chelsea. “Proposal Aims to Tackle Hawaii's Affordable Housing Crisis by Targeting Non-Residents.”




Https://Www.hawaiinewsnow.com


, 18 Jan. 2023, https://www.hawaiinewsnow.com/2023/01/19/proposal-aims-increase-housing-locals-by- targeting-non-residents/.

“Electricity Rates by State (March 2023): Chooseenergy.com®.”




(March 2023) | ChooseEnergy.com®


, Red Ventures, 7 Mar. 2023, https://www.chooseenergy.com/electricity-rates-by-state/

“Federal Public Housing.”




Hawaii Public Housing Authority - State of Hawaii


, http://www.hpha.hawaii.gov/faqs/publichousing.html.

“Hawaii.”




Inside Airbnb: Hawaii


, 15 Dec. 2022, http://insideairbnb.com/hawaii/
“Living Wage Calculator.”




Living Wage Calculator - Living Wage Calculation for Honolulu

County, Hawaii


, https://livingwage.mit.edu/counties/15003.

[email protected]. “An Emergency Plan for Hawaii's Housing Crisis - Dr. Josh Green: Trusted, Caring Leadership.”




Dr. Josh Green | Trusted, Caring Leadership


, Josh Green for Hawaii, 15 Apr. 2022, https://joshgreenforhawaii.com/an-emergency-plan-for-hawaiis-housing- crisis/.