Affordable Housing for Residents

Affordable Housing for Residents 

The way it is

Average Home Sale in 2018 = $925,000 (requires income of $225,000)

  • Factors used in calculation: HUD’s 2018 median family income for the County of Maui $81,400 American Community Survey 5-Year Estimate 2012-2016 median family income for Hana $44,700 (from the Hawaii State Data Center) Est. 2018 Hana median family income $44,700 (Rounded to the nearest $10) https://www.mauicounty.gov/1825/Affordable-Sales-Price-Guidelines
  • The median price of the homes sold over the last 8 months is $747,000. The average sales price for the 11 homes that closed is $1,837,563. Over the period between July 1, 2016 and March 15, 2017, the median price of homes sold was $590,000 and the average price was $840,000. Now its at $925,000. These charges aren’t solely a reflection of increases in value. They are also due to a higher number of more expensive sales and less inventory and activity at the lower price points in the market. http://mauinow.com/2018/04/05/pa%CA%BBia-real-estate-market-update-march-2018/

 

The average household income is = $56,000/year (can afford only a $220,000 house)

·
Median household income (in 2016 dollars), 2012-2016                      = $68,777
$68,777
·         Per capita income in past 12 months (in 2016 dollars), 2012-2016      = $30,599 $30,599

https://www.census.gov/quickfacts/fact/table/mauicountyhawaii/PST045217

  • Based on that data, here are the top five states where you need to make almost or over $100,000 a year to afford the average home:

Hawaii

Minimum annual income: $153,520
Average home value: $610,000

https://www.cnbc.com/2018/04/09/5-states-where-you-need-a-six-figure-income-to-buy-an-average-home.html

There are several thousand illegal vacation rentals averaging $200/night, greatly impacting affordable housing stock This is a key reason the island has exceeded its carrying capacity resulting in overcrowding and traffic.

64% of Maui vacation rental units owned by non-Hawaii residents.

https://airbnbwatch.org/in-your-area/hawaii/

  • Hawaii
    > Homeownership rate: 57.7 percent
    > Median home value: $517,600 (the highest)
    > Population: 1,363,621

The rate of housing units in multi-unit structures, such as apartments, is more than 40 percent in Hawaii. The national rate is just 25.9 percent. The state has the highest median home value in the country, making homeownership very expensive. Additionally, approximately 70 percent of the state’s population lives within the Honolulu metropolitan area. Hawaii is home to the small county of Kalawao, which has a homeownership rate of just 1.4 percent — the lowest in the country.

http://www.nbcnews.com/id/44822131/ns/business-real_estate/t/states-highest-lowest-homeownership/#.Wzca39JKjIV

  • “…That difference – homes are not hotels – has raised several big issues, including: how B&Bs and room, condo and house rentals are changing the character and quality of life in Hawaii’s residential neighborhoods (which Hawaii Business has covered repeatedly), and how these nonhotel landlords often fail to collect or pay the excise and hotel room taxes, depriving the state and counties of key sources of revenue…”

“…But, as (Hotel association president) Hannemann suggests, it appears that many private operators do not collect the taxes, or report the revenue to the government, even though they are breaking the law. Hannemann says that’s because “There is no manpower and a lack of enforcement.”

Rick Maxey is the owner of several beach property rentals, including Lanikai B&B on Oahu, one of the few county-licensed B&B operations in the area. He says that, as a licensed and tax-paying operation, his frustration stems from how easy it seems to be for others to get away with noncompliance. “There is a substantial amount of potential tax revenue that could be captured with enforcement,” Maxey says.

How Much Unpaid Taxes? We Try the Math

            https://www.hawaiibusiness.com/lodgers-and-tax-dodgers/

·         The report released Wednesday by the Hawaii Appleseed Center for Law and Economic Justice found that the number of short-term vacation rental units in Hawaii rose 35 percent over the last two years — from 17,000 units in 2015 to 23,000 in 2017.

Victor Geminiani, the center’s co-executive director, said that means 1 in 24 homes in Hawaii is a vacation rental

Geminiani added that the proliferation of vacation rentals in Hawaii is making the state’s housing crisis much worse.

He said of the state’s 23,000 vacation rentals, 53 percent of them are owned by non-residents.

The report shows on Kauai, 1 in 8 homes is a vacation rental.  And on Maui, where non-residents dominate the housing market, it’s 1 in 7. (It’s a staggering 1 in 3 in Lahaina.)

“On Maui, there are about 9,000 units that are being used as vacation rentals. Only about 300 are actually legal, so it just indicates the extreme that can happen on a particular island,” said Geminiani.

http://www.hawaiinewsnow.com/story/37791161/report-1-in-24-homes-in-hawaii-is-now-a-vacation-rental

The rental market for local residents is on average $900/month for a room with shared bathroom. With the minimum wage of $10.20/hr, for a single person this means up to 60% of income goes to rental. The family rentals are on average $2,200/month.

  • (Published: Thursday, December 15th 2016)

“To rent a 2 bedroom apartment, you need to make about $34/hr. While the average renters wage is more around $15/hr.”

“Hawaii has the highest homeless rate in the nation; and, we have been seeing an increase in the last 7 years. The majority of states have seen homelessness go down. What is going on here that is different in other states?”

“There is a need for 64,000 units to be built by 2020, to deal with our housing crisis. That means government and private sector need to come together to find solutions… It’s estimated that about a quarter of them need to be affordable for people making less than the average income.” ~Nicole Woo; SR. POLICY ANALYST, HAWAII APPLESEED

Housing affordability; 6 out of 10 people in Hawaii are overly burdened: Honolulu is ranked #99 out of 100 cities.

http://www.hawaiinewsnow.com/story/34066684/honolulu-ranks-among-least-affordable-cities-for-renters

  • Maxi Moto, who has lived on the North Shore since the 1970s, said rent prices have contributed to several bouts with homelessness.

“You can forget it,” said Moto, who lives in a van in a pasture without access to running water or electricity. “You can’t afford $1,500 when your disability income is $750 a month.”

http://keepitkailua.com/wp-content/uploads/2015/01/Star-Advertiser-12-29-14-Vacation-Rentals-Hurts-Housing-Supply.pdf

Living Wage Calculation for Maui County, Hawaii    http://livingwage.mit.edu/counties/15009

 

Many long term residents are experiencing their ‘Ohana break up as their children cannot afford to live in Maui County. We can stop this and turn it around.

  • National Low Income Housing Coalition :

Working at minimum wage $10.10/hr; Each week you have to work 109hours; To afford a modest 1 bedroom rental home at Fair Market Rent.

State Facts

MINIMUM WAGE

$10.10

AVERAGE RENTER WAGE

$16.16

2-BEDROOM HOUSING WAGE

$36.13

NUMBER OF RENTER HOUSEHOLDS

192,176

PERCENT RENTERS

43%

 

http://nlihc.org/oor/hawaii

http://nlihc.org/involvement/local/state/HI

 

 

What we can do about it

Elect Maui County Representatives who will resolve this growing housing crisis. Do not support the “good old boy” approach that blocks positive actions on this issue.

  • Have a goal of creating 1,500 affordable housing units per year until the housing crisis is met.

 

 

  • Use county money and bonds to acquire and develop the affordable housing stock.
  • Make taxation pono by reflecting the tax rate of Oahu on resort condos and hotels of $12.90/1,000 versus the Maui rate of $9.30/1,000. The adjusted rate would add $35,000,000 to the budget per year that could fund the county’s involvement.
  • Enforce short term illegal housing/rental vacation regulations. Collected fines can further support affordable housing.
    • WAILUKU, Hawaii (AP) – A Maui committee has approved a charter amendment that would increase the penalty for illegal vacation rentals to $20,000.

The Maui News reports the Maui County Council committee voted Tuesday in favor of the measure that increases the fine for illegal transient accommodations and tacks on $10,000 for each day the unlawful operation continues. http://www.hawaiinewsnow.com/story/38371507/officials-advance-higher-penalty-on-illegal-vacation-rentals

  • HONOLULU (HawaiiNewsNow) – State lawmakers are once again looking at ways to control Hawaii’s growing vacation rental industry while cracking down on illegal operators.

The latest senate proposal allows vacation rental brokers — including websites likes Airbnb — to collect general excise tax and hotel room tax from their hosts for the state.

http://www.hawaiinewsnow.com/story/37400055/lawmakers-try-again-to-regulate-growing-vacation-rental-industry

 

 

  • Allow larger and more ‘ohanas in urban zoned parcels for affordable housing.
  • Give tax breaks to second home and investment home owners who rent long term to residents. Provide incentives for providing affordable rental units.
  • Raise tax rates substantially on investor owned homes which are vacant or used only by non-residents.