Hawaiʻi’s Affordable Housing Crisis

The High Cost of Our Affordable Housing Shortfall

July 2014

Executive Summary

This report examines the impact of Hawaiʻi’s extraordinarily expensive housing market on working families, who face the highest housing costs in the nation. In addition to Hawaiʻi’s housing being expensive in actual dollars, many families simply do not earn high enough wages to afford market rents.

Average rents in Hawaiʻi increased by 45 percent between 2005–2012, while average wages increased by only 21 percent. More and more households struggle to afford even a modest place to live in Hawai‘i, which has the highest “housing wage”—the amount a full‐time worker would have to earn to afford a two bedroom market rental—at $31.54 an hour.

Despite the economic downturn, rents have continued to rise, and demand for housing—including luxury units—has increased. Hawaiʻi will need a total of 19,000 units by 2016 to meet the demand for low‐income households. Yet few affordable units are being developed to meet this need.

We face the highest rate of homelessness in the nation, in large part due to the lack of affordable housing. Ensuring an adequate supply of housing within our residents’ means is the only way to prevent and end homelessness.

Housing is the single biggest household expense in Hawaiʻi, and for those living in poverty whose budgets are already stretched precariously thin, a lack of affordable housing can place them at risk of homelessness. Many who are already experiencing homelessness have no options for permanent affordable housing. For those who have been chronically homeless, stable housing is a critical foundation for overcoming the underlying issues that led to their homelessness.

Affordable housing matters in our community. It affects us all. Without it, workers who are critical to our economy cannot afford to live in Hawaiʻi. The ability to afford housing impacts far more than just having a decent, safe place to live. Affordable housing is associated with better health, childhood development, and educational achievement because it frees up a family’s budget for more nutritious food, access to medical care, and quality childcare, and it provides stability where family members can thrive.

Decent, affordable housing has long been a concern in Hawaiʻi, but the magnitude of this crisis has only continued to grow. This report illustrates how dire Hawaiʻi’s affordable housing shortage is and emphasizes the need for immediate action to ensure that all families can live in safe, decent and affordable housing.