The Homemaker

It may take a while. It may be difficult and uncomfortable, but Hawaii HomeOwnership Center’s Kendall Hirai says that you can own a home

March, 2007

When the Honolulu Board of Realtors releases its monthly statistics on single-family home and condominium resales throughout Oahu, Kendall Hirai, executive director of the Hawaii HomeOwnership Center, studies the report carefully. Then he discards it.

“I don’t care what the market is doing. It’s always the same—peaks and valleys,” says Hirai, with a shrug. “So from our perspective it’s irrelevant.”

It’s a startling statement, especially since it is coming from someone who runs an organization that provides educational assistance and counseling services to people looking to buy homes, usually for the first time. But, according to Hirai, price is only one of the factors in homeownership—and it’s not even the most important. Rather, buying a home, especially a startup one, is about goal setting, financial discipline and good decision making, all skills that aren’t affected by the ebb and flow of the Hawaii real estate market.

The nonprofit Hawaii HomeOwnership Center, funded by contributions from nearly 50 private and government organizations and individuals, opened its doors in late 2003 with a staff of one (Hirai) and the mission to increase the rates of homeownership in Hawaii by teaching the aforementioned skills. It’s a daunting task, considering Honolulu’s cost of living is consistently one of the highest in the nation and statewide wages are only a little better than average ($36,300, 19th highest in the nation). Maybe, as a result, according to the U.S. Census, Hawaii homeownership ranks 49th out of the 50 states, with a rate of 60.6 percent, almost nine points below the national average. Only New York, at 54.8 percent, is lower.

However, Hirai can counter those numbers with a few of his own: After just 15 months in operation, the center signed more than 300 members on Oahu and successfully helped 59 families become new homeowners. Today, a little more than a year later, the center, which has a staff of 11, has about 1,000 members and has helped more than 280 families become homeowners. Worthy of note is that the average median income of a HomeOwnership Center buyer is $57,050, just 84 percent of the state’s average for a household of four. Some members have purchased homes with incomes as low as $30,659, or 43 percent of Hawaii’s average median income.

In 2007, the Hawaii HomeOwnership Center, which also has staff on Kauai, will expand operations to the Big Island. By year’s end, Hirai expects to be servicing a membership of 1,750 families. In 2008, the center will be doing business on Maui, where Hirai expects a similar increase in business. However, the center’s most significant number may be its smallest: zero, which is the number of its buyers who have lost their newly purchased properties to foreclosure.

“Oh, yeah, it’s tough here [Hawaii] and it’s tough now. But our grandparents had it tough, too. They just didn’t have the kind of distractions that we have—the constant competition for our dollars,” says Hirai. “Many of our families come in and tell us that they don’t make enough to save. We say: ‘OK, that’s a fair assessment. So where is your money going?’ The usual answer is: ‘I don’t know.’”

After a one-hour orientation, clients pay a $100 lifetime membership fee ($50 of which is refunded when they purchase a home), and meet with a center counselor in a confidential session to review their credit scores and other financial information, and develop a strategy for homeownership. Then they attend two, four-hour courses taught by real estate and lending professionals. Finally, members meet again with their counselors for one-on-one sessions to hammer out the big and little details necessary to get them mortgage ready. The process can take weeks or even years, depending upon the client and the strategy.

“This is how you do it: You calculate what’s coming in, you figure out what your obligations are and then you see what is left over and decide what you’re going to do with it,” says Lehua Rosa Malott, one of HomeOwnership’s counselors. “I always ask my kids at home, if you buy the candy bar today, can you buy that big toy tomorrow? It really is that simple, even for adults.”

Malott, a recovering ice addict, practices what she preaches. After two years of saving, she bought her first single-family home in Makaha. At the time, she had a gross income of $1,800 a month. A little more than a year later, she purchased a condominium in Kalihi to be closer to work and, earlier this year, the single mom closed on her third property, a condo in Kailua. Her gross income is still below the state’s median.

“They [the counselors] are very pragmatic. There are no judgments. They’ve been there,” says Rose Winn, a 26-year-old project administrator, who began attending HomeOwnership classes last November. “It’s just a lot of practical information about the process and about credit and all the things that can affect it.”

Besides teaching the principles of financial discipline, Malott and the center’s other counselors help “manage” their members’ expectations, a move that helps break what Hirai calls a “cycle of hopelessness.”


Hawaii HomeOwnership Center’s Kendall Hirai says that damaged credit can be repaired relatively quickly with good financial habits. By following three simple rules people can improve their credit score by as much as 100 points in a year:

1> Pay your bills on time.

2> Carry low or no balances on your credit cards.

3> Use your credit cards only for large, planned purchases that you pay off as soon as you receive the bills.

“Reports announcing the median sales price of homes cause a lot of despair,” says Hirai. “But the median simply means that half of the homes sold were above the number and half were below. How many people buying that $600,000 house in Mililani Mauka are first-time home buyers? Not many. You can dream about that house, that’s fine. We’re just saying that it may take you four or five transactions to get there.”

According to Hirai, many people are discouraged by these seemingly unreachable home prices, so they throw their hands up and purchase something that they think they can afford, like a new truck, a trip to Las Vegas, or a new television, purchases that often put them deeper in debt and further jeopardize their credit. Homeownership then becomes even more unreachable.

Hirai stresses that racking up impressive homeownership statistics isn’t the center’s goal. Those are just numbers, too. Rather, it is educating and equipping people with the tools to make decisions that will improve their lives. He points out that many members leave their counseling sessions and decide that homeownership isn’t right for them—yet.

“It’s all about being in control of your money and not the other way around,” says Hirai. “It’s about being prepared. Up market? Down market? It doesn’t matter. When opportunity knocks, you’ll be ready.”

Case in point is Winn, who, 10 days after closing on her $157,000 Waikiki studio apartment learned that her building was converting from a leasehold property to a fee simple one. Her first call was to the center.

“I asked them if they knew all about lease-to-fee conversion,” says Winn. “They said: ‘Yes, come in, let’s talk.’”

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