“Home for Sale” Sometimes Means Renters are Displaced

About 40% of Hawai‘i households are renters. Their relationships with their landlords can be friendly and supportive. But this two-part report examines when the wants and needs of tenants and landlords conflict, with perspectives from both sides.
A view of Honolulu apartment buildings and Diamond Head.
Photo: Joelle Cabasa
THE GIST
  • Local renters are sometimes displaced because of sales or renovations by their landlords. It’s unclear how often this happens, but we’ve heard stories from renters on O‘ahu, Kaua‘i, Maui and Hawai‘i Island. Click here to jump to this section >>
  • Hawai‘i’s hot housing market has encouraged many landlords to sell or renovate their units. Some lost money during the pandemic because of since-expired federal and state moratoriums that forbade evictions, even if tenants did not pay their rent. Click here to jump to this section >>
  • Displacing a tenant so a landlord can sell or renovate is generally legal so long as the landlord gives proper written notice. Click here to jump to this section >>
  • Some housing and tenant advocates worry about how displacement impacts renters’ lives and further gentrifies communities. Click here to jump to this section >>
  • Responses being discussed include policies that require just-cause evictions; that prohibit landlords from refusing housing vouchers and prohibit other forms of income discrimination; and having the state purchase apartment complexes to keep rents there affordable. Click here to jump to this section >>

Part I: Home Sales and Renovations Can Force Renters to Move

Note: This story has been updated to include further comments from a former Waiakea Villas tenant.

Lynne felt lucky when she started renting a single-family house on Maui’s south side three years ago. It was bigger than her previous rental and she enjoyed sit-down dinners there with her family, and getting a dog.

She was devastated when her landlord this summer bumped the rent 28% and said they planned to renovate the house. Lynne immediately paid the extra cost, using money that would have been in her Christmas fund. She didn’t know then that the landlord was supposed to give her 45 days’ notice before increasing the rent.

“What that means is I have to pack up my house, possibly put it in storage, give my dog to the humane society and go live at the shelter where the bedbugs are really bad,” she says. “You see the degression that can happen so quickly, and it just really breaks my heart that it was so easy to do.”

When we spoke in June, Lynne and her family were preparing to move to the other side of the island because of the increased rent. She might have to find a different job, and she’s not sure yet whether her daughter will have to attend a new elementary school.

Other local renters have found themselves in similar situations, often surprised that they must move so their units can be sold or renovated. Most recently, the Waiakea Villas in Hilo and the Lahaina Crossroads Apartments made headlines when their new owners wanted to push out tenants for renovations. Such stories across Hawai‘i have been shared on social media and with nonprofit workers and lawmakers for years.

 

Growing Divide  

If landlords give their tenants proper notice, they can legally terminate leases to renovate or sell their units. Landlords can also raise the rent by any amount.

But many tenants, lawmakers, housing advocates and nonprofit workers worry about the impacts on displaced renters, especially as prices for housing and other essentials increase and few new rentals are being built. They say these renovations and sales are further gentrifying local communities and exacerbating the divide between who can and cannot afford to live in Hawai‘i.

09 2022 Renters House For Sale

The nonprofit Hawaii Data Collaborative estimates that 59% of households struggle to financially survive in Hawai‘i. The U.S. Census Bureau says about 40% of local households are renters.

“I think it’s a perpetual problem in a state where home values are so robust,” says Philip Garboden, a professor in affordable housing economics, policy and planning at UH Mānoa. “We don’t see big, sharp increases in renter income to the degree we see increases in homeowner prices.

“The dollars and cents of being a landlord compared to someone who cashes out, sells to a homeowner, sells to someone else, we need to be perpetually worried about here in Hawai‘i.”

 

Rising Rents

According to UHERO, UH’s Economic Research Organization, Honolulu rents have increased 11% over the last year; asking rents on Kaua‘i increased by 19%, and on Maui by 41%. UHERO cautions that the Kaua‘i and Maui information came from rental postings on Craigslist and may not be representative of the overall market.

Realtors say part of the reason for the rent increases is that landlords couldn’t raise prices during the pandemic-related eviction moratoriums – despite rising maintenance fees, association fees, utility costs and property taxes.

It’s hard to say how many local renters are being displaced due to renovations or sales. The state Department of Commerce and Consumer Affairs, which manages a landlord-tenant hotline, says it does not have anyone on staff who can address the issue.

Many tenants leave after receiving eviction notices, before any litigation, and those evictions are not tracked. Garboden adds that it’s hard to infer trends from larger apartment complexes, where these types of cases often make the news, and there’s no good data for individual rentals of condos and single-family homes.

Hawaii Business Magazine spoke with renters, landlords, property managers, attorneys, lawmakers and nonprofit workers to better understand the impacts that selling and renovating rentals have on local renters. Some renters in this story have asked that we refer to them only by their first or middle names. They fear that speaking out could jeopardize their work, relationships with new landlords or efforts to find new rentals.

 

Displaced Tenants

Steven K. Scott, 68, and his wife have lived at the 20-unit Lahaina Crossroads Apartments just mauka of Front Street for 14 years. They thought they might finish their lives there.

This summer they started hearing that tenants would have to vacate for floor-by-floor renovations. The building had been purchased by new owners, and tenants heard that rents would nearly double after construction. The owners ultimately postponed renovations until January 2023, but Scott says the experience has been nerve-wracking.

They still wonder where they’re going to go when rents are so high. The couple had been paying $1,640 for a one-bedroom and have seen other nearby apartments go for $2,200.

“At 68, I know I’m just poor me, poor me but I never pictured getting to this point in my life,” he says.

Waiakea Villas resident Kristen Alice says a similar situation occurred at her Hilo condo complex in the summer of 2021, when several tenants were told via text messages that they’d need to vacate after the Covid eviction moratorium expired in August. The owner of most of the condos, Tower Development, planned to renovate.

A zoomed in view of the Waiakea Villas

Many of the units at the Waiakea Villas were recently remodeled by Tower Development. | Photo: Joelle Cabasa

The Waiakea Villas tenant community includes seniors on fixed incomes, individuals with disabilities and single-parent families. Some use Section 8 vouchers to pay their rent; they were told the company would not accept them for the renovated units.

Alice is also the director of community relations at Hope Services, a nonprofit homeless service provider that had placed several Section 8 tenants at Waiakea Villas. She’s since seen a big turnover among tenants, and she worries more renters elsewhere on the island will be displaced under similar scenarios.

It was hard to find housing even before the pandemic, and the island’s homeless shelters almost always have waitlists, she says.

In 2018, 48% of Hawai‘i Island residents were either “asset limited, income constrained, employed” or living in poverty, compared with 42% for the overall state. These working families barely make enough to afford necessities like housing, food, transportation, health care and child care.

 

Hot Housing Market

Hawai‘i’s housing market the last two years has been defined by low interest rates, a shrinking supply of homes for sale, and lots of demand from residents and nonresidents.

Amanda Han is COO of Cornerstone Properties, which manages over 600 rental properties on O‘ahu. She says she saw many landlords sell quickly after receiving multiple offers, some more than their asking prices.

Covid rental restrictions also played a role. A 16-month prohibition on evictions for nonpayment of rent meant many landlords struggled financially when they couldn’t collect rent, says Chad Takesue, 2022 president of the Honolulu Board of Realtors.

“Coupled with a good time to sell, it’s like, ‘You know what, I don’t want to hold on to this anymore and put another tenant in. Because basically my homeownership rights got taken away, I couldn’t collect rent or seek another tenant who could pay.’ I think that impacted a lot of people to finally sell that asset.”

He adds that it’s often easier to sell a property when it’s empty because the seller can schedule showings without having to disrupt the tenant.

It also provides sellers with more flexibility in the type of buyers they can attract. Owner-occupant mortgages require the buyer to occupy the property within 60 days of closing. Having a tenant with a lease term of more than 60 days tends to result in a smaller buyer pool made up primarily of investors.

Hawai‘i investors tend to hold rental properties for the appreciation gains rather than the cash flow because the acquisition costs are high, says Matt Brummel, president of Rental Property Management Hawai‘i, which oversees 30 O‘ahu properties.

In many mainland neighborhoods, an investor could put 20% or 25% down on a single-family rental, mortgage the rest of the purchase price, and probably enjoy a 10% to 15% monthly return after their mortgage payments and expenses, he says. In Hawai‘i, an investor might lose money each month because the rent would not cover the mortgage payment and other costs.

Brummel says he faced that situation: He owned a two-bed, two-bath Makiki rental apartment and would pay $200 to $400 of his own money each month on maintenance and other necessities. But that made financial sense for him because his mortgage was being paid down by $800 a month and the property was increasing in value. He sold the unit in 2021 to help finance his business. He told his tenants that he wasn’t going to renew the lease and worked with them on the timing of when they’d have to leave.

Sales Figures Show How Many Tenants Affected

Renters Graph 1

This chart shows how many of the homes sold on O‘ahu over the past six years had tenants in them before the sale. However, there is no data on how many of those tenants were allowed to stay by the new owners, and there is no similar data for the Neighbor Islands.

Totals for Past Six and a Half Years

Single-family sales only, January 2016-June 2022

These charts add up the numbers on the chart above.

According to the Honolulu Board of Realtors, renters were living in 9% of the single-family homes and condos that sold in 2019 and 8.5% in 2020. That increased to 12.5% in 2021, and in the first six months of this year, it was 12.4%.

That’s almost 3,600 renter households in homes that sold on O‘ahu during those 3 ½ years, according to the board’s data. It is not clear how many of those renters were displaced because new owners sometimes keep existing tenants. Takesue says that while the board is unable to estimate the impact of landlords deciding to sell their tenant-occupied units, it’s important to remember that every situation is unique and reasons for selling vary.

Garboden says there’s no easy way to use the board’s data and estimate how frequently renters are displaced due to sales, but his sense is that most single-family rentals aren’t purchased with tenants currently occupying them.

The Honolulu board notes its data provides general insight but does not reflect all rental property sales. For example, while a property may have been used as a rental, a tenant may have vacated prior to it being listed.

Such data was not available for the Neighbor Islands.

According to the Lawyers for Equal Justice, 1,600 to 1,800 local households were evicted for various reasons in 2017. Garboden says Hawai‘i has lately been seeing about 150 evictions a month.

condo tenant-occupied sales oahu

Here are the five neighborhoods on O‘ahu with the highest percentage of tenant-occupied sales of condos from January to May 2022.

Renters Graph 4

Here are the five neighborhoods on O‘ahu with the highest percentage of tenant-occupied sales of single-family homes from January to May 2022.


Interested in how the writer put this story together?  Read “How We Covered One Aspect of the Rental Crisis” to learn about her process.


 

 

Renovated Rentals

The last couple of years was a good time for property owners to renovate, Takesue says, because they could take advantage of increased home equity to get loans to fund their projects. But he says rental property renovations are more likely to occur when tenants change and units are empty.

The exception is when renovations won’t disrupt the tenant. Matthias Kusch, a Hawai‘i Island landlord, kept his long-term tenant when he converted a duplex into a triplex and did other work, like repainting and reroofing.

Tower Development, which purchased 154 apartment units and 8 commercial units at Waiakea Villas in spring 2020, wrote in an email to Hawaii Business Magazine that the complex had not been renovated or properly maintained in over 30 years.

“The property was lender owned when Tower acquired it and in a dilapidated condition with roof leaks, mold, termites & roaches, plumbing and electrical problems and unsafe and unsanitary conditions,” the real estate investment company wrote.

“Tower renovated the units on an organic basis as the tenants vacated the units. In certain instances, there were a few tenants who were asked to move to a newly renovated unit to allow for Tower to renovate their unsafe and unsanitary unit that had county building code-related concerns. The only other tenants that were not renewed were criminals who were dealing drugs or conducting other criminal activities on the property.”

Former tenant Peter Veseskis says he never knew of any tenants engaged in criminal activities. “As far as I know there were a bunch of old ladies and women with children living there, no drug addicts, no drug dealers,” he says. He adds that tenants were pushed out so the renovations could occur. Tower Development did not respond to our requests to provide evidence that the company only evicted tenants engaged in criminal activities.

Thaddeus Marckesano, the resident property manager for the Lahaina Crossroads Apartments, did not respond to our requests for comment.

 

Required Notice

Hawai‘i landlords are required to give month-to-month tenants 45 days written notice if they want to terminate a rental agreement. Fixed-term leases either end by their own terms or convert to month-to-month agreements. Other circumstances, like when a tenant fails to pay rent or when a landlord wants to convert a unit into a transient vacation rental, have different notification requirements.

But during the pandemic, landlords could only issue 45-day notices to month-to-month tenants if they or their immediate family planned to move into the unit or if the unit was sold and the new owner gave the 45-day notice, writes Dan O’Meara, managing attorney for consumer and housing at the Legal Aid Society of Hawai‘i, in an email to Hawaii Business Magazine.

Renovations were not among the reasons for which a lease could be terminated, unless a unit would be uninhabitable without those renovations, he adds.

“Sure, you might have had enough time to pack your belongings but finding another place that you can afford in a climate where rents are going up, when housing is increasingly unaffordable, is not easy.”

Philip Garboden, Affordable housing professor, UH Mānoa

Deja Ostrowski and Fernando Cosio, staff attorneys with the Medical-Legal Partnership for Children in Hawai‘i, say some smaller landlords who weren’t aware of the nuances of the emergency proclamation issued 45-day notices during the pandemic. Those notices are not the same as court orders to vacate the units, but many tenants chose not to fight them in court and instead left within the 45 days.

“The idea of fighting their landlord and having that on their record, whether or not they prevail, is a very scary situation,” Ostrowski says. “And if the landlord wanted them out, I think a lot of people think, ‘They want me out. I need to make other plans or try as best as I can.’ ”

But generally, tenants can be legally displaced if their units are sold or renovated and proper notice is given and the landlord is not terminating the lease for discriminatory reasons, the Legal Aid Society and the Medical-Legal Partnership say.

The Legal Aid Society adds that those who receive government subsidies or live in public housing should reach out to the society if they find themselves in this situation as there could be additional legal issues.

 

Involuntary Moves

‘I‘ini Kahakalau and her family had been renting a single-family house mauka of Hilo for eight years. They treated it like a family home and cherished its proximity to the college campus when Kahakalau and her sister were in school and to the doctors for their grandmother. But their landlord wanted to sell, so they had to leave in December 2021.

“It’s disheartening,” Kahakalau says. The family feels fortunate to be able to move back to their Waipi‘o home, but it meant much longer drives for medical care.

Being displaced can be destabilizing and can push low-income and ALICE households into deeper financial stress, and has a cascading effect on social and emotional health, says Kimo Carvalho, VP for community impact at Aloha United Way.

According to the Census Bureau, nearly 55% of Hawai‘i renters are cost burdened, meaning they’re spending at least 30% of their household incomes on rent. Nearly 39% of local homeowners are cost burdened. The bureau’s data was based on five-year estimates from the American Community Survey.

07 2022 Hawaii Rentals Waikiki Neighborhood

Photo: Getty Images

“Sure, you might have had enough time to pack your belongings but finding another place that you can afford in a climate where rents are going up, when housing is increasingly unaffordable, is not easy,” Garboden says.

“People end up moving farther from where their work is, people end up moving farther from where their family ties are, their faith-based institutions, their kid’s little league, everything gets disrupted because you can’t assume that people can just find something in that neighborhood anymore or find something in that area.”

Carvalho says research shows that disruptions from frequent moves can impede children’s school performances and lead to declines in social skills and increases in behavioral problems.


Interested in how the writer put this story together?  Read “How We Covered One Aspect of the Rental Crisis” to learn about her process.


 

 

Search for New Homes

Hawaii Business Magazine asked renters who had been displaced due to their units being sold or renovated to share what it’s been like to move during this hot housing market. We received responses from 12 renters across the state.

Many say it’s been difficult. One Kaua‘i renter wrote that almost no rentals were available on the island, and that he’s seen rooms rent for $2,000 a month. He also came close to being scammed by a Craigslist rental advertisement. Another Kaua‘i renter thought he’d have to live in his car until his friends told him about an available unit.

Keri Meyer had been renting a house in Makawao for five years. She and her boyfriend were able to find a new rental close by, but they’re now paying $1,200 more a month.

“I’m grateful it did work out for us, but we didn’t know it was going to,” she says. “So the fear and the anxiety and kind of all those things that people go through, is valid.”

In Kailua-Kona, business owner Felis and her hotel cook husband have been looking for a new place to live for over a year after being pushed out of the two-bedroom condo they’d rented for 18 years. She initially made phone calls to Realtors every day, and they even bid on a few homes but were priced out each time.

“All that was just a roller coaster because your emotions just go, ‘Oh, potential, maybe we’ll have a place to live,’ and it’s ‘Oh, no,’ ” she says, adding that they also ran into scam postings for rentals and for-sale homes.

Makiki Neighborhood Board chairman and state Senate candidate Ian Ross conducted his search in the early days of the pandemic – when his hours had been cut 60% and both his roommates lost their jobs. The group looked for new places individually, but Ross says his decreased income and uncertainty about his job made it hard to determine what rents he could afford. He also had to limit his search to lower Makiki – the area he represents on the neighborhood board.

“I want to stress though that I didn’t hold any ill will towards the owners and the people who sold my unit,” he says. “But I was put in a very perilous position during a pandemic, and the uncertain economic future and trying to find a new place, under these really tight constraints, was very stressful.”

 

Increased Competition

Kusch, the Hawai‘i Island landlord, has built, remodeled and managed affordable rentals and homes on the island for 22 years. He says he’s seeing a lot more interest in his rentals than in the past – and it’s heartbreaking.

He received over 130 inquiries and 25 applications for a downtown Hilo unit. Normally, he’d receive 10 inquiries and one to three applications.

“You could tell people were searching because they came with their pay stub and credit report and employer letter and all these things, like you could tell they had been denied so many times that they were upping their game each time, learning to outcompete the next guy,” he says, adding that the experience was part of what motivated him to run for Hawai‘i County Council.

“And I made a lot of hard decisions as battalion chief and captain in the Fire Department over the years. But I couldn’t sleep at night. It really bothered me seeing this huge need.”

 

 

 

Part II: Housing Proposals Include More Protections for Tenants

As the cost of housing rises out of reach for more local families, some tenant advocates are recommending changes to Hawai‘i’s landlord-tenant laws and affordable housing policies.

Kristen Alice is one of those advocates. She is the director of community relations for Hope Services, a nonprofit homeless service provider on Hawai‘i Island and a resident of Hilo’s Waiakea Villas community. That’s where tenants made headlines in 2021 over worries they’d be kicked out after the Covid eviction moratorium ended so the new owner could renovate.

07 2022 Hawaii Rentals Manoa Valley From Waikiki

Photo: Getty Images

“I’d not consider renovating an apartment in order to gentrify a good cause,” she says. “The bottom line is, right now, the wants of outside investors are being prioritized over the needs of local people. I can’t think of anybody who would look at that objectively and think that that’s right.”

She and Hope Services have been researching ideas to create a tenant bill of rights to better protect local renters. They’re still in the early stages, but some ideas include policies that limit rent increases, allow evictions for just causes only, and protect renters from sexual harassment.

Other housing advocates and lawmakers have proposed ideas like prohibiting landlords from refusing housing vouchers, having the state or county purchase apartment buildings to keep the rents affordable, and building more subsidized and unsubsidized rentals.

 

“Just Cause” Evictions

State Rep. Amy Perruso says she’s blown away by the gentrification that’s occurred in working-class O‘ahu communities that she represents, such as Launani Valley, Whitmore Village and Wahiawā, and she’s seen many renters displaced.

Renter displacement in her district seems to happen most often with single-family rental homes, where tenants have fewer opportunities to connect and organize compared to those in apartment buildings. She proposed a just-cause eviction bill, HB 1861, this past session to help give tenants more power and recourse. The bill did not pass.

“We pride ourselves in being a democracy state, but really they (the laws) are incredibly repressive and very much protect the privileged,” she says.

Just-cause eviction policies limit the reasons a landlord can evict a tenant or not renew a lease. California, New Jersey, Oregon, Washington and New Hampshire have enacted statewide just-cause policies, according to the National Low Income Housing Coalition. Several cities have their own versions.

Perruso’s bill distinguished between two types of evictions: At-fault just cause includes things like a tenant failing to pay rent or engaging in criminal activities, and no-fault just cause includes reasons like the landlord wanting to move into, sell or renovate the rental, or convert it into a condo or vacation rental. Under the bill, landlords terminating a lease for no-fault just cause would have to pay a tenant one month’s rent or waive the final rent payment.

Tina Grandinetti, Perruso’s chief of staff, says one indirect benefit of having a local just-cause eviction policy is that it would help provide data on tenant displacement. “Our picture of what displacement looks like in Hawai‘i, if we just look at the number of evictions that happen, it’s like totally off base,” she says.

Evictions are typically only tracked through summary possession cases in court, but many tenants leave before they get to that point, says Philip Garboden, UH Mānoa’s affordable housing professor. It’s unknown how many evictions go uncounted in the Islands.

“When we think about tenant protections, when we think about helping families stay in their unit longer, it’s not because people have a negative crusade against landlords,” he says. “It’s what can we do to ensure that we’re protecting the most vulnerable people from pretty miserable, negative life experiences around these moves.”


Interested in how the writer put this story together?  Read “How We Covered One Aspect of the Rental Crisis” to learn about her process.


 

 

Section 8 Discrimination

The state Legislature this year passed a bill, SB 206, that would prohibit discrimination against renters who have housing vouchers, like those from the federal program known as Section 8. Alice says the issue came up at Waiakea Villas in 2021 when several Section 8 tenants say they were told by their landlord that they wouldn’t be allowed to rent renovated units.

Waiakea Villas in Hilo

The Waiakea Villas in Hilo, Hawaiʻi. | Photo: Joelle Cabasa

The bill was signed into law in July. The new rules only apply to landlords who own more than four rental units. A court must determine whether a landlord has violated these rules, and the penalty can be as high as $2,000 for a first-time violation and $2,500 for a subsequent violation.

Alice says the bill is a step in the right direction because Hawai‘i previously did not prohibit source-of-income discrimination. But the bill doesn’t provide legal counsel for tenants who want to sue, and the amount they can recover is so low that it’s not worth the effort of going to court.

According to a 2018 report by Lawyers for Equal Justice, only about 5% of tenants were represented by counsel in eviction court in Hawai‘i in 2017. About 70% of landlords were represented by counsel.

 

Keeping Rents Affordable

Another proposed policy is to have the state or county purchase apartment complexes to keep the rents affordable in perpetuity.

That’s being discussed as an option for the Lahaina Crossroads Apartments, which made news in June when tenants feared being pushed out so the building’s new owners could renovate and possibly increase rents to market rates. In early July, the Maui County Council adopted a resolution to authorize the county to purchase the 20-unit building so rents would remain affordable.

In 2019, the state stepped in to purchase the land under the 142-unit Front Street Apartments to prevent 250 low-income tenants from being displaced. It was built in 2001, and the complex’s owner, Front Street Affordable Housing Partners, was required to keep the units affordable for 50 years in exchange for state tax credits. But in 2015, the owners wanted to raise rents to market prices.

The state purchased the land under the complex in 2019 for nearly $15 million. This summer, the state signed a new 75-year ground lease with the landlord, who will pay lower rates in return for affordable rents for the tenants.

Rep. Angus McKelvey, who represents West Maui, Mā‘alaea and North Kīhei, recently met online with housing advocates to talk about the Lahaina Crossroads and an apartment building in Wailuku that faced a similar situation.

He is running for state Senate and says this approach of having the government purchase apartment buildings could be used for other older affordable complexes in need of renovations. The county could contract with a nonprofit to renovate the buildings and raise rents more modestly than a private sector entity, he says.

“The state government needs to take a much more … radical, proactive approach to try to rein in this speculative behavior to areas where it belongs – like high-end luxury neighborhoods – and try to take back and preserve the units that are affordable or were built as affordable now,” he says. “And we need to hyperaccelerate the building of affordable in perpetuity – and that’s really a key word – rentals and houses.”

 

More Solutions Needed

Deja Ostrowski, staff attorney with the Medical-Legal Partnership for Children in Hawai‘i, says she welcomes the new conversations she’s heard about creating regulations that provide housing security for residents by protecting existing housing and focusing on community.

“I’m glad to see that conversational shift to talk about … housing justice and housing security,” she says. “Unlike any other place, we’re on a tiny island and we can’t just build ourselves out of the problem. And I think we need a very in-depth discussion about what we’re doing with the resources we already have here, instead of just talking about building shiny new.”

But some say that Hawai‘i needs to have some bigger conversations about how it wants its housing market to function and who it wants the market to function for.

“If we don’t step in and really voice our concern and try to do something about this now, I hate to see what Maui and the rest of Hawai‘i will become in the future.”

Stan Franco, President, Stand Up Maui

Enhanced tenant protections are important for the well-being of tenants, but they ultimately won’t be enough if Hawai‘i’s housing values continue to rise far faster than people’s incomes, Garboden says.

“If you don’t have enough affordable housing, you don’t have enough subsidized housing, you don’t have enough housing in general, over time you’re still going to lose people, people are still going to get displaced,” he says. “So it’s always about doing both.”


Interested in how the writer put this story together?  Read “How We Covered One Aspect of the Rental Crisis” to learn about her process.


 

 

Supply Shortage

According to the Hawaii Housing and Finance Development Corp.’s latest Housing Planning Study, which was published in 2019, Hawai‘i needs about 50,000 more housing units between 2020 and 2025. Some of the challenges with meeting that number is that Hawai‘i has lots of regulatory burdens, and many new rental projects need subsidies to be built.

That means new market-rate, unsubsidized rentals are mostly created in the single-family rentals market, where landlords compete for prices with homeowners taking advantage of low interest rates, Garboden says. Hawai‘i needs more rental stock built without subsidies, he says, such as the walk-up, midsized rentals encouraged by Honolulu’s Bill 7.

The Hawai‘i Community Foundation is trying to change Maui’s broken housing system through its House Maui Initiative. The initiative comprises a group of stakeholders working to align affordable housing resources, empower residents to be ready for homeownership, and get community members engaged in policy.

Micah Kāne, president and CEO of the Hawai‘i Community Foundation, says one of the biggest challenges is that policymakers often try to fix the system midstream. He says doing things like stepping in to extend an apartment building’s affordability period is a type of one-off strategy that will never fix the broken system.

“You have to hit the pause button and rethink how you’re approaching delivering affordability because these issues that we’re seeing should just be reminders that the system is broken,” he says.

Instead, he argues that Hawai‘i needs to develop a system that will deliver affordability at scale. Part of that will require the state and county governments to work together so that they can plan infrastructure improvements around future housing projects.

 

“The Ship is Sinking Quite Quickly”

Those who grew up on the Valley Isle will tell you that a lot has changed since they were children.

Today, half of Maui’s families are cost-burdened, meaning they spend more than 30% of their income on housing. Many people have left for more affordable places on the mainland, and homes that were once for local people have disappeared as housing prices skyrocket and millionaires and billionaires seek their own slices of paradise.

“The ship is sinking quite quickly,” McKelvey says.

He recalls a joke going around Lahaina about how people’s biggest fear used to be getting hit by a mango on Front Street. “Now, it’s getting hit by a Mercedes,” he says. “There are so many affluent new residents here who are extremely wealthy.”

Keone Ball, president of the Realtors Association of Maui, says he’s worried about younger generations and whether they’ll be able to afford homes on the island. He’s seeing owners charge excessively high rents.

“I know a lot of property managers that are talking to their sellers saying, ‘Do you really need to set it that high because we’re displacing workers really, families sometimes?’ ” he says. “We’re losing workers because they’re going back to the mainland or whatever, or even more sad is that they’re from here and have to go to the mainland because they can’t afford to live here.”

The nonprofit Stand Up Maui advocates for affordable housing solutions and held an online meeting in June – the same one that Rep. McKelvey attended – to discuss the Lahaina Crossroads Apartments and another complex in Wailuku that was facing a similar situation. Its president, Stan Franco, says he wants local people to speak out about the housing crisis.

“If we’re not voicing our concern about it, the question that I have is what kind of community will we have? Who will be living here, and what kind of situation will they be living in? Will we become like a Third World country?” he asks, where people who have very little are left to serve the wealthy.

“My concern is for families and my kids, my grandkids, all the generations that come after us, and if we don’t step in and really voice our concern and try to do something about this now, I hate to see what Maui and the rest of Hawai‘i will become in the future.”


Interested in how the writer put this story together?  Read “How We Covered One Aspect of the Rental Crisis” to learn about her process.

 

 

Categories: Community & Economy, Real Estate