Disaster worsens rental housing, labor pool woes; can General Plan help?

J.P. Gordon is the chef at the Kilauea Bistro, a thriving North Shore eatery that attracts a consistent mix of locals and tourists for lunch and dinner.

Gordon makes good money. He pays well. His kitchen help earn between $16 and $26 an hour, he said. He lives in a rented house that was recently put on the market. He expects he and his wife will have to move within the next few months.

He could afford monthly rent in the range of $2,400 to $3,600, he said. The couple has been looking. They haven’t been able to find a thing. He said he’s concerned the disaster created by the storm that began April 13 will make it even harder to find a place.

“I’m prepared to live in my van,” he lamented.

Of the Bistro’s 30 well-compensated employees, Gordon says, at any one time three are living out of vehicles or makeshift quarters because they can’t find anything to rent, much less own.

Tom Pickett owns the Kilauea Bakery, next door to the Bistro, a landmark on the North Shore for decades. He has 40 part-time employees, 30 of whom have worked for him for more than five years. He pays $13 to $16 an hour. The Bistro has a liquor license, but the Bakery does not.

Despite the longevity of many of his workers, Pickett grapples every day with turnover. Four employees quit on the same day a little more than a week ago. There are many reasons, but a key one, he said, is they can’t find housing and tire of living out of cars or camping on the beach.

And that, Pickett said, was before the storm. He has seen evidence already that this tight labor market has started to worsen as a result of the devastating effect on availability of rental housing.

A few months ago, he said, he considered trying to find a house that several employees could share. He found one, but the owner wanted $3,600 per month. Pickett was incredulous, he said. But the owner’s rejoinder, he recalled, was: “That’s how much I can get renting this through Airbnb.”

An informal census of vehicles apparently used as housing at Anini Beach Park was enlightening. More than two dozen old vans, cars and trucks — many with windows covered by makeshift curtains — appear in residential use. It suggests that the park may be a small population center in and of itself.

Living in vehicles is, technically, illegal in Kauai County.

Finding any of the residents to talk to proved fruitless one day last week. One of two people encountered was a man who lives in a van and station wagon. Asked where the other residents were, he said, “They’re at work.”

Another idea Pickett has is for dormitory-style housing for entry level workers. The only problem with that, said Marie Williams, long-range planning director for the Kauai County Planning Department, is that, right now, dorm housing would generally be illegal.

The newly enacted General Plan Update, she said, includes a recommendation that this restriction be relaxed, but that will require specific County Council legislation.

“If this goes into effect through a future amendment to the zoning code, it will allow development of dormitory-like projects where workers can rent single rooms,” she said.

A feature of both the Bistro and the Bakery is that they have had seemingly permanent “help wanted” signs affixed to their doors for months. They don’t do much good. Pickett said that in a good week, he gets one applicant.

And the new Lighthouse Village shopping center that is about to open across the road from the two established restaurants is likely to further constrict a slim labor market. It will feature a new location for Verde, a Mexican restaurant with facilities in Lihue and Kapaa.

Gordon says he typically operates his kitchen with just four of the six people the workload requires. Pickett’s experience is similar. Both men have been concerned about worker burnout as a result of the long hours staff members must put in.

The labor shortage is behind a recent decision by Pickett to close the Bakery on Tuesdays beginning on May 7. The Bistro is instituting Sunday closures, Gordon said. That will reduce business, but both see no choice because they can’t find the workers they need.

General Plan solution?

The situations of the two Kilauea restaurants underscore a reality about the new General Plan widely recognized among officials, and seemingly understood instinctively by a vast majority of Kauai residents. For planning purposes, all roads on Kauai lead to a desperate, worsening housing shortage, about to get even worse.

Trekking through the muddy floodplain in Anahola a few days after the storm turned up evidence of that sad fact. At several homes that barely avoided complete devastation — and ended up with only a foot or two of mud inside their ground-floor units — tenants and owners were digging out.

Many of the homes were built on stilts, but ground-floor rental units were illegally added later. The parts of the homes on stilts did fine. The bootlegged rentals did not.

County damage evaluators who toured these homes realized two things. First, the ground-floor units are largely illegal. Second, without such ad hoc, off-the-books housing, the squeeze on Kauai families would be even worse than it is. It puts county officials in an impossible bind.

Housing, say top officials of the Planning Department and County Councilmembers Derek Kawakami and Mason Chock, is the core challenge that Kauai’s new General Plan must resolve. That’s true, they say, because all other economic considerations on island are tied intimately to the housing scarcity.

Chock chaired a council committee that oversaw production of the new General Plan.

“While I don’t agree with everything in the plan, it does identify housing needs and recognizes the need for zoning changes,” he said. “The largest obstacles to these types of housing lie in our current zoning restrictions and establishing cost-effective, environmentally safe wastewater regulations.”

The new plan also yielded some surprising findings about who lives on Kauai and who’s moving here, said Williams and Kaaina Hull, the county’s deputy planning director. Those findings have direct and major ramifications for housing.

The new plan was the first time the county’s core projections had been updated since 2000. In that year, the general plan, accurately, projected a resident population by 2020 of between 65,260 and 74,320. Today’s island population has been estimated at 67,091, though some officials think the number is closer to 69,000.

The 2000 plan went far off the mark, however, in terms of projected daily visitor counts of between 24,000 and 28,000. February’s actual count was 34,652.

The 2000 plan also assumed that growth would be heavily influenced by people moving to Kauai from the Mainland and overwhelming the island’s housing market. Specifically, 18 years ago, that plan observed that: “more of these buyers are seeking single-family homes than in the past. In the late 1990s, a large influx of Mainland buyers stimulated a boom in high-end residential real estate — much of it single-family.”

And, for good measure, the new General Plan presciently observed:

w “Extremely poor (road) conditions can be observed in Kapaa Town and during peak hours on Kaumualii Highway leading into Lïhue. Collector roads, such as Kuamoo Road in Wailua, also suffer congestion during peak hours.”

w “Heavy visitor use can displace residents or significantly change the quality of the experience, especially at beaches and parks.”

w “The cost of housing, including both owner-occupied and rental units, continues to be one of the biggest economic obstacles facing most Kauai residents.”

Possibly the most surprising discovery in the new plan, Hull said, relates to where Kauai’s population growth — and the direct relationship with housing — is coming from. It is not, said Hull and Williams, coming from Mainland people moving here. Rather, they said, the population growth driving the housing crisis on Kauai is a result of two factors:

w An increase in live births on island. Census statistics measure net population change, with deaths subtracted from live births. For Kauai, between 2010 and 2017, there were 4,172 deaths, balanced by 6,343 births, for a net natural increase in the population of 2,171.

w Immigration to Kauai from other countries, particularly from Asia, and especially from the Philippines. That produced a net increase in population from 2010 to 2017 of 2,720 — hundreds more than the number of babies born here.

Although migration from the Mainland or other islands is notoriously difficult to track, according to Hull and Williams, that net number was just 229. Trends are difficult to evaluate, she said, because, while many people move to Kauai from the Mainland, many also return each year, and there is no way to track the number of people who move to or from other islands.

The housing reality described in the new plan is grim. It projects a 9,000-home deficit over the next decade and a half, with the number of homes necessary to shelter the island’s population rising from 30,421 to 39,676.

Demand will not be equally distributed across the island. The Lihue area, for example, is projected to need 47 percent more housing units than it has, while the North Shore needs to grow by only 2 percent. In Lihue’s case, this means building 4,604 units that don’t now exist. For the North Shore, a need for a 2 percent increase might seem a low-ball estimate to Gordon or Pickett, who are seeking local employees, or anyone trying to find an affordable place to live from Kilauea to Haena.

Hull and Williams, joined by Michael Dahilig, the county planning director, noted that the plan anticipates there will not be one single solution to the housing shortage and that the ideal concept of a single family, detached house with a yard will no longer be the target at which many Kauai residents can aim.

“If we are going to reduce the cost of housing, we first have to produce more low-cost housing,” Dahilig said.

Directly related, Dahilig said, is the General Plan’s role in anticipating the effects of climate change on the island, restricting or destroying some existing housing.

The plan, Dahilig said, is a “managed retreat” because “I think we need to recognize we’re going to lose (a significant amount of) Kapaa Town housing,” in particular, as ocean levels rise.

Greater density — especially in Lihue — will be necessary. Everything will have to be on the table — including homes made of recycled shipping containers and the workforce dormitories envisioned by Pickett.

‘Affordable’ housing fiction

When Hull spoke to the Lihue Business Association, he sketched out a disturbing reality. There is no reassuring definition of “affordable” housing, he said. For home ownership to be within striking distance for many Kauai families, homes would have to be available for as little as $250,000 — a price that, today, is a fiction.

Part of the problem, he said, is that costs that must be incurred before construction can even begin are daunting. Installing a required septic system, for example, can cost $25,000 to $30,000. New water connections for many single family homes run as high as nearly $15,000. If the area where the home is to be built is undeveloped, streets and sidewalks must be constructed, utility poles must be installed and, in areas that have underground sewage service, those lines must be extended. That is without the fees an architect and engineer would charge to create plans for the home and get the necessary permits.

Today, many of the upfront infrastructure costs must be paid in advance by developers. Several years ago, the county also imposed a requirement for a minimum percentage of “affordable” homes to be included in any development with 10 or more dwellings. Since that ordinance was enacted, Dahilig said, only a couple of projects have been proposed by builders.

What this all means, the planners said, is that Kauai must accept a new housing paradigm. Its elements include:

w A greater emphasis on in-fill housing, where existing vacant lots are built on individually instead of relying on more massive developments.

w Higher zoning densities, in particular in Lihue. The means packing more housing units into the same parcel of land, both by emphasizing apartments and townhouses, but also by raising the maximum height that houses can attain — 50 feet today. That doesn’t mean high-rises, but it does mean higher buildings in some parts of the island.

w A faster embrace of ADU (“additional dwelling units”), the concept of adding houses to lots where one home already exists. Such houses are especially useful for multi-generational family groups.

w Accepting the reality that towns can no longer simply grow out horizontally, but must make more efficient use of land and other resources.

w Embracing greater reliance on so-called tiny homes, which may typically be 500-square-feet or smaller. That’s sufficient for a couple or a couple with one or two small children.

w Repurposing of underutilized shopping malls. The most obvious potential location for this is the failing Kukui Grove Shopping Center, but Derek Kawakami, a County Councilmember and candidate for mayor, says the shopping center capacity challenge goes far beyond Kukui Grove. Kawakami reports he is involved in management of three other shopping centers, all of which have unused land that could be developed for housing.

w An inventory of public property — especially county-owned land — that could be recommitted to housing. This option largely eliminates land acquisition costs.

w More imaginative repurposing of existing buildings into mixed spaces that incorporate housing and commercial uses.

The basic reality, Kawakami said, is that just as there is no single solution to Kauai’s housing crisis, government cannot solve the problems.

“We are dependent on the private sector to produce this housing,” Kawakami said.

He said he is reluctant to try to dictate to developers how they can proceed, but that — especially in the case of Kukui Grove — “if they approached me to say they would like to produce affordable housing, I’d support it.”

In terms of solutions, Kawakami said, “everything is a piece of the puzzle.”

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Allan Parachini is a journalist and a former PR executive. He is a Kilauea resident.