Realtors focus on housing ‘crisis’

LIHUE — Traffic has nothing to do with housing, said Paul Brewbaker, principal economist of TZ Economics.

That’s how he started his highly entertaining and enlightening speech at Tuesday’s Kauai Board of Realtors meeting, “Road Blocks to Affordability.” He was one of several guest speakers who came to share their mana‘o regarding Kauai’s housing “crisis.”

Some of what Brewbaker shared with the crowd made them gasp, including the fact that there are more registered motor vehicles on Maui than residents, and that the overall number of motor vehicles in Hawaii has tripled since 1959.

While he didn’t mention if visitor rental cars were taken into consideration in this number, he made it clear that “houses don’t cause cars to happen.”

Constructing new developments for residents isn’t going to cause traffic to increase, he said.

Brewbaker added that he knows it’s a point of concern for residents but the true problem is that everyone is driving.

“Every 20-year-old has three cars,” he said. “That’s not how it was 50 years ago.”

This coincides with a population that has been steadily climbing since the late 1960s when there was an initial flood of people moving to the island that he jokingly referred to as “hippies who are Realtord now.”

Moreover, Baby Boomers encompass the largest age distribution on the island, “driving around in their oversized SUVs,” Brewbaker said.

Other interesting statistics he shared was that there are now more households with people who live alone than married households with children, and that half of all real estate buyers are from the mainland. Additionally, most people are purchasing and selling homes in the $500,000 to $600,000 range, or less.

In other words, though the community primarily protests new condominium-style development, the island is highly in need of this type of accommodation, constructed in places where residents can avoid driving and can easily walk downstairs “to buy their Spam musubi,” he said.

The County of Kauai Planning Department is, in fact, attempting to initiate “smart growth” that includes housing diversity and communities where people don’t have to get in their cars, said Marie Williams, long-range planning manager at the department.

“We can’t keep adding lands and roadworks,” she said.

But right now, Kauai is developing at about a third of the rate it needs to in order to fulfill its goal of 9,000 new housing units by 2035, Brewbaker said.

The issue is that “we all live in the middle,” he said. And that’s the kind of housing that’s not being built.

There are plenty of luxury units and there are projects for residents who earn below a certain threshold and, therefore, can acquire subsidies and exemptions. But there isn’t much out there for most everyone else who lives somewhere in the middle — with annual incomes of more than $20,000 and less than $75,000, said Phil Garboden of UHERO, the economic research organization at the University of Hawaii.

It’s those in the middle “for whom housing burdens have increased sharply,” he said.

While the “middle” once found housing at a price point they could afford decades ago, that’s no longer the case, Garboden said.

The government, however, does have the ability to “nudge” the market in the way it needs to go, he said. And if development continues to be limited, housing prices will continue to climb.

Because introducing any kind of new units at any price points drives up the supply and helps get people into homes, Garboden said.

But new housing permits aren’t marching along at a quick enough pace and Christine Camp, president and CEO of Avalon Group, a private developer, shared her sentiments about why.

She said she wants to “work on the middle.”

But the problem is the lack of infrastructure on Kauai, she said. Developers don’t see the profitability in setting up their own sewer systems, water lines and such, which makes it “too risky” to build anything other than luxury right now, she said.

But the change requires “political will,” she said.

“Affordable housing is a policy crisis,” she said.

Camp cited one “bad policy” with good intentions that passed via a county ordinance in 2008 that essentially states that developers creating 10 or more units on Kauai are subject to a 30 percent affordable housing requirement.

“… now none are being built,” she said.

Moreover, Camp said she only ever hears about densifying areas that are already “zoned” but that Kauai should make more land available for diversification purposes.

“Not everybody is going to want to live in Lihue,” she said.

Another conundrum is that residents often cite that they don’t want any more people living in their neighborhoods. Yet, they also talk about having trouble finding affordable places to live because no new inventory is being created, she said.

“The community has a dichotomy,” she said, adding that it would be necessary to “address” that or there won’t be places to live in the near future.

In summary, Camp said that money would be better spent on things like water infrastructure in places where it doesn’t already exist in order to create the potential for new housing sites and attract developers interested in creating housing for the working class.

If the focus is placed on utility issues, then more projects will be built, she said, adding that placing more tax burdens on the $20 million mainland property owners would help fund these kinds of projects.

“It’s no longer just a housing crisis it’s an infrastructure crisis,” she said.

Stephen Spears of Kauai Habitat for Humanity, which provides affordable housing for low-income families, agreed that infrastructure is a large factor in housing availability, and so is the length of the permitting process, he said.

It took seven years before the Eleele subdivision was granted final approvals, and he added that they don’t even have as many restrictions as private developers. The good news is that a new KHH development in Waimea only took some 18 months to gain approval.

More good news is that KHH reportedly outproduces all other Habitat for Humanity organizations in the state combined, according to Milo Spindt, executive director of the Kauai Housing Development Corporation, who served as moderator for the event.

In order to qualify for a KHH home, applicants must earn between 30 and 80 percent of the median income on Kauai or between $28,900 and $70,500 for a household of four.

On the other hand, KHH has some 3,200 families on a waiting list and about 1,000 that applied within the last year-and-a-half.

“There’s a great need,” he said.

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Coco Zickos, county reporter, can be reached at 245-0424 or czickos@thegardenisland.com.