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.
Would you like to buy some ‘Affordable Gold’, because I have a boatload of it if you are interested. Or perhaps you’d like some ‘Cheap Diamonds’, or perhaps ‘Affordable Housing’ on Kauai?
A more honest framing of the situation would be ‘Housing Shortage’. From a Buyer’s point of view, there may not be enough homes in their respective price range; not enough supply to counter the demand thereby elevating pricing.
Demand for housing in Hawaii is high. One only need look to Oahu to see that regardless of the amount of space, prices are still high, giving us a view of how much demand is there. If we build more high-rise apartments or condominiums in Kakaako, or even Waianae…anywhere on the island…are we really to believe these will not immediately fill up if priced ‘Affordably’?
Our local politicians, for the most part all of them, trumpet loudly their unflagging intent to bring ‘Affordable Housing’ to their constituents. Even our representatives in Congress mention this issue, as if it were indeed possible to magically diminish demand and produce enough housing to snuff out demand.
On Kauai, I can think of 9 direct routes to the island from the mainland. These aircraft deliver a steady stream of visitors on a constant basis. Limiting access to the island by decreasing the amount of arrivals would be an honest proposal to generate ‘Affordable Housing’ on the island. But at what price to the local economy. Would anyone ever propose such a ‘cure’?
It is up to the residents of Kauai to determine what they want their island to look like in the future. Is it to remain rural? Should it be urbanized, should there be high-rise building allowed? These questions are answered in the County Zoning Ordinance. It is guided by the residents of the island, and also by the laws of the state.
If we cannot limit the demand for housing, what alternatives do we have? Unfortunately, the alternatives are few. Perhaps Habitat for Humanity can reduce cost to a minimum, but those dense cookie cutter housing projects don’t necessarily align with the natural beauty of the island. However, if the County Zoning Ordinance allows for it, by all means proceed. Supply should meet demand if affordability is the primary objective.
Therefore, if politicians are truly intent to provide ‘Affordable Housing’, it should be known how such efforts will and do supersede and erode the fine beauty of this island, even though limited by the County Zoning Ordinance. (Thus, the limitations are in place.)
Promising ‘Affordable Housing’ on Kauai is disingenuous in that such a product does not exist on Kauai when within the confines of our development boundaries. There is simply too much demand as provided by easy access to the island from the mainland where the supply of money is almost limitless. Technology has opened the floodgates.
I truly wish our politicians were not so eager to say anything to gain virtue. That, in and of itself, is known as vice, and is as much of an indicator of corruption as is the tip of an iceberg an indicator of a deeper danger.
“On Kauai, I can think of 9 direct routes to the island from the mainland. These aircraft deliver a steady stream of visitors on a constant basis. Limiting access to the island by decreasing the amount of arrivals would be an honest proposal to generate ‘Affordable Housing’ on the island.”
-this is an issue because visitors buy up all the affordable housing??
the county needs to incentivize and approve more housing construction. If demand for housing is great, we need to increase supply to meet that demand.
not sure how limiting job-supporting visitors who come here on one of those “9 direct routes” is going to help the housing shortage, unless you’re proposing cuts that eliminate jobs, forcing residents from their current housing.
Another meeting that’s a complete waste of time. Did anything actually get decided? Is any actual action gonna happen or was it just another chance to eat free food and pitch your agenda? The Brewbaker guy said some crazy stuff: I’ve never once seen a 20 yo who has 3 cars..have you? And w were they talking about Maui at all? Saying there’s no correlation between cars and houses just shows this guy does have an agenda because otherwise that’s nonsense. Every additional residence adds about 2 cars – that’s why you have to build a parking lot, yeah? It’s true that the county needs to build infrastructure but they’re too broke from poor management- then they make laws that discourage development due to burdensome regulations. Then they have staff that work at a snails pace so things that should take a few days take YEARS. So nah, nothing new here- same old stuff we’ve heard before.
“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 [Camp] said.”
We can thank Joanne Yukimura for introducing this affordable housing killer bill! That’s why no matter how nice we think a person is, we need to elect people with economic intelligence vs. social fanatics who due to their intellectual shortcomings only make things worse. Vote Yukimura! “Working hard to make things worse!”
Traffic is the problem!
This article was questionable. If building were going to reduce housing prices you would see that on the mainland in the nicer areas like Santa Barbara-Goleta. Instead you see over building and prices which continued to rise. Prices are much higher than they were with less housing inventory and much higher than here on Kauai.
As stated in the comment by “Westside Resident”, look at Honolulu where construction provided tons of heavily occupied residential areas mostly in the form of high rise condos. Prices are higher than ours there as well.
As far a 20 year old with 3 cars? Not happening, but any individual with more than one vehicle can only drive one at at time.
Unless there is an unlawful long term blocking of selling or reselling housing to out of state buyers, building out our island will not reduce housing prices.
We need affordable rentals and possibly to help the county afford that, a small additional tax could be levied on businesses earning over a certain amount or who’s average paid wages are below average. If our gainfully employed earned a more livable wage of course they could afford to purchase some of these properties where half the buyers are from the mainland.
My landlord has cash buyers backing him. They literally knock on doors and pay people cash for their houses all over the westside. 80 percent tell them not to trespass and to never come back, but some do sell. They become 2000 dollar plus a month rentals. Do you work at PMRF? Do you have a large stipend to rent a recently speculated, flipped, lipstick on a pig rental? Yes you do, the big dogs have millions and are buying everything up. Its not the big dogs’ fault, its the system that allows unlimited speculation on peoples lives.
It’s been 40 years since my last economics class, but i did have an IQ test recently that confirmed basic logical thought processes were still functioning. To hear “Traffic has nothing to do with housing”, and “Constructing new developments for residents isn’t going to cause traffic to increase” , from Paul Brewbaker makes me think this is not someone who we should be paying attention to anymore. I get the agenda he is promoting, and don’t claim to have a complete solution, but absurdity is not the answer.
What great comments on this so far! Hope the Kauai Board of realtors didnt pay this guy too much for his ” presentation”, which is about as vacuous as his website, if you’ve had a look! I agree with the term “affordable” being in the eye of the beholder. What we could use is more supply…..and how does the county incentivize the creation of supply? I thought for a long time that “private” industry could be counted on to address this via the “free” market, however anyone who has purchased real estate on the island in the past 20 years has found out that the market….any market…is anything but “free”. Perhaps we are entering the time when C&C of Kauai needs to become not only land owners, but also developers, and while the prices may not be affordable according to everyone’s definition, it could put pricing within reach of more of those residents looking to purchase….its also up to the financing cartels to lower standards a bit, so more people can even dream of qualifying, much less find a place to purchase. A Few things need to come together in order for the housing shortage on Kauai to even be addressed in a competent manner. Sorry, cars and traffic is a related, but separate issue. Our tax base is incredibly stressed and stretched. Island taxpayers ( which is everyone) only have so much to give to state and county governments, regardless of the importance of the services they provide: those services will have to eventually be curtailed, just as we do with our household budgets, instead of having property taxes raised the MINIMUM each year! Kauai may eventually become an enclave of the rich and famous, because no one else will be able to afford to live here, and service the upper echelon, and their wealth.
Transplant realtors still selling stolen Hawaiian land…. now they are running low so they want to build more to keep filling their pockets… they could care less about the Hawaiians and the Aina…. change zoning laws hahaha who do these people think they are? Kauai needs tourist who come here spend their hard earned money and then they leave. more housing won’t cause more traffic??hahahaha …..That’s so funny! ….GREEDY FOREIGN DEVILS!! Don’t build anymore homes. Just put a cap on Kauai’s population,, in fact Kauai is already overpopulated so maybe start shipping transplants out immediately starting with these realtors? just a thought
You left out the last sentence of the paragraph you quoted….
“But at what price to the local economy. Would anyone ever propose such a ‘cure’?”
There will never be enough supply to meet the demand. Just look to Oahu.
It is disingenuous to suggest government can solve the supply vs. demand conundrum.