Sti l l Houseless in Honolulu, 2016 BIA Hawaii

November 15, 2016

Dr. Carl Bonham Executive Director, UHERO

Desperately seeking Housing

November 15, 2016

Overview

Houseless in Honolulu is not new ‣ Home prices and rents have always been high. ‣ Production has always been cyclical. ‣ What is new?

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November 15, 2016

Overview

Houseless in Honolulu is not new ‣ Home prices and rents have always been high. ‣ Production has always been cyclical. ‣ What is new?

Hawaii’s Housing Gap ‣ Hawaii is 48th in housing per capita. ‣ But, how big is Hawaii’s housing gap?

UHERO.HAWAII.EDU ©2016

November 15, 2016

Overview

Houseless in Honolulu is not new ‣ Home prices and rents have always been high. ‣ Production has always been cyclical. ‣ What is new?

Hawaii’s Housing Gap ‣ Hawaii is 48th in housing per capita. ‣ But, how big is Hawaii’s housing gap?

Benefits of Closing the Gap ‣ Economic benefits of closing the gap. ‣ Diversification and growth without housing? ‣ Reducing poverty

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November 15, 2016

0

1

2

3

4

1950 1960 1970 1980 1990 2000 2010 2015

Home ownership has always been expensive

Ratio of Hawaii to US Owner Occupied Home Values

UHERO.HAWAII.EDU ©2016

Source: US Census Bureau

November 15, 2016

60

80

100

120

140

160

180

Ark

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issi

ssip

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ana

Sout

h C

arol

ina

Kan

sas

Neb

rask

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uisi

ana

Geo

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Idah

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Car

olin

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Dak

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Mic

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onta

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ew M

exic

oW

isco

nsin

Penn

sylv

ania

Ari

zona

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tah

Mai

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Nev

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Min

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elaw

are

Rho

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Flor

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Col

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Was

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Con

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Verm

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New

Ham

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Mar

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ork

New

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Haw

aii

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.

Rent too

2014 Regional Price Parities: Rents and Utilities

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Source: US Bureau of Economic Analysis

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Home Price Inflation highest on the coasts

Source: FHFA Quarterly All Transactions Price Index, NSA

FHFA Quarterly Home Price Index (1980=100)

0

200

400

600

800

1000

1200

1980-1

1981-1

1982-1

1983-1

1984-1

1985-1

1986-1

1987-1

1988-1

1989-1

1990-1

1991-1

1992-1

1993-1

1994-1

1995-1

1996-1

1997-1

1998-1

1999-1

2000-1

2001-1

2002-1

2003-1

2004-1

2005-1

2006-1

2007-1

2008-1

2009-1

2010-1

2011-1

2012-1

2013-1

2014-1

2015-1

2016-1

Boston

Nassau Cnty

Cambridge

San Francisco

San Jose

Honolulu

US Average

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Housing Units Authorized by Permits

new lows in post war home building

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

1940

1948

1956

1964

1972

1980

1988

1996

2004

2012

OahuState

Source: Robert Schmidt, Historical Statistics of Hawaii, DBEDT, UHERO.

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How big is the housing gap?

November 15, 2016

Population and Housing (2005-2015)

139

391

806

414

166

135

306

84

40,896

114,322

277,741

143,686

58,070

51,746

136,469

50,380

294

292

345

347

349

384

446

600Connecticut

New Jersey

Nebraska

Kansas

Maryland

Virginia

Massachusetts

Hawaii

Population added1,000 people

Housing units addedNumber

Ratio of housing units added to population addedUnits per 1,000 people

Source: US Census Bureau, UHERO, ht McKinsey Global Institute.

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356 357 372401 405 414 417 417 419 431 433 454

549

UT CA NJ MD VA CT WA MA KS NE FL ME

US average = 419Housing units per capita, 2015Units per 1,000 people

50 49 48 46 45 42 40 39 36 30 29 11 1

State ranking

HI

How big is the housing gap?

Source: US Census Bureau, UHERO, ht McKinsey Global Institute.

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How big is the housing gap?

November 15, 2016

574.1

532.5

41.6 38.480.0

46.9 33.1

Current demand(2015)

Currentstock(2015)

Currenthousingbacklog

Demandadditionby 2025

Totalhousingbacklogby 2025

Projectedunits2016-25

Gap to fillby 2025

1,000 housing units

Number of housing units neededin Hawaii to supply the market atthe same per capita rate as New Jersey (i.e., 401 units per thousand people)

Additional units needed tosupply Hawaii’s populationgrowth through 2025 (at thesame per capita rate as New Jersey)

574.1

Hawaii’s housing supply gap

Source: US Census Bureau, UHERO, ht McKinsey Global Institute.

November 15, 2016

Build an 33K additional housing units by 2025 ‣ Real GSP average of 0.6% higher over 2016-25 ‣ Non farm employment and labor earnings 1% higher ‣ Construction job 13% higher ‣ Almost 5K more net migration over the period ‣ Housing gap impedes diversification and growth

Reduce poverty rates

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Benefits to closing the housing gap

0

5

10

15

20

25

30

Official Poverty Rte Supplemental Poverty Measure SPM w/RPP rent, food, clothing*

Hawaii US

Source: US Census, Trudi Renwick and Liana Fox, Supplemental Poverty Measure 2015. Trudi Renwick, Bettina Aten, Eric Figueroa and Troy Martin, Supplemental Poverty Measure: A Comparison of Geographic Adjustments with Regional Price Parities vs. Median Rents from the American Community Survey. * Applied 2011 estimated gap to 2015 rates.

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