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The Honolulu Advertiser
Posted on: Thursday, April 22, 2010

Hawaii rents, already least affordable in nation, get worse

By Mary Vorsino
Advertiser Urban Honolulu Writer

Hawaii news photo - The Honolulu Advertiser

Virginia McGuinness says she pays about $500, plus utilities — about half her monthly income — for her 200-square-foot studio in Kailua. “It’s very tough,” she said.

NORMAN SHAPIRO | The Honolulu Advertiser

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The Out of Reach report is available at the National Low Income Housing Coalition’s website, www.nlihc.org.

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At a time when Hawai'i families are weathering pay cuts and job losses, here's more gloomy news: The income needed to afford a modest two-bedroom rental in the Islands rose by nearly $3,000 this year to $64,396 annually — $26,000 more than the national average, a report on housing affordability shows.

The National Low Income Housing Coalition's 2010 Out of Reach study, which was released yesterday, again ranks Hawai'i as the least affordable state in the nation for renters — a spot it has held since 2005.

The study puts Hawai'i's "housing wage," a calculation of the minimum hourly pay needed to rent a two-bedroom home, at $30.96 in 2010, up from $29.53 (or $61,428 annually) the year before.

Those figures are based on fair market rents, which in 2010 rose to $1,610 a month for a two-bedroom in the Islands, up from $1,536 a month the year before.

According to the report, the 2010 housing wage in Hawai'i is up 93 percent from 2000, when it was $16.52.

Housing advocates said the figures illustrate just how unaffordable the housing market is.

"Until we're able to increase the number of units, we're going to continue to have these problems," said Doran Porter, the executive director of Hawai'i's Affordable Housing and Homeless Alliance.

James Medeiros agreed. He said he was forced to spend much more than he wanted to when he and his 9-year-old daughter moved into a two-bedroom in Kāne'ohe eight months ago. His $1,500 disability check covers the $1,200 monthly rental, and the remaining money goes to bills, food and other expenses.

Medeiros, 37, who gets dialysis treatments three times a week and is enrolled at Windward Community College, said he pinches every penny.

"I am barely affording it," he said.

Before he got the rental, he lived with his mother.

Virginia McGuinness, 44, said she spends about half of her monthly income on her $500 studio in Kailua.

McGuinness, who was once homeless and now works for for the Affordable Housing and Homeless Alliance, said she is searching for a new place after her lease was terminated. She has to move by May 7.

"It's very tough," she said, adding that many of her homeless clients work, but can't afford a place.

"I was lucky," she said.


The report appears to contradict anecdotal reports from real estate analysts that Hawai'i renters were finally getting a break — and that rents were trending downward, if only slightly.

Some real estate industry officials have said that though fair market rents might be up, rents in some communities have dropped noticeably and renters are getting more leeway to negotiate rents down by $100 or more, ask that utilities be included or request upgrades, such as new paint.

But Porter and others said a few bright spots for renters shouldn't distract from the fact that overall rents statewide have gone up.

And Porter pointed out that any gains families get from a decline in rent increases could be lost by cuts in pay, layoffs or increases in utility costs or other household expenses.

Rents "need to go a long way down," Porter said, to be considered affordable.

The Out of Reach report shows that locally and nationally, rents are rising even as the wages of renters are dropping.

About 44 percent of Hawai'i residents rent, compared with 34 percent nationally.

The average hourly wage of renters in the Islands is $12.89, the report says, down from $13.03 the year before.

By comparison, the average wage nationwide for renters is $14.44, down from $14.69 in 2009.

There isn't a county in the nation where a full-time minimum wage worker could afford a one-bedroom at fair market rent, much less a two-bedroom.

The national housing wage needed to afford a two-bedroom is $18.44 an hour, or about $38,360 a year. Meanwhile, the national fair market rent for a two-bedroom is $959 a month, from $928 last year.


The report bases affordability on renters paying 30 percent of their income on housing, an accepted standard.

"Prevailing incomes and wages are simply not enough to allow a family to afford a decent home," Sheila Crowley, president of the National Low Income Housing Coalition, said in a news release.

She added, "The persistence of high rates of unemployment and under-employment is making it ever more difficult for families" to get decent housing.

Wendy Burkholder, executive director of Consumer Credit Counseling Service of Hawai'i, a nonprofit that works with renters and homeowners to tackle their debt, said that though rents are down in some communities, many families are seeing their wages decrease or are finding themselves unemployed for months — or even up to a year.

"It's a far better market than it was three years ago for renters," when rents were skyrocketing during the housing boom, she said.

But, she added, "affordable rental is a relative term. Unemployment is still enormously an issue."

The Out of Reach report says that, given the average wage of Hawai'i renters, an affordable rental would cost $670.

Nationally, the housing wage topped $20 in 10 states. California was ranked the second least-affordable state nationwide, with a housing wage of $25.52.

Rounding out the top five were Maryland ($24.43), New Jersey ($24.32) and New York ($23.87).

The housing wage in Honolulu was $32.77 — the third highest for a metropolitan area nationally.

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