Hawaii, renowned for its breathtaking scenery, diverse culture, and mild climate, also grapples with a notorious high cost of living, particularly in housing. A report by UHERO highlights the significant income required to afford housing in the state. In 2022, homebuyers needed an income nearly 180% of the state’s median, approximately $150,000 annually, to afford the median home. Condo buyers faced a similar challenge, requiring an income of $100,000, equivalent to 120% of the state’s median income.
However, not all Hawaii cities are equally unaffordable. Some areas, due to a combination of high housing prices and lower incomes, pose a greater challenge for the average buyer or renter. Drawing from data provided by the U.S. Census Bureau, UHERO, and Civil Beat, let’s explore three Hawaii cities where affordability might be perceived as a challenge.
Honolulu
As the capital and largest city of Hawaii, Honolulu stands out as the economic and cultural hub. It’s also the most expensive city in the state. In 2022, the median home price reached $1,890,000, and the median condo price was $319,347. Affording a home in Honolulu required an annual income of $314,000, approximately 417% of the state’s median income. For a condo, an income of $106,000 per year, or 141% of the state’s median income, was necessary.
With a renter share of 61.4%, Honolulu faced its challenges on this front as well. The median rent in 2019 was $2,134, representing 28.8% of the median household income. However, with the median asking rent on Craigslist reaching $2,200 in 2023, many renters faced an increased burden. Almost half of renters spent over 30% of their income on rent, with over a third spending more than 50%.
Kailua
Situated on the windward side of Oahu, Kailua is renowned for its beautiful beaches and laid-back lifestyle. Despite its relatively high median household income of $130,000 (173% of the state’s median income), buying a home in Kailua remained a challenge. In 2022, the median home price was $1,650,000, and the median condo price was $525,000. To afford a home in Kailua, an income of $275,000 per year, or 366% of the state’s median income, was necessary. For a condo, an income of $139,000 per year, or 185% of the state’s median income, was required.
Kailua boasted a low renter share at 28.6%. However, with a median rent of $2,500 in 2019, equivalent to 23.1% of the median household income, the challenges persisted. The median asking rent on Craigslist in 2023 rose to $3,000, impacting nearly a third of renters who were rent-burdened, and a fifth who were severely rent-burdened.
Laie
Situated on the north shore of Oahu, Laie, home to the Polynesian Cultural Center and Brigham Young University-Hawaii, faces its affordability challenges. Despite a median household income of $100,585 (134% of the state’s median income), the median home price in Laie reached $1,500,000, with a median condo price of $400,000 in 2022. Affording a home in Laie required an income of $250,000 per year, or 333% of the state’s median income. For a condo, an income of $106,000 per year, or 141% of the state’s median income, was necessary.
With a notably high renter share of 61.4%, Laie faced similar rental challenges. The median rent in 2019 was $2,134, representing 25.5% of the median household income. The median asking rent on Craigslist in 2023 was $2,200, impacting almost half of renters who were rent-burdened, and over a third who were severely rent-burdened.
Conclusion
Hawaii, often seen as a paradise, presents a housing affordability nightmare for many. While the state has taken steps to address the housing crisis, more needs to be done to ensure access to safe, decent, and affordable housing for all residents, irrespective of income or location. Measures such as Bill 7, aimed at incentivizing the development of affordable rental units, need to be complemented with comprehensive strategies to address the specific needs of lower-income residents and prevent the displacement of existing communities.
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