Real Estate Crisis in Hawaii

Hawaii is one of the number one tourist destinations not only for US citizens but also for Japanese, Chinese, Koreans, and many more nations. It is known for its beautiful beaches, culture, not mentioning its beautiful landscape. Such great features have enabled Hawaii to create such an attractive name for itself in the world. So great is its reputation that it manages to attract more than 6.5 million tourists from all over the world annually. Such numbers, however, have come at a price to the prestigious island. It now experiences problems ranging from the high cost of Hawaii real estate agents to traffic congestion, homelessness, and even drug abuse.honolulu-996344_1280

To address the problems, we must appreciate the fact the issues facing Hawaii are not indigenous to it but are part of the global challenges of growing inequality and climate change. If people are facing such problems in their countries, then they are bound to bring facets of it to the island state. The issues brought about by income inequality and even unemployment permeate through all aspects of the society and are felt by everyone, no matter your social and economic class. However, the biggest problem facing Hawaii is its housing crisis.

An article by civil beat brought the housing crisis in Honolulu brings the issue into perspective with graphs portraying the ever rising rents against the flat lined median wage per hour. In real figures, for instance, the average cost of a home on Oahu, a constituent island of Hawaii was a whopping $707,402. This situation does not only affect the prices of houses and condos, but rents have also gone up with the monthly rent of a studio going for $700 to $1200. For two bedroomed apartments, the rent starts from $1000 and goes up depending on the location.

These prices are even higher than on the mainland. Such high rents are because Hawaii is an island meaning that there is limited land for cities to expand. In addition to that, there is also the issue of the high construction costs due to the high shipping costs and also the inventory of the material, not forgetting the high excise taxes. We must also remember that Hawaii is a lovely place to be. It has clean air and water, beautiful beaches, a very pleasant climate as it is close to the equator, its oceans, forests, and a very rich culture.

hawaii-1034889_1920In such economic pressure, the government is usually forced to step in to provide solutions for the housing problem so as not to risk a majority of the population being homeless. The solution to such a housing crisis comes in the form called ‘affordable housing.’ The strategy is to put up policies like tax reliefs for private developers so as to encourage them to build affordable houses and rental buildings that the poor and also the average wage earner can afford. Such policies are responsible for ninety percent of all affordable housing units on the mainland. These policies have also helped Hawaii in solving its housing crisis with up to more than three hundred units created annually.

However, this is much lower than what is needed to address the problem thoroughly. An HHFDC report found that the state needed to put up more than 28,000 units in the next five years so as to avoid a future disaster. It is evident therefore that the state needs to do much more than just give tax breaks to solve the housing crisis and in extension save Hawaii from a disaster.