Hawaii County will need 19,610 new housing units over the next 10 years, as it leads the state in the rate of household growth over the decade.
That’s according to a study released Thursday by the state Department of Business, Economic Development and Tourism. The study predicted a demand on Oahu of 25,847 units, for Maui of 13,949 units and for Kauai of 5,287 units between now and 2025.
Housing demand is calculated based on the number of new households formed as families get older, coupled with the number of vacant housing units in the state and the rate of change – how many additional housing units will be needed to support a healthy market turnover.
Household growth is forecast to be the highest in Hawaii County at 29 percent, followed by Maui with 25 percent and Kauai with 19 percent. Growth will be lowest in Honolulu County, which has a projected growth rate of 8 percent by 2025.
The study found that home construction lagged during the recent economic downturn, and it has yet to catch up to demand.
“With an annual average of 3,325 residential units authorized between 2008 and 2014, our housing supply has not kept up with the demand,” DBEDT Director Luis P. Salaveria said in a statement. “We need to find solutions to increase Hawaii’s supply of housing so residents at all income levels can afford a home.”
The findings are no surprise to West Hawaii Realtor Gretchen Lambeth, who compiles and distributes monthly real estate sales statistics. Lambeth said uncertainties about water are exacerbating a situation where developers are not quite ready to take the financial risk inherent in building.
“It’s gotten really tight. … Housing is super tight right now,” Lambeth said. “There are a lot of known developers with land out there who haven’t pulled the trigger. … There’s a bunch of land already zoned and ready to go and nobody’s digging in the dirt.”
Home construction started picking up in East Hawaii last year, said builder Dion Kawakami. He said there’s a lot of interest from people looking for quotes this year.
“Last year we started more new construction,” Kawakami said. “This year it’s about the same.”
The housing demand projections were made by looking at the historical trends and future growth in households by age groups, vacant units for sale and for rent, and the demand for second and vocational homes. Analysis on the supply of housing iwas not included in the study but will be addressed in future studies. The full report is available at http://files.hawaii.gov/dbedt/economic/reports/2015-05-housing-demand.pdf