HONOLULU — Hawaii is unlikely to build the more than 50,000 new homes for sale and rental needed to meet demand over the next five years, a new study said.
The Hawaii Housing Planning Study found the imbalance in housing needs and construction, The Honolulu Star-Advertiser reported Thursday.
Meeting future demand will require 10,000 new homes annually, although an annual average of under 2,000 new homes is likely, the report produced for the Hawaii Housing Finance &Development Corp. said.
The analysis prepared by Honolulu-based SMS Research &Marketing Services found the discrepancy between housing supply and demand improved from three years ago when a similar study projected the need for 60,000 new homes over five years.
SMS reduced its demand projection due to a decrease in Hawaii’s population in recent years, but the study issued earlier this month said the trend may not continue.
Home builders have produced fewer homes in recent years and the study predicted the production decrease will continue through 2030.
Builders produced 2,675 new homes on average annually from 2014 to 2017, which was down from a 2,800 annual average between 2011 and 2014. The annual state average from 2009 to 2011 was 5,600 new homes.
“There is an urgent need to build more affordable housing units in order to maintain a sustainable island economy,” said Mike McCartney, director of the state Department of Business, Economic Development &Tourism.
Impediments to housing production include a lack of reasonably priced land suited for development, high development costs, government regulations, community opposition, and environmental issues, the report said.
A change in demand in the local housing market does not lead to a timely or efficient change in production, the report said.
“That leads to low production and high prices,” the report said.