The runaway housing prices that our island is experiencing that has created a lack of affordable housing for residents is due in no small measure to government obstruction of housing supply. All markets work on a simple system of supply and demand. Demand for housing on this island is consistently high.
In 1990, the island’s population was 120,317 people in 2000 it was 148,677 which was a 23.6% increase. In 2010 it was 185,079 which was an increase of 24.48% over 2000’s population. In 2020, the population was 200,746 which indicates an increase of only 8.465% since 2010. The point of reciting these numbers is to show that folks are moving here and they are moving whether or not there is adequate infrastructure or housing supply.
The population grew by 67% in 30 years. If they are coming and the housing supply is insufficient, prices will increase rapidly. This will result in families no longer being able to afford to continue living area. Housing supply has not kept pace with this population growth. Very little of the urban designated areas on the island have seen zoning changes to help mitigate this demand for housing. You need only look in Kona at the area between Keauhou and Kailua Village above Alii Drive and below Kuakini Highway. This area has potential for public water and public sewer and is in the logical area for residential development. Yet, much if the area is zoned agricultural.
If the county wanted to be serious about tackling affordable housing they would declare a housing emergency and allow all tracts in urban expansion areas to rezone from Agricultural to Multi-Family (RM) or higher density Residential (RS-7.5) zoning if they agree to develop at least 60% of the housing units as affordable housing and have deed restrictions that forbid vacation rentals. The county would step up and build the main infrastructure needed to create these developments (main thorough fares, water mains and sewer mains), rather than wait for developers to do this work. Frankly, it is the government’s job to provide these services. They could recover the costs through special enhancement taxes on the units created in these areas. This would reduce the developer’s upfront costs and risk further spurring the creation of new housing.
The unfounded idea that we can keep Hawaii a country atmosphere by not allowing new development is not working. The new arrivals are coming anyhow. By restricting development, we are encouraging sprawl into the countryside and actually reducing the open spaces. It is time to recognize that the population here will likely be 250,000 people in eight more years. Where those 50,000 new residents live is up to us. Whether our kids can still afford to live here is up to us.
R. J. Kirchner is an appraiser with Paradise Appraisals, LLC.
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