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Rent race


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POSTED: Wednesday, April 15, 2009

Hawaii tops the National Low Income Housing Coalition's list of the worst states for rental affordability in the nation.

A renter — or household — in Hawaii needs to earn $29.53 an hour to cover the monthly rent on the average $1,536 two-bedroom apartment to keep housing costs within 30 percent of the household income, according to a study released yesterday by the NLIHC.

However, the coalition estimates the mean average wage for a renter in Hawaii is only $13.03 an hour — $16.50 lower than what is needed. By those figures, it would take 4.1 minimum-wage workers earning $7.25 an hour to rent the average two-bedroom apartment in Hawaii.

That's bad news for a state where an estimated 44 percent of the population still rents, according to the latest census count, said Danilo Pelletiere, NLIHC's research director.

“;Not only is buying a house beyond the reach for many people in Hawaii, but renting is, too,”; Pelletiere said. “;In general, people in Hawaii are struggling.”;

Hawaii has topped the NLIHC's list for at least the past three or four years, he said.

Renting in Hawaii requires 65 percent higher wages than the $17.84 per hour that the NLIHC estimates an American worker needs to pay rent on the average $928 two-bedroom apartment.

“;I'm not surprised because Hawaii's rental market is finite,”; said Honolulu-based real estate analyst Stephany Sofos. “;There's a limited amount of affordable inventory, and that drives up prices.”;

Hawaii's reliance on tourism also puts price pressure on its rental market, Pelletiere said.

“;One part of the market is serving a fairly high-end resort clientele, and another part is catering to those, such as minimum-wage hospitality workers, who are barely getting by,”; Pelletiere said.

While it's definitely not a renter's market on Oahu, it's better for them now than it was six months ago, said Bill Ramsey, president of Bill Ramsey Inc., an Aiea-based property management firm.

Ramsey said most Oahu properties managed by his company have reduced rent in the last 12 months.

“;We've had a fairly soft market, and the time necessary to rent units has increased,”; Ramsey said. “;In places like Leeward Oahu, we've seen the average monthly price for a median rental drop by about $100 a month.”;

While $1,500 or so might be the average for a condominium, there are a lot of two-bedroom apartment units throughout Oahu that rent for $850 to $900 a month, he said.

“;The number of vacancies is increasing from Salt Lake to Hawaii Kai, and the weak economy is causing people to look for lesser-cost rentals,”; he said.

The vacancies also could be due to doubling up, Pelletiere said.

Some tenants have begun to downsize, too, said John Riggins, owner of John Riggins Real Estate.

“;They are trying to get out of properties that they can no longer afford,”; Riggins said.

 

Falling Short

The average wage earned by workers who rent in Hawaii falls far short of the average wage required to rent a decent two-bedroom apartment, according to a survey released yesterday by the National Low Income Housing Coalition. A decent two-bedroom rental is now out of reach for 67 percent of the state's renting population, the coalition said.

                                                                                                                                                                                                                                                                           
COUNTYRENT*AVERAGE WAGEWAGE REQUIRED
Hawaii$1,038$11.21$19.96
Honolulu$1,631$13.37$31.37
Kauai$1,318$11.75$25.35
Maui$1,465$13.31$28.17
State$1,536$13.03$29.53

Source: National Low Income Housing Coalition

*Fair market rent is determined by the U.S. Department of Housing and Urban Development.

 

How they rank

States by two-bedroom housing wage

Bottom

                                                                                                                                                                                                                                                                                           
52. Hawaii$29.53
51. California$24.83
50. D.C.$24.77
49. New York$23.21
48. New Jersey$23.12
47. Massachusetts$22.97
46. Connecticut$21.60
45. Maryland$21.27
44. Florida$19.60
43. N. Hampshire$19.51

Top

                                                                                                                                                                                                                                                                                           
1. Puerto Rico$9.28
2. North Dakota$10.88
3. West Virginia$11.36
4. Arkansas$11.42
5. South Dakota$11.54
6. Kentucky$12.01
7. Alabama$12.05
8. Iowa$12.10
9. Montana$12.33
10. Oklahoma$12.41

Source: National Low Income Housing Coalition