Rent race
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.
| COUNTY | RENT* | AVERAGE WAGE | WAGE 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
