Homeownership for Hawaiians Requires Big Thinking!
by OHA Trustee Keli‘i Akina, PhD, June 1, 2021
The median price of a home on Oʻahu has just reached $950,000. It’s currently at $983,500 on Maui and over $1 million on Kauaʻi. With such high prices, how can local residents, both Native Hawaiians and others, afford to own a home here?
Stories of former Hawaiʻi residents who have moved elsewhere are common. For example, Chelsea W. is Native Hawaiian and was born and raised on Oʻahu. On moving to Washington state, she had this to say: “Being stuck at an 8-to-5 desk job for two years with no room to move up the corporate ladder, high cost-of-living expenses, living paycheck to paycheck, and seeing people I loved being dragged down were the reasons I moved…Here I purchased a three-bedroom, two-bath house with a garage, large yard and street parking for $280,000.”
Like Chelsea, Ashlynn S. is a part-Hawaiian born and raised on Oʻahu. In 2019, she moved her family to Arizona. Ashlynn said, “We left Hawaiʻi to get ahead in life financially. We were both working but not being able to enjoy life due to the extreme high cost of rent and utilities. I never imagined leaving the place I love and called home, but enough was enough; we got tired of worrying about whether we could afford our apartment. In Hawaiʻi, we could never think of owning a home, but here in Arizona we actually have a chance to be able to buy a home. As hard as it was to leave Hawaiʻi, we knew we had to do better for our daughter.”
Some Kānaka are able to get help from government and nonprofit programs that aim to lower barriers to homeownership.
At the federal level, for example, the Federal Housing Administration (FHA) insures housing loans, incentivizing private lenders to work with low income earners or those with credit problems. At the state level, the Department of Hawaiian Homelands (DHHL) introduced itsrent-with-option-to-own program to its beneficiaries on Hawaiʻi Island and continues to work on reducing the statewide Hawaiian Homelands waiting list. There are also nonprofits such as the Hawaiʻi Homeownership Center which administers programs to help with down payments and closing costs.
At OHA, Quality Housing is a pillar of our new strategic plan and signals the Board of Trustees’ commitment to ensuring Hawaiians are well-equipped with financial knowledge and resources in their quest for homeownership.
While these are all helpful efforts, the challenge of enabling Hawaiians to buy homes is greater than what programs targeting Hawaiians alone can accomplish.
A basic problem we Hawaiians share with non-Hawaiians is that there is simply not enough land set aside for housing.
According to land use expert and retired law professor David Callies, housing and urban development in Hawaiʻi exists on only 5% of Hawaiʻi’s landmass, and the rest is mostly reserved for either preservation or agriculture. This situation creates an “artificial scarcity” of land, driving the price of housing upwards.
The solution, according to Professor Callies, would be to make a bit more land available for housing. Even increasing housing from the existing 5% to 7% of our landmass could significantly increase the supply of homes. And that could be done without negatively impacting the ʻāina for agriculture or preservation.
If we want Hawaiʻi to be a place where all can thrive, then we have to think big. Programs that specifically help Hawaiians are valuable, but an overall increase in the supply of housing will help Hawaiians and will benefit non-Hawaiians too.