New Report Highlights Housing Affordability Crisis in Hawai‘i

Despite Bright Spots, More Work Remains to Promote Financial Security for Hawaiian Households

LINK: Hawaii Scorecard

News Release from CFED January 29, 2015

Washington, D.C. — New data released today by the Corporation for Enterprise Development (CFED) shows Hawai‘i has the largest gap in the nation between residents’ income and housing costs, ranking dead last among all states (51st) for both average annual pay and the affordability of homes.

CFED’s 2015 Assets & Opportunity Scorecard also found that 43.7% of homeowners and 55.6% of renters are housing cost burdened, meaning their housing expenses exceed 30% of their household income. CFED’s 2015 Assets & Opportunity Scorecard offers the most comprehensive look available at American’s ability to save and build wealth, fend off poverty and create a more prosperous future. The Scorecard provides rankings for the 50 states and District of Columbia on both the ability of residents to achieve financial security and policies designed to help them get there. Hawaii ranks in the top of the country with an outcome ranking of 5, yet in the bottom half of the country with an overall policy ranking of 36.

The troubling data underscore the need for policies that increase the availability of affordable housing during a time when developers are pushing for more high-priced luxury units. Instead, state legislators should continue to support expansion of the state’s Rental Housing Trust Fund to ensure financing is available for new affordable housing projects. They should also promote policies that increase housing inventory through methods such as ‘ohana dwelling units, accessory dwelling units (ADUs) and low-cost micro housing units. In addition, legislators should adjust the low-income household renter's credit for inflation, which has not been adjusted since the 1980s and support a state Earned Income Tax Credit.

“At a time when families in Hawai‘i are finding it more challenging to make ends meet, there is a critical need for policies that strengthen their existing support networks and connection to culture and place, such as policies that provide stable and affordable housing options,” said Brent Kakesako, executive director of the Hawai‘i Alliance for Community-Based Economic Development (HACBED), an Assets & Opportunity Network lead organization. “The 2015 Assets & Opportunity Scorecard data make it clear that Hawai‘i has much more work to do to create stable spaces where families can exercise choice and control to pursue their own visions of genuine wealth.”

The Scorecard evaluates how residents are faring across 67 outcome measures in five different issue areas— Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education. Hawai‘i’s high showing on outcome measures is reflected in the state’s ratings of “A” in both Health Care and Businesses & Jobs, with Hawai‘i seeing low rates of uninsured households and low unemployment rates, ranking 3rd and 9th on these measures, respectively. Despite these strong showings, significant problems remain, highlighted by Hawai‘i’s low average annual pay ($37,410). This is a problem made worse by the state’s “C” rating on Housing & Homeownership, ranking 33rd overall due to the high housing cost burdens described above. Hawai‘i fared better in Financial Assets & Income, ranking 11th overall and receiving a “B” in this issue area, bolstered by the state’s low income poverty ranking (4 th).

The Scorecard also evaluates 68 different policy measures to determine how well states are addressing the challenges facing residents. Unlike its outcome measures, Hawaii ranks in the lower half of states in policy adoption, ranking 36th overall. Despite a high ranking on Businesses & Jobs (3rd), the state ranked toward the middle of states in several other issue areas, including Financial Assets & Income (33rd), Health Care (22nd) and Education (33rd). Hawaii ranked near the very bottom in Housing & Homeownership, coming in 49th place this year.

Nationally, the Scorecard data finds millions of Americans have been left out of the economic recovery with little opportunity to take charge of their financial lives or plan for a more secure future. Large percentages of these households are experiencing profound levels of exclusion from the financial mainstream as they struggle in low-wage jobs and are forced to rely on fringe, often high-cost financial services just to make ends meet.

Among the key findings: 

• Low-wage jobs have increased in all but two states. Thirty-six states and Washington, D.C., saw decreases in average annual pay between 2012 and 2013. 
• Nationally, 56% of consumers have subprime credit scores, meaning they cannot qualify for credit or financing at prime rates and are more likely to use costly alternative financial products. One in five households regularly relies on fringe financial services, such as payday loans, to meet their needs. 
• Liquid asset poverty rates – the percentage of households with less than three months of savings at the poverty level – are particularly high in states with the greatest levels of income inequality. This trend is most evident in poor states in the South and Southwest and high-cost states on the East and West coasts, all of which have large populations of color. If families can’t save, closing the wealth gap is all but impossible. 
• In 34 states, the gap in homeownership rates between households of color and white households has widened. The 10 states where the gap is greatest are Rhode Island, New York, Massachusetts, Connecticut, Wisconsin, South Dakota, North Dakota, Minnesota, New Jersey and Kentucky. 
• High-cost (or subprime) mortgage loans—one of the main culprits behind the housing boom and bust—are on the rise. The percentage of homeowners with high-cost mortgages is higher in 42 states than it was in 2010.

“The economic recovery experienced by some segments of our society is barely a blip in the lives of millions of Americans who continue to struggle in low-wage jobs and have little ability to save and build a better future for themselves and their children,” said Andrea Levere, president of CFED. “In far too many cases, these households are living outside the financial mainstream, relegated to using often high-cost financial services that trap them in a cycle of debt and financial insecurity.”

To read an analysis of key findings from the 2015 Assets & Opportunity Scorecard, click here. To access the complete Scorecard, visit http://assetsandopportunity.org/scorecard. Visit our media resources page for interactive data tools, including our asset poverty calculator, downloadable infographics, customizable charts and maps, and other data visualizations.

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CFED empowers low- and moderate-income households to build and preserve assets by advancing policies and programs that help them achieve the American Dream, including buying a home, pursuing higher education, starting a business and saving for the future. As a leading source for data about household financial security and policy solutions, CFED understands what families need to succeed. We promote programs on the ground and invest in social enterprises that create pathways to financial security and opportunity for millions of people. Established in 1979 as the Corporation for Enterprise Development, CFED works nationally and internationally through its offices in Washington, DC; Durham, North Carolina; and San Francisco, California.

To improve policies and programs that promote financial security and opportunity, CFED is the backbone organization for a national Assets & Opportunity Network, which is comprised of more than 1,700 advocates, service providers, researchers, financial institutions and others representing all 50 states and DC. To learn more about the Assets & Opportunity Network, visit:  http://assetsandopportunity.org/network