Joint Housing Requirements and Market Analysis for Certain Military Installations in Hawaii--REPORT TO CONGRESS
from Office of the Under Secretary of Defense for Acquisition and Sustainment, December 2024 (excerpts)
(EDITOR's NOTE: Since DoD personnel occupy almost no rentals on the Sister Isles, DoD impact may be inferred by comparing Sister Isle rental rates to Oahu rental rates. Smash conventional thinking.)
“The committee notes that housing demand is projected to continue to outpace supply in Hawaii through 2025, exacerbating Hawaii’s affordable housing shortage. In 2011, the RAND Corporation prepared a report for the Secretary of Defense on the impact of military spending on Hawaii’s economy and found that while most military housing in Hawaii is privatized, roughly half of active-duty members live off-base and typically rent their housing. Therefore, the committee directs the Secretary of Defense to submit a report to the House Committee on Armed Services not later than December 1, 2023, on the military’s impact on housing demand in Hawaii.”
…
O’ahu
The overwhelming majority of active-duty Service members stationed in Hawai’i reside on the island of O’ahu (42,333 out of 42,447, or over 99 percent). Of those, 60 percent reside on military installations either in unaccompanied housing(~10,800) or in privatized housing on military installations (~14,700). A small number of Service members (~2,150) own homes on O’ahu.
According to the 2023 American Community Survey(ACS) estimates by the U.S. Census Bureau,there are 105,868 occupied, private rental units on the island of O’ahu; of those, the DoD estimates that ~14,700 are occupied by active-duty Servicemembers (i.e., 13.86 percent of the ACS total).
One challenge facing both active-duty Servicemembers and non-DoD personnel seeking rental housing on O’ahu is that many private landlords prefer to offer their homes as short-term vacation rentals, thereby decreasing the overall supply of rental units available in the community.
Other Islands
The percentage of active-duty Service members occupying private community housing on the other Hawaiian Islands is negligible, i.e., less than 1 percent in each case.
Kauai
In 2023, there were ~20 active-duty Service members occupying private rental units in the community (0.26 percent of all non-DoD occupied rental housing on the island).
Hawai’i
In 2023, there were fewer than five Service members occupying private rental units in the community (0.011 percent of all occupied rental housing on the island)
Maui
In 2023, there were ~30 active-duty Service members occupying private rental units in the community (0.143 percent of all occupied rental housing on the island).
Overall Impact
The DoD acknowledges that the size of the active-duty military component of the O’ahu private rental market (13.86 percent) is not negligible. However, it is difficult to calculate the comprehensive impact on housing supply and rental prices, without accounting for other,potentially confounding factors (e.g., the economic incentive of short-term rentals noted above) or the many intangible benefits of military families living in the community (i.e., all the ramifications of having two largely separated communities). Nonetheless, the DoD seeks to maximize the benefit and offset the costs and negative impacts to the community. The DoD Office of Local Defense Community Cooperation has provided a $3 million grant to the State of Hawai’i to enable the following outcomes:
•Improved capacity and capability of the State of Hawai’i when coordinating with U.S.DoD partners;
•Create a pathway for community support / engagement with U.S. DoD projects; and
•Identify capacity-building needs to foster reciprocal relationship between U.S. DoD and State/residents.
Cost-Benefit Analysis of Requiring all Service members Assigned to a Duty Station in Hawaii to Reside in Housing Located on a Military Installation (FY 2024 NDAA Section 2874(b)(3); House Report 117-397 pp. 172-173 (4))
We performed an economic cost-benefit analysis,utilizing DoD and Office of Management and Budget (OMB) standards, to compare different strategies for moving all Service members stationed on O’ahu into DoD housing. Estimated building needs are based on Unified Facilities Criteria (UFC) 4-711-01 Family Housing and use recent budget programming for Outside the Continental United States Family Housing.
The graph and table below show the net present value for each alternative considered, discounted using guidance in OMB Circular No. A-94. The cost-benefit analysis presents the current costs of Service members living in town under the status quo and shows two alternatives for moving those Service members and their families into DoD housing.
By current estimates, it would cost the DoD $10.8 billion (excluding infrastructure improvements such as utilities and roads), to build the13,614 government-owned housing units needed to house100 percent of Service members in Hawai’i on a military installation. Additionally, the Military Departments would have to increase sustainment funding by ~$170 million annually, and utility costs by ~$90 million (excluding inflation factors). The sustainment and utility costs would replace annual Basic Allowance for Housing (BAH) expenditures by~$683 million, excluding inflation factors.
Alternatively, increasing privatized housing by 13,614 units on O’ahu military installations would require approximately $3.6 billion in additional government equity, under the minimum government equity requirements for privatized housing (10 U.S.C.§2875). Additionally, the annual BAH payments to the members living in privatized housing would cost ~$757 million,excluding inflation factors….
read … FULL REPORT
* * * * *
Rep. Tokuda, Rep. Case Issue Statements on DoD Hawaiʻi Housing Report | U.S. House Representative Jill Tokuda
News Release from Offices of Reps Ed Case and Jill Tokuda, Jan 17, 2025
Washington, DC – Today, U.S. Representatives Jill Tokuda (HI-02) and Ed Case (HI-01) issued the following statements on a Department of Defense report on the military’s impact on housing in Hawai‘i. This report, required as part of the Fiscal Year 2024 National Defense Authorization Act, assessed the military’s housing requirements and impacts on the housing market, including the number of service members and their families residing off base and pathways towards increasing the Department of Defense’s housing inventory in Hawai‘i.
This uninspired report from the Department of Defense confirms what we all knew: that the military has a major impact on our housing supply and the availability of housing that our kama‘āina and families can afford. If the military is going to be a real partner to Hawai‘i and a good neighbor in our communities, then it’s high time to step up, get creative, and deliver real solutions and investments towards the biggest challenge affecting our people," stated Rep. Tokuda (HI-02). “When I requested this report, I expected that the Department would do so with fidelity and come to the table with tangible ideas for these shared challenges. This report failed to do that. We must hold the Department accountable to the shared responsibility they have to address our housing crisis and deliver real solutions for our people. As a member of the House Armed Services Committee, I’ll be fighting to do just that.”
“This report provides necessary detail to what we already know: that one factor in driving unacceptably high home rental prices throughout our state and especially on O’ahu is military servicemember participation, which the report estimates at 14% of occupied private O’ahu rental units,” said Rep. Ed Case (HI-01). “This clearly heightens the importance of the Hawai’i congressional delegation’s efforts over many years to assure more servicemember housing on-base and less servicemembers in the local housing rental market.
“But this will not solve the problem, for I also fully agree with the report’s conclusion that: ‘One challenge facing both active-duty Service members and non-DoD personnel seeking rental housing on O’ahu is that many private landlords prefer to offer their homes as short-term vacation rentals, thereby decreasing the supply of rental units available to the community.’ I believe that the continued allowance of widespread short term vacation rentals and continued inability to fully target illegal vacation rentals, significantly reducing the available supply of private rental units for local residents, is far more of a factor in high housing prices than current servicemember participation in our rental market.”
The Department of Defense’s report on military impacts on Hawai‘i housing can be found here.
* * * * *
SA: Service members occupy nearly 14% of Oahu rentals, Pentagon says | Honolulu Star-Advertiser