Here’s An Affordable Housing Plan That’s Already Working

Every week newspapers across the country are filled with stories of the crisis in American housing. This week, on Wednesday, in recognition of how great the need is and how large the problem has become, the Biden administration issued a major housing initiative.

Certainly in Hawaiʻi we are feeling it. Average home prices are hitting new record highs—this year Oʻahu hit the million-dollar mark, and before that it was Kauaʻi and Maui. Since last year, single-family home prices have gone up 23 percent on Oʻahu, 24 percent on the Big Island, 35 percent on Maui and a staggering 63 percent on Kauaʻi. Meanwhile, local wages have remained pretty much flat—and in some sectors have been driven down by the pandemic.

So if wages are flat or decreasing, then who is driving up home prices? Many of Hawaiʻi’s homes are sold as investment properties and that trend is increasing. Last year on Maui, for example, 68 percent of the homes sold were purchased as investment properties; in 2016 that figure was 51 percent.

Contrast that with the national average in the second quarter of 2021, when across the United States 17 percent of houses sold were investment properties—a number far lower than Hawaiʻi’s but still one the Biden plan aims to reduce in favor of owner-occupants.