• Rentals, vacation and otherwise Rentals, vacation and otherwise Kaua‘i’s affordable housing shortage is apparent in the lack of affordable rental units, as well as in the lack of affordable homes for sale. Finding a place to rent on the
• Rentals, vacation and otherwise
Rentals, vacation and otherwise
Kaua‘i’s affordable housing shortage is apparent in the lack of affordable rental units, as well as in the lack of affordable homes for sale.
Finding a place to rent on the North Shore or the South Shore is especially challenging. Many long-term rental units in these resort-focused districts have been converted to short-term vacation rentals, creating what some say is a critical lack of housing for service industry workers, agriculture workers and others with moderate paying jobs.
The common practice on Kaua‘i of working two or three jobs to make up the difference in rent vs. pay is no longer the answer for many as there just aren’t enough rentals out there anymore.
The economics behind this situation is simple on Kaua‘i, an island where just about every town and neighborhood is a desirable place to live: long-term renters pay say $1200 a month for a full month, short-term vacation renters net a landlord over say $2400 for two weeks of a month plus no problems with pets, long-use damage, evictions and other typical landlord problems.
There is likely the equivalent of enough vacation rental rooms being actively marketed out of Kaua‘i to make up a resort hotel or two. The main advertising medium is the Internet, and the coming of the digital age of Web sites, e-mail and online credit card transactions has opened up the world to those with vacation rentals on Kaua‘i and other choice vacation areas across the globe. A simple search on the www.google.com Web search engine brings up 67,000 pages found for the terms “Kauai” and “vacation rental.”
According to a report in today’s issue of The Garden Island the latest twist on this practice is the illegal creation of “lock out” units within existing homes. In other words, homes are being divided with false walls and instead of renting a single-family home to one group of vacationers, now two groups of vacationers share the space, considerably boosting the owner’s income from his property, while adding to the population density of neighborhoods.
Many of those renting out their property as vacation rentals say they need the income to pay county property taxes. This is especially true of those who are long-time homeowners in areas where property values have skyrocketed over the past ten years while the income of this group hasn’t matched the inflation of their property taxes and home values. Hanalei town is one example of this.
An article published this week in Hawaii Business magazine told of the high demand for condominiums on Kaua‘i. Just about every new one built, or existing one put up for sale, is being immediately purchased by a Mainland buyer with plans to retire or use it as a second home. Condominiums were once an affordable alternative for renters who didn’t want to maintain a rental home, or who couldn’t afford one. No more.
This housing market reality shows we are at a crisis level. Belt tightening, moving in with your parents or downscaling by moving to another part of the Island with lower rents just isn’t enough anymore to make it financially for many Kaua‘i workers. Meanwhile, the job market is booming with unemployment at a long-time low, visitors pouring in and the economy popping. A critical lack of employees for the growing number of jobs is a likely next event. Why move to Kaua‘i to take up a job when you can’t afford to live here, or why work three jobs to live here when you can work one in Las Vegas and own a nice home of your own?
What all this means to the future of the Island if we continue to drift without a paddle on the sea of market forces can already be seen: the sons and daughters of Kaua‘i are now more likely to live their lives elsewhere, homes in local neighborhoods that aren’t bought up by Mainland buyers are becoming more and more crowded; and our Island culture is changing, moving away from its Polynesian and plantation roots perhaps more rapidly now than at any time since the post-World War II years.
Solutions to the affordable housing crisis, along with reform of our education system, needs to be a top election issue during this fall’s election campaign. At the heart of this issue is a lack of controls on vacation rentals in our neighborhoods, and a lack of a plan to allow affordable development of subdivisions aimed at sales to moderate income buyers.
While visitors are the life blood of our economy, we need to make changes that bring balance to our economy and what it is doing to our people.
