Sunday, Dec. 3, 2023 |
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LIHUE — Housing rentals are limited on the island, and costs are climbing.
Rent prices can range from $1,500 to $4,000 a month for houses, depending on size, location, amenities and condition. At the extreme ends of the cost spectrum are tiny $650 studios ranging all the way up to elaborate $9,000 estates.
“The rental market is tight and prices are continuing to rise,” said real estate agent John Friedman of Kauai Realty Inc. “There’s definitely more demand than supply.”
“The inventory out there is getting slim,” said Maria Perlman, real estate agent at Oceanfront Sotheby’s International Realty. “Houses are selling and renters are being displaced from their houses and looking.”
Ron Margolis, broker at Keller Williams Kauai, agreed. “Unfortunately, like the whole state, we have a tremendous shortage of affordable housing. We have a very little amount of inventory.”
In this scenario, the law of supply and demand is more favorable for landlords than renters.
“I have 100 percent occupancy,” Friedman said. “My first possible vacancy is in February of 2018. The last home in Kilauea didn’t even make it to market. It was taken by word of mouth within days of the former tenant giving me notice they would be moving back to the Mainland.”
One couple, Jim and Sheila Nesbit, have been searching online for a small place to rent on the Westside since the end of July.
“There really isn’t much of a housing pool on the island,” Jim Nesbit said. “We have a couple of potential places at the moment but nothing definite. What is available is either very high-priced or is three bedrooms plus utilities plus other things, and ends up costing more than $2,000 a month easily.”
Kapaa landlord Janine Holstein has a two-bedroom, stand-alone ADU (additional dwelling unit) for rent located on her property. She plans to include water and trash in the $1,800 monthly rental cost.
“I’ve had a lot of people express interest,” Holstein said. “I find it hard to find reliable renters that stay for the term of the lease, that pay on time every month, that don’t do illegal activities, that have good credit, that have good employment history and don’t have criminal records. I find it actually difficult to find solid renters that I’m comfortable renting to, and when I do it’s very transitory.”
Rates can vary around the island, with a similar home costing more in Princeville than Kekaha, for example.
“Of course rental rates depend on the condition of the property and amenities of the property,” Friedman said. “The up-side of all that is renters with good income and good credit history are now in a position where the cost of buying a home is getting close to or equal to renting.”
Another factor affecting the rental market is vacation rentals.
“Tenanted vacation rentals, particularly illegal ones, are cutting into the supply of residential properties available for rent,” said Friedman. “Owners know they can rent property on a transient vacation rental basis for several weeks at a weekly rate that would far exceed the monthly long-term rental.”
This encourages owners to do so, despite the fact that they know that it’s against county zoning, he said. “To date, the county has been slow to fine or otherwise impose sanctions on those who chose to illegally vacation rent,” Friedman said.
With the shortage of affordable housing, many residents worry that prices will continue to increase while their wages don’t. For example, a renter paying $2,o00 a month might also have to pay $500 for utilities, in addition to deposits, which can be difficult to budget.
Meanwhile, some landlords live on the Mainland and rent their Kauai properties only for short periods. One such is Barney Glaser from Mill Valley, California, who rents out a Kalaheo home.
“They’re very valuable for people who are moving to the island and need temporary housing while they look for permanent housing,” Glaser said. “A lot of people are moving to Kauai. We go over there every few months for a couple months.”
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