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Rent race

It takes 4.1 minimum-wage workers to rent a 2-bedroom apartment in Hawaii

By Allison Schaefers

POSTED: 01:30 a.m. HST, Apr 15, 2009

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Hawaii tops the National Low Income Housing Coalition's list of the worst states for rental affordability in the nation.

A renter — or household — in Hawaii needs to earn $29.53 an hour to cover the monthly rent on the average $1,536 two-bedroom apartment to keep housing costs within 30 percent of the household income, according to a study released yesterday by the NLIHC.

However, the coalition estimates the mean average wage for a renter in Hawaii is only $13.03 an hour — $16.50 lower than what is needed. By those figures, it would take 4.1 minimum-wage workers earning $7.25 an hour to rent the average two-bedroom apartment in Hawaii.

That's bad news for a state where an estimated 44 percent of the population still rents, according to the latest census count, said Danilo Pelletiere, NLIHC's research director.

"Not only is buying a house beyond the reach for many people in Hawaii, but renting is, too," Pelletiere said. "In general, people in Hawaii are struggling."

Hawaii has topped the NLIHC's list for at least the past three or four years, he said.

Renting in Hawaii requires 65 percent higher wages than the $17.84 per hour that the NLIHC estimates an American worker needs to pay rent on the average $928 two-bedroom apartment.

"I'm not surprised because Hawaii's rental market is finite," said Honolulu-based real estate analyst Stephany Sofos. "There's a limited amount of affordable inventory, and that drives up prices."

Hawaii's reliance on tourism also puts price pressure on its rental market, Pelletiere said.

"One part of the market is serving a fairly high-end resort clientele, and another part is catering to those, such as minimum-wage hospitality workers, who are barely getting by," Pelletiere said.

While it's definitely not a renter's market on Oahu, it's better for them now than it was six months ago, said Bill Ramsey, president of Bill Ramsey Inc., an Aiea-based property management firm.

Ramsey said most Oahu properties managed by his company have reduced rent in the last 12 months.

"We've had a fairly soft market, and the time necessary to rent units has increased," Ramsey said. "In places like Leeward Oahu, we've seen the average monthly price for a median rental drop by about $100 a month."

While $1,500 or so might be the average for a condominium, there are a lot of two-bedroom apartment units throughout Oahu that rent for $850 to $900 a month, he said.

"The number of vacancies is increasing from Salt Lake to Hawaii Kai, and the weak economy is causing people to look for lesser-cost rentals," he said.

The vacancies also could be due to doubling up, Pelletiere said.

Some tenants have begun to downsize, too, said John Riggins, owner of John Riggins Real Estate.

"They are trying to get out of properties that they can no longer afford," Riggins said.

 

Falling Short

The average wage earned by workers who rent in Hawaii falls far short of the average wage required to rent a decent two-bedroom apartment, according to a survey released yesterday by the National Low Income Housing Coalition. A decent two-bedroom rental is now out of reach for 67 percent of the state's renting population, the coalition said.

COUNTY RENT* AVERAGE WAGE WAGE REQUIRED
Hawaii $1,038 $11.21 $19.96
Honolulu $1,631 $13.37 $31.37
Kauai $1,318 $11.75 $25.35
Maui $1,465 $13.31 $28.17
State $1,536 $13.03 $29.53
Source: National Low Income Housing Coalition

*Fair market rent is determined by the U.S. Department of Housing and Urban Development.

 

How they rank

States by two-bedroom housing wage

Bottom

52. Hawaii $29.53
51. California $24.83
50. D.C. $24.77
49. New York $23.21
48. New Jersey $23.12
47. Massachusetts $22.97
46. Connecticut $21.60
45. Maryland $21.27
44. Florida $19.60
43. N. Hampshire $19.51
Top

1. Puerto Rico $9.28
2. North Dakota $10.88
3. West Virginia $11.36
4. Arkansas $11.42
5. South Dakota $11.54
6. Kentucky $12.01
7. Alabama $12.05
8. Iowa $12.10
9. Montana $12.33
10. Oklahoma $12.41
Source: National Low Income Housing Coalition

 

Hawaii tops the National Low Income Housing Coalition's list of the worst states for rental affordability in the nation.

PHOTO ILLUSTRATION BY BRYANT FUKUTOMI / BFUKUTOMI@STARBULLETIN.COM

A renter — or household — in Hawaii needs to earn $29.53 an hour to cover the monthly rent on the average $1,536 two-bedroom apartment to keep housing costs within 30 percent of the household income, according to a study released yesterday by the NLIHC.

However, the coalition estimates the mean average wage for a renter in Hawaii is only $13.03 an hour — $16.50 lower than what is needed. By those figures, it would take 4.1 minimum-wage workers earning $7.25 an hour to rent the average two-bedroom apartment in Hawaii.

That's bad news for a state where an estimated 44 percent of the population still rents, according to the latest census count, said Danilo Pelletiere, NLIHC's research director.

"Not only is buying a house beyond the reach for many people in Hawaii, but renting is, too," Pelletiere said. "In general, people in Hawaii are struggling."

Hawaii has topped the NLIHC's list for at least the past three or four years, he said.

Renting in Hawaii requires 65 percent higher wages than the $17.84 per hour that the NLIHC estimates an American worker needs to pay rent on the average $928 two-bedroom apartment.

"I'm not surprised because Hawaii's rental market is finite," said Honolulu-based real estate analyst Stephany Sofos. "There's a limited amount of affordable inventory, and that drives up prices."

Hawaii's reliance on tourism also puts price pressure on its rental market, Pelletiere said.

"One part of the market is serving a fairly high-end resort clientele, and another part is catering to those, such as minimum-wage hospitality workers, who are barely getting by," Pelletiere said.

While it's definitely not a renter's market on Oahu, it's better for them now than it was six months ago, said Bill Ramsey, president of Bill Ramsey Inc., an Aiea-based property management firm.

Ramsey said most Oahu properties managed by his company have reduced rent in the last 12 months.

"We've had a fairly soft market, and the time necessary to rent units has increased," Ramsey said. "In places like Leeward Oahu, we've seen the average monthly price for a median rental drop by about $100 a month."

While $1,500 or so might be the average for a condominium, there are a lot of two-bedroom apartment units throughout Oahu that rent for $850 to $900 a month, he said.

"The number of vacancies is increasing from Salt Lake to Hawaii Kai, and the weak economy is causing people to look for lesser-cost rentals," he said.

The vacancies also could be due to doubling up, Pelletiere said.

Some tenants have begun to downsize, too, said John Riggins, owner of John Riggins Real Estate.

"They are trying to get out of properties that they can no longer afford," Riggins said.

 

Falling Short

The average wage earned by workers who rent in Hawaii falls far short of the average wage required to rent a decent two-bedroom apartment, according to a survey released yesterday by the National Low Income Housing Coalition. A decent two-bedroom rental is now out of reach for 67 percent of the state's renting population, the coalition said.

COUNTY RENT* AVERAGE WAGE WAGE REQUIRED
Hawaii $1,038 $11.21 $19.96
Honolulu $1,631 $13.37 $31.37
Kauai $1,318 $11.75 $25.35
Maui $1,465 $13.31 $28.17
State $1,536 $13.03 $29.53
Source: National Low Income Housing Coalition

*Fair market rent is determined by the U.S. Department of Housing and Urban Development.

 

How they rank

States by two-bedroom housing wage

Bottom

52. Hawaii $29.53
51. California $24.83
50. D.C. $24.77
49. New York $23.21
48. New Jersey $23.12
47. Massachusetts $22.97
46. Connecticut $21.60
45. Maryland $21.27
44. Florida $19.60
43. N. Hampshire $19.51
Top

1. Puerto Rico $9.28
2. North Dakota $10.88
3. West Virginia $11.36
4. Arkansas $11.42
5. South Dakota $11.54
6. Kentucky $12.01
7. Alabama $12.05
8. Iowa $12.10
9. Montana $12.33
10. Oklahoma $12.41
Source: National Low Income Housing Coalition

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