When I was in college, I recall my college professor discussing Oahu's homeless crisis in our Sociology of Urbanism class. I graduated from college over a decade ago and it seems like the the problem has only amplified.
As a person who lives in the urban corridor, it blows my mind that I can be standing on my lanai and see homeless people camping on the side of the street.
The Honolulu Star Advertiser recently reported the percentage of unsheltered homelessness in 2022 has grown to 24%; this was recorded during the March 10 Point-in-Time count survey. The article explains that the 2022 Point-in-Time count is "an annual one-night snapshot of the number of people experiencing homeless who are on the street or in shelter."
There are homeless throughout the entire island, not just in metro Honolulu. Hawaii News Now recently reported that the unsheltered are on the rise in Central Oahu. Due to this, State Rep. Amy Perruso said her office wants to revive the public discussion about rent control and property speculation.
With cost of living and housing steadily increasing, state and city lawmakers are trying to find solutions to help the homeless. The city is putting $50 million for affordable housing and a State Rep. Adrian Tam is exploring if the state can purchase vacant properties in the district. Also, State Senator Stanley Chang, a vocal proponent of affordable housing, said the state should develop and sell affordable homes.
I commend our government officials for being part of the solution. However, I do not know if the city and state have the skillset to build and develop affordable housing. In reference to Senator Chang's proposal, I believe creating more transient oriented development (TOD) is a good thing. However, I disagree with him on the idea that the homes should be leasehold with a 99 year lease. This is not a viable, longterm solution.
If you want to help homeowners, the government should sell fee simple homes with a reasonable occupancy period. Unlike leasehold, fee simple is the absolute form of ownership. With fee simple ownership, the owner owns the entire property -- the land and all the improvements upon the land in perpetuity. Also, fee simple properties will maintain and increase its value over time. In comparison, a leasehold owner has the temporary right to occupy the space and you are leasing the land. As time progresses, your property is worth less. Just remember that owning a leasehold property is like leasing a car.
Currently, some condos offer affordable units. There are mix reviews if shared equity and the long occupancy period actually helps homeowners. Matter of fact, some people will argue that affordable housing actually discourages homebuilding. David Arakawa, Executive Director of the Land Use Research Foundation, talks about the "Corolla Effect."
"Government requires you, if you’re talking about cars — if you’re a car manufacturer — it requires you to produce 30% Toyota Corollas, and because you’re producing 30% of Corollas under cost, below cost, you then have to produce 70% or 60% Lexuses to make up for the costs that you’ve lost. Then what happens to the Camry families? The Camry families are left out, or they’re only 10% — developers can only make 10% Camrys. So that’s the Corolla effect. The last thing about inclusionary zone is no other industry has this building business model, no other industry."
Perhaps the winning combination is allowing private developers to work with our elected officials. In an all perfect scenario, state and city should team up established developers like Avalon Group, Black Sand Capital, and Tradewind Capital. The government can assist with entitlements and providing the land and the developer can create affordable housing.
Just Listed
Terra and I recently listed a property located at 1350 Ala Moana Blvd #2910 for $950,000 (fee simple). This 2-bedroom/2-bathroom property features over 1,000 living SF and Diamond Head views. This fully furnished unit features upgrades like Toto toilets, no popcorn ceiling, corian kitchen counter tops and maple cabinets, new windows, new sliding door and tiled flooring. Please contact me for more information.
Just Sold
Robin and I recently helped our clients purchase a 1-bedroom/2-bathroom condo unit at Haleiwa Surf for $750,000. As to be expected, there were multiple offers. Thankfully, the seller decided to work with our clients. From start-to-finish, the transaction was smooth!
Located in quiet Haleiwa, Haleiwa Surf is one of the few condos located on the North Shore of Oahu. Aside from the country living and being near Haleiwa Town, Haleiwa Surf is just steps away from the white sandy beach.
This is the second transaction I did on the North Shore this year. Greg and I recently sold a house at 67-233 Kaliuna Street. Please let me know if you are thinking of buying or selling real estate on the North Shore; our team can help you.
Home Maintenance
I hate bugs. There is nothing worse than seeing a creepy crawler in your home -- gross! Just the other week, I found the tiniest bug in my kitchen. To be honest, it was so small, it looked like a speck of dust.
When I find a bug, I pretend I am Arnold Schwarzenegger in the movie Predator. Here are some easy things you can do to ensure your home is bug free.
(1) Unfortunately, it is a fact of life that bugs do exist. The easiest thing you can do is to clean frequently, especially in your kitchen. This starts with wiping down the counter tops and all the nooks-and-crannies, properly storing food, and not letting your trash buildup. Also, do not forget that bugs can enter your home via Amazon shipping boxes, Costco boxes, etc. After you open your boxes, throw them away.
(2) Secure and seal areas where bugs can get in. This can be around the windows, doors, and walls. For doors, you can install a door sweep. For windows, make sure your screens have no rips and your window frames are properly sealed. If you have jalousies windows, you want to ensure your frames are not bent too. For walls, you want to patch any holes.
(3) Now it is time for the fun part. I was told Jason Sahara of Menehune Pest that using bait gel is the most effective method. Keep in mind that the bait gel should not be used like caulking. The goal is to place small globs of the bait gel in areas near sources of water (sink). Also, if you look carefully, you might see roach droppings. This is probably where the roaches gather and you can place the bait gel in these areas too.
(4) Lastly, both pest vendors recommend Hoy Hoy traps because the traps are a way to determine where the roaches are moving.
Ramblings
Kauai
KITV 4 reported that Kauai's housing market has been very competitive. They reported that home sales increased by 46.42% from 2020 to 2021. Also, the median sales price increased from $785,000 to $1,075,000 during the same time. With inventory even smaller than Oahu, what is driving up the price on Kauai?
A&B
During a recent earnings call, Marla Backer of Sidoti asked how inflation and higher interest rates will affect Alexander & Baldwin. In response, Lance Park of A&B responded, "from our internal opportunities for growth and so specific to finishing up Aikahi, progressing with Manoa Marketplace and Pearl Highlands, we feel good about those opportunities and expect to complete them."
Hawaii's Economy
Hawaii News Now recently reported that Hawaii's economy is expected to grow 3.2% in 2022. This is positive for Hawaii, despite global conflicts.
According to the Department of Business, Economic Development & Tourism, "During the first four months of 2022, state general fund tax revenue collection reached $3.6 billion, representing 45 percent growth from the same period in 2019. The increase in tax revenues was partially due to the higher inflation rate and partially due to economic growth. Inflation in Honolulu between the first quarter of 2019 and first quarter of 2022 was 10.3 percent."
Not In My Neighborhood
Civil Beat recently reported that Manoa Chinese Cemetery would like to develop affordable rentals near their cemetery. However, Manoa Chinese Cemetery has ran into a lot of opposition.
Stay safe and healthy.
-Ryan Oda