What is the problem with affordable housing in Hawaii?
The roots of Hawaii's housing crises run deep. The state has “the most restrictive land use regulations in the country.” Only 4% of land in the state is zoned for residential housing. Multifamily homes are only allowed on 0.3% of land in the state.
People Also Ask
While household incomes are on par with some of the more expensive states to live in, taxes on income in Hawaii are some of the highest in the country. The median household income in Hawaii is $88,005 with an average tax rate of 11.67% and a marginal tax rate of 22%.
Barriers to building those homes, the order says, include “the lengthy and cumbersome planning, zoning and permitting processes, lack of infrastructure, outdated development plans, the high cost of land and building materials, and the need for new and affordable financing sources for both developers and buyers.”
What's the most affordable Hawaiian island to live on? The Big Island. With Hawaii's lowest average cost of living (according to MIT's Living Wage project), lowest fair market rents, and lowest typical yearly expenses, the Big Island can be the most economical island in Hawaii.
They also recommend having a minimum income of $90,000 to ensure your monthly payment and other debts do no exceed 36% of your monthly income. Depending on what island you are looking to buy your house on will factor how much money you are likely to spend.
Cost of LivingThe most obvious drawback to living in Hawaii is our cost of living. Because everything needs to be imported, the cost of goods is significantly higher than any mainland market.
One 2019 study found that 31% of Hawai'i residents were financially healthy, 54% of households could not make ends meet or were living paycheck-to-paycheck, and 20% had difficulty paying their mortgage or rent.
Retirees who move to Hawaii also benefit from the Aloha State's lower health care costs, state-of-the-art medical system, and retiree-friendly tax laws. Social Security income and public pension withdrawals are not taxed for Hawaiian residents, leaving more money in your pocket.
But the main point is that Hawaii has more housing regulation than any other state in the nation, and that's limited the supply of housing, which is why we have the highest median home prices in the nation. And until people decide to rise up and change that, housing in Hawaii will probably remain very expensive.