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Kaua’i averted ‘eviction tsunami’ as wealthy homebuyers pushed up prices

LIHU’E – New legislation, construction projects and the fallout from COVID-19 rocked Kaua’i’s housing crisis in 2021, though it is too early to fully understand the ramifications of last year.

County Housing Agency director Adam Roversi said the coronavirus pandemic had driven out-of-state buyers and renters to Kaua’i in 2021.

“For the record, (they) appear to have dramatically increased house prices and rents, exacerbating an already critical housing shortage,” Roversi said.

The median sale price of a home in Kaua’i in November was $ 1,213,000, up 57% from 2020, according to independent real estate company Hawai’i Locations.

Kaua’i County Council Member Luke Evslin agreed that the influx of wealthy people looking to work in new homes stands out as a key development in the housing crisis.

“If you work for Google, you can afford to outbid anyone who works on Kaua’i, for the most part,” Evslin said.

The true scope of the impact of the wealthy remote workers on the housing crisis is unknown. But Evslin believes that could have been mitigated by the apparent focus of newcomers on high-end beachfront properties, rather than working-class neighborhoods.

“It’s a take-away inventory, but in a lot of ways it’s an inventory that probably wouldn’t necessarily have been sent to the locals anyway,” he explained.

High property prices and rising rents also exacerbated the labor shortage in Kaua’i in 2021, according to county economic development office director Nalani Brun.

Brun described the island’s dominant hotel industry as historically populated by transient workers from outside the island, including many recent high school or college graduates in search of sun, sand or d ‘adventure.

“This workforce has taken on many jobs, often part-time and at a lower pay scale, in order to be able to achieve their dreams,” she explained.

Many also lived under one roof, pooling their resources to pay rent each month. But very little of this housing is now available, and what remains has become unaffordable for working poor.

“(It makes) a part-time job a choice that doesn’t pay the bills while giving a passing worker the freedom they’re looking for,” Brun said. “So we don’t get that support worker that we usually had to back us up.”

The director of OED was careful to note that the lack of affordable housing isn’t the only problem compounding the island’s labor shortage: residents have given up second jobs to take care of children and the elderly, and have found other ways to earn money, including the car. Turo rental platform, or moved off the island for other opportunities.

Others have simply reassessed their priorities.

“A lot of people just look at their lives and what they expect from it,” Brun said. “Working two or three jobs doesn’t seem like ideal.

Eviction Tsunami Avoided

The end of the state and federal moratoriums on deportations last summer looked set to trigger a wave of deportations on Kaua’i.

State officials Nadine Nakamura of North and East Kaua’i and Troy Hashimoto, who represents areas of Maui including Wailuku, created a bill that became Bill 57, which revised the state’s landlord-tenant code, to prevent what Nakamura called a potential “eviction tsunami” in the wake of COVID-19.

But the storm never came.

Roversi and Kaua’i Economic Opportunity, the island’s designated landlord-tenant mediation center, report preliminary results that show no significant increase in evictions from pre-pandemic figures.

Charlene Johnston, KEO’s Acting Mediation Director, is surprised at the relatively low demand for the association’s mediation service, which is looking for alternatives to eviction in the event of a landlord-tenant dispute.

Johnston credits the Kaua’i Federal Credit Union, the organization that runs the island’s federally funded Rental and Utilities Assistance (CRUA) program, with an awareness campaign that has raised awareness among owners and property managers. She believes the KFCU’s efforts may have prevented evictions that might otherwise have happened.

“A number of (property managers) are really well trained in the process now,” said Johnston. “They know how to connect their tenants with KFCU and follow the process (CRUA). “

To date, KEO has served 150 unique households through its eviction and diversion mediation program.

Most of these cases bypassed mediation by resolving payment disputes with financial assistance under the CRUA. But some cases have gone to mediation, for which KEO has a 100% success rate, which means all participating landlords and tenants resolve their disputes without going to court or eviction.

The CRUA has so far received 2,176 requests for assistance, according to Roversi, for a total requested of $ 13.85 million in rent and $ 567,000 in utilities. The program distributed $ 12,557,756 in rent assistance and $ 417,721 in utility assistance, as well as another $ 548,727 in rent and $ 42,240 in approved and pending utilities to applicants.

The legislator’s projections

Evslin considers the passage in October 2020 of County Bill 2774, which amended zoning requirements in an attempt to generate housing growth, and the council’s recent passage of a conversion program of sumps, as two important steps on the long road to easy access, affordable housing.

The septic tank sump program, Evslin explained, is intended to alleviate a chronic lack of infrastructure that is preventing many Kaua’i households from building additional affordable rental housing on their property.

“Allowing ARUs almost across the island has essentially doubled everyone’s density distribution for residential properties anywhere outside of Hanalei and Ha’ena,” Evslin said. “But you can’t enjoy any of that if you’re not in the sewers, for the most part – and you certainly can’t do anything if you have a sump.”

Nearly half of the 40,000 homes on the island have sumps, according to Evslin.

The program, which will be implemented by the CHA, will use $ 1.2 million in forgivable loans from amounts paid by the Federal Environmental Protection Agency.

Evslin, along with board member Bernard Carvahlo, also introduced a bill that would prevent future developers from creating covenants, conditions or restrictions that prevent landlords from renting private space.

“The development model on Kaua’i is to do these high-end developments, which are sort of proprietary in nature,” Evslin said. “They’re made to meet the highest income earners, and they make it so that you can’t even get rental housing or house your kids.”

Evslin has also set his sights on vacant property and temporary vacation rentals, saying wealthy people outside Kaua’i have “parked” their money in local homes to take advantage of low property taxes.

The council member estimates that 180 Kaua’i homes are currently vacant, having been purchased as investments or second homes.

“We have to discourage this through property taxes,” he said. “If you keep a house empty, then you should pay a lot more for it, to make sure we can build a house for someone else.”

Current projects

Roversi reported that CHA has issued requests for proposals for 85 affordable rental units in its Lima Ola development in ‘Ele’ele.

The agency will release additional requests for proposals for 38 single-family homes and a 24-unit assisted living project for homeless families in Lihu’e this month.

Its affordable 53-unit rental project on Pua Loke Street in Lihu’e, developed by the Ahe Group, completed construction of its third and final building earlier this month.

Other initiatives underway include a growing number of federal Section 8 rental assistance vouchers; continued research into affordable housing in Kilauea; and the acquisition of three single-family homes to rehabilitate and sell to eligible local residents.

An annual one-time count of Kaua’i’s homeless population and community planning for affordable housing on part of the county’s Waimea 400 property is also planned for early 2022.

Meanwhile, Kaua’i Habitat for Humanity is completing phase two of its “Ele’ele Iluna” development in the western part of the island, which will total 125 affordable housing units when completed.

“Of the seven Habitat subsidiaries in Hawai’i, Kaua’i Habitat is the only one actively pursuing development of subdivisions to address the housing crisis,” said Executive Director Milani Pimental.

Kaua’i Habitat, which has built 200 homes and rehabilitated 36 others since its inception in 1992, is also working on a development in Waimea.

“We’re just getting ready, pending final approvals, so we can start building our 32 single-family homes on the property,” Pimental said.

The Waimea site already has 35 collective rental housing units built by the Ahe Group.

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Scott Yunker, journalist, can be contacted at 245-0437 or [email protected]