HONOLULU (HawaiiNewsNow) - Building, business and government leaders gathered Tuesday to discuss the skyrocketing prices and limited supply that are contributing to the state's housing crisis. The consensus: Hawaii needs more homes across all price points to slow the dramatic increase in housing costs.
"The sense of urgency is that we live in an interest rate environment that we may not see again in our lifetime, so let's finance long-term debt to create more housing," said Stanford Carr, chief executive officer of Stanford Carr Development, the builders behind a successful workforce housing rental project in Kakaako.
The median home price in Hawaii reached an all-time record of $730,000 this September, and analysts say it could hit the $1 million mark in a few years.
Experts say the problem can be boiled down to this -- land is limited and so is Hawaii's housing supply.
Economists and legal analysts also suggested over-regulation shares some of the blame, specifically secondary reviews by the counties once the state Land Use Commission have signed off on a project.
"Today it's just another level of costs and it raises the costs of a project," said Sumner La Croix, a University of Hawaii at Manoa economics professor. "It takes the time for a project to come to fruition and moves it way out into the future. This is the type of uncertainty that developers don't like and so we're seeing fewer projects being proposed."
In fact, experts say a significant chunk of the cost of housing stems from the length of time it takes for a project to come to market, in some cases 12 to 14 years.
If the government would remove regulatory barriers and work more closely to negotiate with developers, that would spur more construction, they argue. They also say say the tools exist and the time is now to address critical housing needs that will only get worse without intervention.
Officials pointed to transit-oriented development, or TOD, as having huge potential for addressing the lack of affordable and workforce housing.
"The key is that the capacity is there around rail stations to provide a significant amount of housing. Initial counts in all the TOD plans indicate there's room for about 55,000 units, so that's a couple decades worth of production. 55,000 units is close to what the statewide need for affordable housing is," said Harrison Rue, the city's community building and TOD administrator.
Experts say another major factor that's limiting construction is the state's aging infrastructure; they say the burden of maintaining and improving can't keep getting handed off to developers.
"I think regulation reform is the key, together with incentives for constructing low-income housing. It's got to be incentivized," said Callies. "That's where it works, if at all."
This story is part of an ongoing series, "Priced out of Paradise," in which Hawaii News Now will explore Hawaii's high cost of living and why so many island families are struggling to make ends meet.