Report: Honolulu consumers spending greater percentage of income on housing

Published: Apr. 25, 2016 at 8:21 PM HST|Updated: Apr. 25, 2016 at 10:57 PM HST
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(Image: Hawaii News Now)
(Image: Hawaii News Now)

HONOLULU (HawaiiNewsNow) - Honolulu consumers spent 43 percent of their incomes on housing in 2014, up from 32 percent a decade earlier, according to a new state analysis.

The report also found that more than $7 of every $10 Honolulu consumers spent in 2014 went to three basic needs: housing, food and transportation.

Experts say the analysis underscores the high cost of living in the islands, and the burden skyrocketing housing prices are placing on families. Economists typically say households should spend no more than 30 percent of their incomes on housing, though they also acknowledge the guideline is no longer realistic for many markets.

Last month, a survey found that 48 percent of Hawaii households are living paycheck-to-paycheck, and 95 percent said the high cost of housing was a major problem in the islands.

Carl Bonham, executive director of the Economic Research Organization at the University of Hawaii, said the state-funded analysis released Monday doesn't just show how residents are spending their money -- but how they're not spending it.

"They aren't devoting resources to retirement savings, education, investing in their ability to improve their standard of living," he said.

Still, Bonham says there is some good news in the numbers.

For one, the consumer spending report shows that the overall economy is strong, he said.. The report also found that while Honolulu consumers spend more on food than their mainland counterparts, food isn't eating up a bigger share of Hawaii budgets compared to a decade ago.

Other highlights of the report include:

  • Honolulu consumers spent 15 percent of their incomes on food, or about $9,171.
  • Spending on transportation decreased: Consumers spent 14 percent of their incomes on getting around, compared to 18 percent in 2004.
  • Honolulu consumers spent more of their incomes on housing than their mainland counterparts (43 percent vs. 33 percent).
  • Homeowners with mortgages spent 46 percent of their incomes on housing-related expenses, which works out to about $38,000 a year
  • Meanwhile, renters spent 47 percent of their incomes on housing, or about $24,000.

David Kim is the owner and designer at Oiwi Ocean Gear, and says the cost of living in the islands is a constant topic of discussion in his household.

"It's always going to be an issue here. It's going to be a breaking point for a lot of people," he said. "My wife and I talk about it: Do we stay, do we leave?"

He and his wife bought a condominium back in 2008, and said many Honolulu families face a constant juggling act.

"Putting your kids in private school, or paying your mortgage, buying a place, do you own one car or do you own two cars?" he said.

The spending report cost the state $100,000, and took about eight months to compile.


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