HILO — This is probably news to most Big Island tenants, but, according to the federal government, rental costs here have dropped. ADVERTISING HILO — This is probably news to most Big Island tenants, but, according to the federal government,
HILO — This is probably news to most Big Island tenants, but, according to the federal government, rental costs here have dropped.
The U.S. Department of Housing and Urban Development is trimming the cost of what it calls “fair market rents” on Hawaii Island and Oahu. Fair market rent numbers are used to set how much the federal government subsidizes local governments, nonprofits and residents for low-income and homeless housing programs such as Housing Choice, Section 8, Continuum of Care and public housing units.
In response, county and state officials have contracted SMS Research &Marketing Services to send mail-in surveys to households on Oahu and the Big Island, asking them how much they’re paying in rent. The data will be used to ask HUD to reevaluate, and hopefully raise, its figures.
“Voucher holders already have a difficult time finding safe, decent and affordable rentals within the range of HUD fair market rents,” Neil Gyotoku, Hawaii Island housing administrator, said in a statement. “Decreasing fair market rents will worsen the situation, especially in high rent areas such as West Hawaii.”
Only countywide average rents will be reported to HUD and individual responses will be destroyed at the end of the survey project. Data will be not used for any other purpose and kept strictly confidential, officials said.
Under the changes to take place next year, monthly fair market rent on Hawaii Island for an efficiency unit will be set at $789, compared to $859 in 2017; for a one-bedroom unit, $907 compared with $991; for two-bedroom, $1,189 compared with $1,271 and $1,495 for three-bedroom compared with $1,629 this year, according to the HUD website.
The numbers are based on estimates from the U.S. Census Bureau’s American Community Survey.
Have rents actually dropped on the Big Island?
No, says Gretchen Osgood, a Kailua-Kona Realtor who manages 20-25 rental units in addition to her own properties.
Two-bedroom units at Kona Sea Ridge, for example, have increased from $1,800 monthly in 2014 to $2,300. At Alii Lani, they’ve gone up from $1,600 to $1,900 during that same time period. One-bedroom units at Kailua Village have increased from $1,200 to $1,500.
“Rents are definitely going up,” Osgood said. “It’s definitely supply and demand. There’s not enough supply.”
Osgood thinks the values may be lowered because of the influence of the east side of the island on the west side. The federal government considers the island as a whole; a factor that also caused a reduction in home prices that qualify for Federal Housing Administration, or FHA, loans, she said. As one of the more popular loan programs, lowering the ceiling for qualified purchases makes it hard for buyers to qualify for low-interest mortgages.
“It could be that Hilo numbers are pulling our numbers down,” Osgood said.
On the east side of the island, rents are starting to go back up after prices decreased during the Great Recession, said Nancy Cabral, owner of Coldwell Banker Day-Lum Properties. She said just about all the properties she manages will see rent increases of 5 to 7 percent beginning in January.
Average monthly rental for houses and apartments in Hilo is $1,500, she said. Apartment rents generally include utilities.
“It’s certainly not an easy choice,” Cabral said, “but the owners still have to pay for maintenance.”
Osgood and Cabral are on the same page as Gyotoku as far as the importance of households filling out and returning the surveys.
“I think anyone would want to send them back,” Osgood said. “I think it would benefit everyone.”
“Everybody just wants to have the right information,” added Cabral.
