How much is your rent?

Of­fi­cials want to know af­ter HUD says it will trim ‘fair mar­ket’ costs

Hawaii Tribune Herald - - FRONT PAGE - By NANCY COOK LAUER

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 con­tracted SMS Re­search & Mar­ket­ing Ser­vices to send mailin 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 re-eval­u­ate, 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,” said Neil Gy­otoku, Hawaii Is­land hous­ing ad­min­is­tra­tor, 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 with $859 in 2017; for a one-bed­room unit, $907 com­pared with $991; for a two-bed­room unit, $1,189 com­pared with $1,271 and $1,495 for a three-bed­room unit 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, in­creased from $1,800 monthly in 2014 to $2,300. At Alii Lani, they’ve gone up from $1,600 to $1,900 dur­ing the same time pe­riod. One-bed­room units at Kailua Vil­lage 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 might 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 DayLum 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,” Cabral added.


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