United States. Congress. Senate. Committee on Indi.

Native Hawaiian housing and home lands : hearing before the Committee on Indian Affairs, United States Senate, One Hundred Fourth Congress, second session, on housing needs of Native Hawaiians, July 3, 1996, Honolulu, HI online

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households account for a rather large share of the affordability gap (17 percent). The gap for
Native Hawaiian households living in central Honolulu is relatively small ($9.4 million or $900 per
Native Hawaiian) given that 24 percent of all Native Hawaiian households reside in the capital.
The largest gap ($21.5 million or $1 ,280 per Native Hawaiian) is among owners and renters in
Honolulu county outside of central Honolulu, representing about half of the total amount needed
to make up the difference between what Native Hawaiian households paid for housing and what
they could reasonably afford to pay.

" The calculations of a gap presented In this figure are calculated using Income that Includes some subsidies like
nnost Income support payments but excludes tax exemptions and other less direct forms of subsidy. In order to arrive
at a more exact measure of the depth of the affordability problem, Ideally the subsidies should be removed from the
income calculation.


Housing Problems and Needs of Native Hawaiians














RE, 1990






1 A<S 1


nil ^M

1 4J 1

^ ai HH


tMta HomMh







t: Urbwilr

■Mub TatNMnra. PUMS


In order to understand ttie implications of future demeind for housing, some assumptions
need to be made about future growth of households. In this manner, policymakers can determine
where growth is most likely to be.

Native Hawaiian Household Formation in the 1990s

One useful way to assess emerging areas of housing needs is to project the future growth
of households based on assumptions about components of change. A common technique used
to project household formation is the headship method, which involves two steps: projecting the
adult population by age, then projecting the number of households that will be formed by
estimating the percentage of the population of a given age who will become the head of a

Table 5.5 reports estimates of changes in the number of Native Hawaiian households
through the year 2000 for the four areas for which it was possible to compute migration data from


Housing Probloms and Needs ot Native Hawaiians











Honolulu County





Hawau County





Maui and Kauai Counties















Total Native Hawaiian





the PUMS: Honolulu county, Hawaii county, Maui and Kauai counties, and the U.S. mainland.
The projections assume that the headship rate for Native Hawaiians will remain unchanged from
1990 to 2000, and that, in each five-year period in the 1990s, Native Hawaiians will migrate
between areas at the same rate that they did between 1985 and 1990.^-

By modeling household tomiation in this way, we estimate that Native Hawaiian
households will increase by 30 percent between 1 990 and 2000. The fastest rates of growth will
be in Hawaii county and the U.S. mainland. In absolute terms, among the three areas identified
within the state, the highest growth is still projected for Honolulu county. However, it is estimated
that in the year 2000 Honolulu county will produce a smaller share of the growth of new Native
Hawaiian households than it held in 1990 (57 percent versus 65 percent). During the 1990s,
Hawaii county will account for about a quarter of new Native Hawaiian households.

Housing Prospects

Our estimate of household fomriation by Native Hawaiians between 1990 and 2000 shows
that Native Hawaiians will be especially affected by the continuing shortage of housing in Hawaii.
Because of their relatively youthful age structure, the Native Hawaiian population is in a period
where rapid household fomiation would ordinarily be expected. However, actual household
formation will probably not occur as expected if suitable housing (that is affordable and provides
enough space) remains in short supply. The fact that a large proportion of Native Hawaiian
households include subfamilies is one indication that this slowdown in new houseliold fonmation
may already be taking place.

" A description of methods used to make the reported projections appears in Annex of this report.

HouBing Pmbltrm and N»»da o1 Native Hawaiians gg

If we estimate the share of overcrowded Native Hawaiians in 2000 by using the sanne
share of households found to have an overcrowding problem (28 percent) applied to the numtter
of projected households, we arrive at 15,800 households. This figure is indicative of a growth rate
of about 500 households per year. Section 3 of this report showed that about 27 percent of all
Native Hawaiian households were low-income. Of these low-income households, about 68
percent or 7,800 households experienced one or more housing problem in 1990. If we apply
these shares to our projections of Native Hawaiian households, we find that the numtjer of low-
income households with one or more problem in the year 2000 will increase to 10,300
households, or an increase of 32 percent.

The study team also projected the total population of Hawaii through the year 2000. The
Census Bureau estimates that the population for the state of Hawaii on July 1, 1994 was
1.780,000, a 1.48 percent annual increase from the 1990 Census (U.S. Bureau of the Census
1995). Assuming that household size remained constant from 1990 to 1994, this means that the
number of households in Hawaii increased from 356,000 to 379,000. Projecting this same growth
rate to the year 2000 yields 413,000 households, an increase of 16 percent."'

The implication of these factors is that the supply of housing units in Hawaii affordable and
large enough to house Native Hawaiian families will not keep up with demand." According to
our estimates, Native Hawaiians growth rate will outpace the one for all households in Hawaii
through the year 2000 by almost a factor of two. This implies that more and more Native
Hawaiian households will compete with other groups with similar needs for access to affordable,
safe, and appropriately large housing. Unless there is an increase in the supply of housing, the
housing problems of Native Hawaiians will grow at greater rate than for non-Natives in the 1 990s.


Clearly, Native Hawaiian housing needs are severe, with half of all such households
experiencing some type of problem. Problems are greater than those of non-Natives who reside
in the same environments. While the incidence of affordability is approximately the same for both
groups, the incidence of overcrowding is much higher among Native Hawaiian households.
Structural problems are low for both groups.

"This figure is identical to that derived (rom using the State of Hawaii M-K projections nriodel (DBEDT 1988). The
M-K protection imdel Is a sophisticated nr>odel that predicts population in conjunction with predictions of econornc
activity In the state.

" The Hawaii Housing Policy Study conducted in 1992 estimated pent-up demand for housing in Hawaii for 28,000
units and a projected shortfall by the end of the century of more than 20,000 housing units These figures apply to the
entire state and s«em to be compatible with the state housing agency's (HFDC) estimates of projected housing demand.


Housing Problems and Needs of Native Hawaiians

The finding that Native Hawaiian housing needs are fundamentally different than that for
non-Natives is important because it should impact policy. Since we can discern a difference in
housing problems based on characteristics of the population rather than on market factors alone,
policies to meet Native Hawaiian housing need must tal<e this finding into consideration.


Section 6


There are two main limitations of this discussion of policy implications. First, in contrast
to the companion study of Housing Problems and Needs of American Indians and Alaska Natives,
the scope of work for this study did not include an analysis or evaluation of existing housing
programs addressing housing needs of Native Hawaiians or other populations in Hawaii. Rather,
the study team's mandate was to draw on the policy recommendations and findings of the
companion study when they were relevant to the needs identified in this report. Second, the
Census data used for this study do not identity Native Hawaiians according to degree of Native
Hawaiian ancestry, therefore, it was not possible to address the specific needs of Native
Hawaiians who are potential beneficiaries of the Home Lands trust.

Summary of Native Hawaiian Housing Needs

Native Hawaiians experience a disproportionate share of housing problems among
Hawaii's households. Approximately 28 percent of Native Hawaiian households (1 1 ,700 of them)
pay more for housing than they can afford. Because of high housing costs, some Native
Hawaiians in all environments are forced to share their housing with other families in order to
meet the cost of housing. This leads to overcrowding — the most acute (28 percent) housing
problem experienced by Native Hawaiians. Many Native Hawaiians suffer from both
problems — affordability and overcrowding.

High housing costs impact on the ability of younger households to access housing;
Census data reveal that a large portion (42 percent) of Native Hawaiian households with a
householder below the age of 30 experiences an affordability problem (versus 28 percent for the
all Native Hawaiian households). During the late 1980s, in particular, median house prices
increased dramatically, increasing from $159,000 in 1986 to $360,000 in 1991. The estimated


Housing Problems and Needs of Native Hawaiians

probability of a Native Hawaiian household with income less than 80 percent of the regional
median owning a home in 1990 was only 29 percent.

A survey of housing needs in Hawaii, conducted in 1992, revealed that 76 percent of
Native Hawaiians householders who planned to move out of the state were influenced by housing
costs. The importance of high housing costs in the decision to migrate is not surprising given the
affordability problem for young householders.

Comparisons of standard measures of housing need for populations outside of Hawaii
confinm relatively high rates of need for Native Hawaiians. Native Hawaiians experience rates of
housing problems far in excess of those of the general American population. Native Hawaiians
are also more likely to experience a housing problem than are American Indian and Alaska
Natives living in either Tribal Areas or metropolitan areas, though the problems of these groups
are somewhat different. AIAN households are less likely to have an affordability or crowding
problem, but are more likely to experience a facilities problem.

Existing state and federal housing and development programs currently appear not to
serve Native Hawaiians in accord with their needs. Hawaii Housing Authority (HHA) data for June
1994 show that 25 percent of households served had a Native Hawaiian household head.^^ The
2,285 Native-headed households served by the HHA in 1994 represent only about one-seventh
of the almost 17,000 Native Hawaiian-headed households with at least one housing problem in

These needs differ in both kind and degree depending on location and ownership type.
For example, while one-fifth of Native Hawaiian households living in Maui or Kauai counties have
an affordability problem only, almost 30 percent of Native Hawaiian households living on the Big
Island of Hawaii have such problems. There are also marked differences between housing needs
of renters and owners. The share of Native Hawaiian renters on the Big Island of Hawaii with an
affordability problem is neariy twice the rate for Native Hawaiian renters on Maui and Kauai. The
share of Native Hawaiian owners with an affordability problem on Hawaii is actually a bit smaller
than that of similar Native Hawaiians living in the other two counties.

" Participation in housing programs by Native Hawaiians varies. For example, Native Hawaiians represent 22
percent of all public (federal and state) housing tenants and 29 percent of all section 8 certificate and voucher

" This figure is calculated using the Census PUMS for households with a Native Hawaiian head only, which is the
definition used in the HHA tabulation. As noted in Section 1 of this report, Urban Institute tabulations presented here
are for a somewhat larger population of households with a Native Hawaiian head or spouse.


Housing Problems and Needs of Natve Hawaiians

Policy Implications of Identified Housing Needs

Given the extent of housing needs among Native Hawaiians, many of the basic policy
implications emulate those for Native Americans on the mainland.

■ The unique housing needs of Native Hawaiians require unique solutions.

■ The diversity of Native Hawaiian housing needs requires flexible responses so
that limited available public funding assistance may be used with maximum

■ Public policy should support an environment in which public and private sector
resources are used to address the housing needs of Native Hawaiians, as

Unique Solutions for Diverse Needs

Native Hawaiian housing needs in Hawaii reflect important differences from non-Natives.
Native Hawaiians are less likely than non-Native residents to migrate away from Hawaii in
response to a housing problem, more likely to share their households among more than one
family, more likely to be supported by the earnings of high school rather than college graduates,
more likely to have low or very-low incomes, and more likely to use their income to pay the
expenses of a large number of household members.

Given the unique needs and conditions of Native Hawaiians in Hawaii, an optimal housing
policy for Hawaii should incorporate the special situation of Hawaii's indigenous peoples in
allocating resources to address critical housing needs. For example, the extent of affordability
problems found among Native Hawaiian households could be alleviated through community
development programs. In this regard, the Office of Hawaiian Affairs has advocated community
development in conjunction with increasing the availability of affordable housing. An equally large
group of Native Hawaiian households who are impacted by overcrowding could be helped by
reducing or eliminating constraints such as a cumbersome regulations and permitting processes,
and land use zoning. Some Native Hawaiians may draw on the resources of the Hawaiian Home
Lands Trust, which might be used to leverage other assistance more efficiently.

Maximize Flexibility of Government Assistance

An important finding from the companion study of Native American and Alaska Native
housing needs is instructive. The two principal HUD programs for assisting Indians are the Rental
and Mutual Help programs. Although these programs have been very valuable in helping meet


Housing Problems and Needs ot Native Hawaiians

the housing needs of Native Americans and Alaska Natives, their efficiency has been limited by
lack of flexibility. Targeted at low-income households living on tmst lands and frequently requiring
adherence to regulations more appropriate to urban than to rural housing, these programs have
often resulted in inflexible and inefficient requirements.

Despite HDD's recent easing of the regulatory rules for administering its AIAN programs,
statutory restrictions remain. Consequently, the study of American Indian and Alaska Native
housing needs recommends consolidating and reducing the restrictions of federal programs
providing housing assistance to American Indians and Alaska Natives and moving in the direction
of relatively unrestricted block grants. The objective is to accord local recipient agencies
maximum discretion in using federal funds, enabling them to tailor the form and amount of
assistance to specific /oca/ household need. Similarty, public funds — federal, state, or local — can
be used to address the housing needs of Native Hawaiians if appropriate housing agencies (new
or existing) are allowed flexibility. It appears that local self-detenmination of needs may lead to
more efficient allocation of resources.

In urban environments such as metropolitan Honolulu, programs that promote
homeownership may not be the most efficient way to use housing subsidies. Here the private
sector can play an important role because of the presence of both Native and non-Native housing.
Housing will become available within the private sector in response to subsidy-augmented
demand by low-income households. The obvious policy implication is that direct demand-side
assistance through housing vouchers or certificates is likely to be the most efficient approach to
addressing housing needs in these areas.

In areas such as the Big Island of Hawaii and the island of Molokai, the problem of
housing affordability may be less related to housing cost — housing on those islands is relatively
inexpensive compared to housing on Oahu and Maui — than to the need for economic
development to generate income to pay for housing constmction and infrastructure. In this
respect, Native Hawaiians, like Native Americans on the mainland, may find it profitable to use
housing construction programs to stimulate other economic activities for Hawaiian communities
that are isolated from the state's principal growth centers.

Special needs (disabled, homeless, etc.) populations will require assistance that often
cannot be found within the limitations of existing programs. For example, the 6,800 Native
Hawaiian renter households (16 percent of all Native Hawaiian households) that are very low
income and have one or more housing problems may not be well served by ordinary policies to
promote homeownership, even those households that are able to secure a lease on an improved
Home Lands homestead. Similarty, most of the 800 elderty Hawaiian renter households are
probably not good candidates to assume long-temi mortgage obligations, and may need to have


Housing Problems and Needs of Native Hawaiians

housing needs supplemented by social or medical services. For these households, programs for
Native Hawaiians need the flexibility to consider altemative models of housing assistance.

For example, the proposed construction of a Kupuna (elderly) housing project on
Department of Hawaiian Home Lands in Waimanalo on the island of Oahu may, if its potential is
realized, better serve the needs of Home Lands beneficiaries than the typical single-family home
that has generally been produced on Home Lands in the past. Creative experimentation with
altemative constmction materials and building standards may, in some cases, reach populations
that would ordinarily be foreclosed from participation in most housing production programs.
Though experience in MAN areas suggests that programs like Mutual Help have many limitations,
they may be the most effective — or only — way to serve some populations.

Along with program flexibility, however, must come technical assistance, planning, and
accountability. Local administrative entities must have the capacity to develop and operate their
own programs, particulariy if they are expected to tailor those programs to specific local housing
needs. In many cases, this will mean added staff and other resources, added staff training, or
added technical assistance.

Identifying local needs, especially long-term need, is not always straightfonward and
planning is essential. In addition to helping local entities to identify local needs and develop
programs to address those needs, a housing assistance/development plan also provides an
accountability reference point for assessing how well needs are being addressed. In sum, at the
same time that local administrative entities are being provided public financial assistance with
minimal restrictions on their use, they must also be given assistance to ensure that they have the
necessary capacity to create and operate the programs, and that there are systems to ensure

Relying on Local Market Intermediaries

An important need in AIAN areas is for local entities to develop and operate effective
housing assistance programs with public funds. This need appears to be equally important in
meeting the needs of Native Hawaiians. For both the AIAN and the Native Hawaiian populations,
local entities are key to linking the public and private housing sectors and to help create a more
supportive private housing environment.

Nonprofit housing producers in the U.S. have become important partners in the production
of affordable housing, accounting for more than 30,000 units and almost 20 percent of federally
assisted housing units constaicted each year in the eariy 1 990s. Nonprofits are playing a growing
role in leveraging financing from multiple public and private resources, and are increasingly
assuming the broader roles of community developers and social service providers, as adjuncts


Housing Problems and Needs of Native Hawaiians

to their roles as developers of affordable fiousing. Nonprofits can often serve usefully as
intermediaries linking ottierwise reluctant private and public financiers and equally wary

Using Home Lands lUlore Efficiently

The land tnjst established for Native Hawaiians with 50 percent Hawaiian ancestry has
not lived up to its promise as a source of housing for the beneficiary population. One reason is
the poor quality and remote location of many of the lands assigned to the Home Lands inventory,
f^uch of the land inventory is unsuitable for settlement, and costs of infrastructure development
are high. In addition, neither the federal government, which established the Home Lands Taist,
nor the state of Hawaii, which assumed primary responsibility for the Trust under the terms of the
Admissions Act and the State Constitution, has financed the Act with adequate funding.

Recent actions by the state have, however, put significant new resources at the disposal
of the Department of Hawaiian Home Lands. The state of Hawaii has recently added 16,000
acres of public land to the inventory of the Department of Hawaiian Home Lands (DHHL). These
lands are said to be of significantly better quality and more conveniently located for access to
major economic centers than the remaining undeveloped land in the Home Lands inventory. The
state has also committed to settle claims about past misuse of Home Lands resources by
promising to appropriate $600 million over a twenty year period to the DHHL. These
commitments represents a substantial block of resources for potential development. However,
how the reallocated resources are used will also have a substantial effect on both the efficiency.
and the equity by which housing is made available to meet the needs of Native Hawaiians.

The supply of housing in Hawaii for eligible Home Land applicants will be significantly
augmented if the 1 6,000 transferred acres are subdivided into building lots and made available
at below-market rates to individual households at the top of the DHHL waiting lists for a
homestead lot. Yet, there are inefficiencies and inequities in this system of allocation. Certain
homesteaders receive deep subsidies implied in access to an improved house lot, while others
do not. Because the numbers of households in need will far exceed the numbers that can tie
housed on Home Lands, only a relatively lucky few will benefit from the program. Further,
targeting of this subsidy is implicitly dependent on ability to make a mortgage payment on the
dwelling unit rather than on need for housing.

For many Native Hawaiians, Hawaiian Home Lands stand for more than simply an
affordable housing program for currently underhoused Hawaiians. There are legal and political
constraints on what the DHHL can do with its resources. It is useful nonetheless to consider

For a discussion of housing non-profits on Guam see Mikelsons, Sinnonson, and Tatian (1994).


Housing Problems and Needs of Native Hawaiians

Online LibraryUnited States. Congress. Senate. Committee on IndiNative Hawaiian housing and home lands : hearing before the Committee on Indian Affairs, United States Senate, One Hundred Fourth Congress, second session, on housing needs of Native Hawaiians, July 3, 1996, Honolulu, HI → online text (page 31 of 34)