High rent, low wages mean more people houseless

News Report
Colleen Sanders

KAILUA—One strategy to tackling houselessness is to examine the state of the rental market in comparison with earnings of lower income workers. According to the National Low Income Housing Coalition, Hawaii residents have it worst in terms of fair market rent. It’s a statistic that the Affordable Housing and Homeless Alliance in Kailua (AHHA) finds troubling.

With cost-of-living increases, paycuts, reductions in benefits, and layoffs contributing to a struggling national economy, curbing houselessness is no easy task.

Hawaii’s rental market is a competitive one as an island chain with a limited amount of developable land. Factor that in with a prevalence of low-income service positions and the presence of a university population in Koolaupoko, and the odds are stacked even higher against those who can’t afford housing.

“An average person that’s on minimum wage ... can’t afford a place on their own,” said AHHA site coordinator Paul Ruddell. “It’s not feasible. Often homeless people have come to a place where most of them are living on their own—a lot of adult singles. They don’t have the resources. They can’t just buddy up with a friend they’ve got. Even getting a decent job that will help them to afford rent is difficult enough.”

AHHA is a resource center for houseless persons trying to re-establish themselves in the working-and-renting economy. The center sees about 250-300 clients a month and provides food, clothing, blankets, legal services, case management, counseling, and transitional planning.

Ruddell works with the people whose economic situations have shifted to the point where they just cannot afford to rent.

“This housing issue is complex,” Ruddell said. “We can’t just point the blame and say why doesn’t the state do more?’”

“This housing issue is complex,” Ruddell said. “We can’t just point the blame and say why doesn’t the state do more? We understand, especially right now, they’re short on money. It takes collaboration and to talk as a community to say, ‘What do we want to do to reduce the cost of such high rent?’”

Minimum wage in Hawaii is $7.25/hour. The tax rate at that level is .068 cents on the dollar. Assuming a person has worked 40 hours per week, 52 weeks a year, that amounts to $15,080. The amount of state tax collected on that salary is $1,025.44, amounting to a net annual income of $14,054.56.

If that person takes the lowest rent on the market, say a $600 room in a home, they’ll spend $7,200 annually on rent, or half their total income.

The National Low Income Housing Coalition estimates that in order to afford the fair market rent for a two-bedroom apartment, a minimum wage worker in Hawaii must work 163 hours per week, 52 weeks per year. Or a household must include 4.1 minimum wage earners working 40 hours per week year round in order to make a two-bedroom affordable.

The reasons for becoming or staying houseless are often compounded by factors aside from wages such as having disabilities, being unable to work, or being foreclosed on.

“They don’t really have many options, which is really sad,” Ruddell said. “Sometimes they had a criminal background, sometimes it’s an injury problem, sometimes they just lost their job and couldn’t get another one because the job market is really tight right now. ... Sometimes they need to see a doctor and they don’t have the right medical insurance and we help them with that. Sometimes it’s as simple as getting an ID and birth certificate. Without that you can’t get a job, can’t get a place. All these things people [who are not houseless] take for granted.”

Ruddell said that the rental market underlies the entire issue on the Windward side because there are no low-income housing opportunities.

“[Low-income housing] is so needed here,” Ruddell said. “Say you grew up in your neighborhood. If you’re not used to living in Waianae or Kapolei, where the majority of the shelters are, you’re going to have reservations about going there. Some people say it’s because they don’t want to listen to the rules. Some are like that, but others don’t want to live out that far. It’s not close to jobs. They don’t have transportation. What are they supposed to do?”

The need for work is greater than the need for shelter, Ruddell explained, and people who need shelter will go to where the work is available. Breaking the cycle comes down, then, to a matter of allocating funding for homeless services in areas where people are struggling to find work.

“The State gives preference to the Leeward side [for funding houseless services],” Ruddell said. “That is because the numbers are higher on the Leeward side, that’s true. But it makes it that much more difficult for people on the Windward side.”

There are currently no immediate government options to assist houseless people in securing shelter. The wait for federal public housing can take as long as 5 years. Hawaii’s Rent Supplement Program with an aid cap of $250 per month was closed indefinitely in August 2008 because the wait list had grown too large.

Emergency shelters that are available throughout Oahu, like Kailua’s Family Promise, do not have the resources that the growing houseless population needs, Ruddell said.

The long-term goal is more than just emergency help, he explains, but about building capacity so houseless people can become sustainable again.

“You want to dig deeper and see what resources the community has to educate and train them so they can find the jobs they need to have a place,” Ruddell said. “What can we do to lower rent to make it affordable for someone who wants to rent a place in their neighborhood? In Kailua, you get a small studio for $700, $800. That’s just normal. You might get lucky and find one for $550 to $600 maybe. It does fluctuate a little bit. The going monthly rate for a two-bedroom apartment is about $1,509, up 71 percent from 2001. It’s quite scary.”

Ruddell also attributes high rental prices to an influx of college students into neighborhood areas.

“There’s not enough rooms in dorms so students go out into the community looking for rooms to rent,” Ruddell explained. “What does it do? It changes the market. People living in those communities are ending up displaced because students can pay for a higher rent. That is a community issue and a problem people need to know about.”

Ruddell recommends that the state set regulations on keeping housing affordable for the average person.

Pointing the blame is not part of AHHA’s solution. The responsibility of addressing houselessness is everyone’s to share, Ruddell said, that is solved first by educating the community as a whole.

“It takes churches,” he said. “Sometimes they’ll give a deposit on the first month’s rent. There are people who donate clothing and food. Then there’s the homeless person’s part. They have to do the part of realizing they can make it. Don’t give up.”

Related links:

Affordable Housing and Homeless Alliance

Income tax calculator

Cost of living comparison between major U.S. cities

Rental data for Honolulu

Demographic and rental data

Hawaii Public Housing Authority