December 2021 Email Update
November median sales prices for both single-family homes and condos matched records as supply constraints get worse. The median price of a single-family home was $1,050,000 (20.3% higher than November 2020) and for condos was $500,000 (19.0% higher than November 2020). Low interest rates continue to spur demand as the number of single-family home sales grew 21.4% and condo sales surged 57.7% compared to November 2020. While the number of new listings grew 9.4% for single-family homes and 15.1% for condos, the supply failed to keep up as the number of single-family homes under contract grew 9.3% and the number of condos under contract grew 50.3%. There is currently 1.0 months of single-family home inventory and 1.7 months of condo inventory and there are no signs the housing shortage will end any time soon. There are signs that the lack of affordable housing is limiting future median price increases as prices have remained steady at record levels over the past four months.
A combination of chronic federal underfunding of the military over the past thirteen years, bureaucratic bungling, and callousness has seriously damaged the U.S. Navy’s reputation within the ranks and may have caused serious environmental harm to Oahu’s water system. Several environmental organizations including the Sierra Club have been agitating to shut down the Navy’s 20 underground fuel tanks under Red Hill because they sit just one hundred feet above Oahu’s aquifers and a 2014 fuel leak raised structural integrity concerns. The Navy quietly shut down the Red Hill shaft on November 28th after military families started complaining that their tap water smelled like fuel or chemicals and several people and pets started to get sick. The Board of Water Supply shut down its Halawa shaft that delivered 20% of Urban Honolulu’s water as a precaution on December 3rd. The state Department of Health ordered the Navy to suspend operations at the Red Hill Bulk Fuel Storage Facility on December 6th, clean up the contaminated drinking water, and develop a plan to drain the fuel from the twenty underground storage tanks. Neither the Navy nor the state Department of Health (DOH) notified the public of the contamination even though samples from July through September showed fuel contamination. The Navy claims to have informed the DOH of the water testing results and the DOH failed to notify the public as well. Both the Navy and the DOH were refusing to answer questions concerning how early both organizations knew of the problem and why they waited until December 2nd to notify the public. The Red Hill shaft provided water to an estimated 93,000 people and six elementary schools. The Navy did not respond to the Honolulu Star Advertiser who requested a detailed account of those on the Red Hill shaft system and the DOH says they do not know. The military built the 78-year-old underground fuel tanks around World War II and appear to be well past their useful lifespan. The Navy may apply for a permit to resume operations the Navy has completed long-term repairs to the fuel tanks and corrected fuel oil operational deficiencies. To learn more about Red Hill Bulk Fuel Storage Facility's updates please click the link below:
A pandemic surge from the Delta-variant and a continued lack of international travelers has prolonged the pain for Hawaii’s travel industry but there are signs of brighter times. Travel numbers were within 10% of 2019’s totals in early September when the rapid spread of the Delta-variant filled Hawaii’s intensive care units (ICU) and resulted in Governor David Ige asking that visitors stay home. Visitor totals again reached within 10% of 2019 totals over the Thanksgiving weekend but spending was still down further due to a lack of big-spending international travelers.
Governor David Ige issued his latest COVID-19 emergency proclamation on November 29th that maintains the mask wearing mandate at indoor public venues, maintains the state’s Safe Travels requirements, and gives the mayors more latitude in changing social distancing rules without his prior approval. Mayor Rick Blangiardi quickly announced he would lift all capacity restrictions for large events, restaurants, and gyms starting December 1st. Large events, restaurants, and gyms must still follow Safe Access Oahu program requirements requiring customers to show proof of vaccination or a negative COVID-19 test in the past 48 hours to enter, and gym members must still wear masks. The city and state no longer require restaurants to conduct contract tracing and customers to wear masks outside.
Honolulu’s new $377 million rental car facility opened and Daniel K Inouye International Airport on November 30th. The Consolidated Rental Car Facility (CONRAC) opened with nine rental car brands (Enterprise, Alamo, National, Hertz, Avis, Budget, Dollar, Thrifty, and Sixt). The five-story structure across the street from the domestic terminal entrance will make picking up a rental car more convenient for visitors and improve automotive traffic flow through the airport. Rental Car Shuttles will no longer have to drive by the baggage claim areas to pick up their customers, freeing more space for family members and friends to pick up their guests. A consolidated busing system will pick up customers from more distant terminals reducing the number of shuttle busses and completion of the facility frees up about 1,000 parking spaces at the overseas parking garage. The complex can hold approximately 4,500 rental cars. To see pictures and articles related to CONRAC please click the link below:
The U.S. Navy’s newest warship, the USS Daniel Inouye, arrived in Pearl Harbor on November 18th. The Navy named the Arleigh-Burke-class guided missile destroyer in honor of the late Hawaii senator and war hero. One sailor assigned to the destroyer is the grandson of a man who worked with Senator Inouye and met him a few times as a child. Here's an interesting article about its journey to Hawaii, click the link below:
Governor David Ige has tilted the field in favor of public schools further by raising the percentage of low-income students from the federal recommendation of 40% to 47.2% to qualify for federal pandemic funding to pay for cleaning supplies and personal protective equipment. The federal government left it up to the states to determine the threshold and some states have lowered it to 20% of the student body in recognition of private schools’ efforts to stay open during the pandemic and instruct students. Hawaii public schools have lost an average of one-year of learning as teachers’ unions kept schools closed over fears of COVID-19 spreading from children to teachers. Many students fell behind as Hawaii’s state public school system also struggled to put a meaningful online program in place. Numerous articles highlighted Hawaii’s private schools’ effort to navigate the ever-shifting social distancing requirements to get students back into the classroom as quickly as possible. Most private schools do not have the endowments of well-known institutions like Punahou, Iolani, Midpac, and Kamehameha and operate on tight budgets. The governor and legislature may divert any unused funds to the general fund to spend as they deem appropriate.
If the Honolulu Police Department (HPD) wonders why some portion of the population holds animosity against the rank-and-file officers, then the latest effort by the State of Hawaii Organization of Police Officers (SHOPO) to reinstate a police officer helps answer the question. A third-party arbitrator ordered HPD to reinstate an officer who pled guilty to helping frame Katherine Kealoha’s uncle leading to the jailing of Katherine Kealoha and her husband, former HPD chief, Louis Kealoha. SHOPO has been successful in reinstating officers accused of crimes like domestic violence, falsification of records, kidnapping, and sexual assault as it exploits contracts that allow officers numerous chances to appeal disciplinary actions.
Honolulu Authority for Rapid Transportation (HART) Chairwoman and former congresswoman, Colleen Hanabusa, has started massaging the rail projects deficit numbers to help make them appear better than announced late last year. She has reduced the deficit number from $3.5 billion to $1.97 billion based on higher state General Excise Tax (GET) projections and a hoped-for percentage of the 3% county surcharge to the Transient Accommodation Tax (TAT) that the City and County of Honolulu Budget Committee approved on 11/17/2021. HART interim CEO, Lori Kahikina, has laid off employees and fired contractors to save money and continues to search for cost savings. Kahikina is in talks with the board to become the permanent CEO and Hanabusa has not ruled out a 2024 run for governor.
The Honolulu City Council continues to try and find ways to raise taxes and dodge voter accountability. This time it comes in the form of a 3% hotel tax for Oahu visitors. The city council plans to use the revenue to help shore up HART’s beleaguered rail project and add money to the city’s general fund.
The Hawaii Housing Finance and Development Corp. (HHFDC), a state agency overseeing affordable housing, is trying to sell its last complex to a private developer after concluding the private sector serves tenants better than government organizations. HHFDC envisions the investor operating under a 75-year land lease and providing on-site support services in addition to maintaining low-income housing. The sale would complete an eight-year project to sell a portfolio or low-income rental housing inherited from a predecessor agency.
Queen’s Medical Center is planning a $1 billion expansion of its Punchbowl Street campus in response to intensive care unit (ICU) capacity constraints exacerbated during the patient surge from the COVID-19 delta variant in August and September. Queen’s ICU has been running at full capacity over the past six years and had to scramble to modify other spaces to care for an additional thirty patients suffering from COVID-19. The expansion will double Queen’s ICU capacity and take place in four phases over the next 15 years. The project involves tearing down buildings, some of which are 80 years old, and replacing them with larger, modern structures. Queen’s submitted plans to the City and County of Honolulu for initial approvals to start next year and Hawaii can only hope that the city bureaucracy will prioritize approvals so that the critically needed infrastructure project does not suffer the same delays that is hamstringing Hawaiian Electric Company’s (HECO) Battery Bonus program. Here are some pictures of the project:
A November 12 article by the Honolulu Star Advertiser draws more attention to Oahu’s coastal erosion and how Hawaii’s creaking bureaucratic system fails to keep up. A city ordinance created in 2015 taxes Waikiki commercial property owners to provide revenue for the city’s beach upgrade projects. The city drafted and published a version of the long-term solution involving installation of five new erosion-blocking groins, offshore rocky structures designed to break up the wave action and calm the water at Waikiki beaches, two years ago and the state legislature approved $12 million in funds to those improvements over two years ago. King tides in 2017 triggered accelerated erosion by the Halekulani Hotel and Outrigger Reef Hotel resulting in the collapse of a section of the city’s public access between the hotels spanning about fifteen feet. The situation has become a public hazard and waves are now directly impacting the Outrigger Reef Hotel’s foundation. Meanwhile, Governor Ige was attending the COP26 Climate Change conference, and his staff was unwilling to bother him. Governor Ige has since returned, and he has yet to address bogged down approval process. Waikiki associations and businesses worry erosion will cause far greater damage before the state gets around to approving the project that is six years in the making.
87% of Hawaii households that purchase flood insurance from the National Flood Insurance Program will see their rates increase when they renew their policies on or after April 1, 2022, while 13% will see a reduction. The new pricing methodology named Risk Rating 2.0 will factor in more criteria including flood frequency, multiple flood types, and distance to a water source in calculating the new rates. Flood insurance is mandatory for homes in flood zones “A” and “V” if the homeowner has a mortgage. “A” zones have a 1% chance of flooding each year and “V” zones that are typically coastal properties carry the same 1% chance with additional hazards from storm-induced waves.
151 World War II veterans whose ages range from 96 to 104 attended ceremonies to remember the Japanese attack on Pearl Harbor 80 years ago on December 7th. The gathering consisted of 32 Pearl Harbor survivors and 119 World War II veterans. Here's a story of a 101-Year-Old and his experience:
The University of Hawaii (UH) Rainbow Wahine volleyball team finished at the top of the Big West Conference with a conference record of 18-2 and qualified for the NCAA tournament for the 28th consecutive time. UH won their first NCAA tournament match against Mississippi State in five sets but were swept by 15th seeded Washington Huskies in a sign of the increasingly competitive nature of Women’s Division I volleyball.
The UH Rainbow Warriors football team received a surprise bowl invitation when the NCAA announced the creation of a 42nd bowl game on December 2nd. In a bit of irony, UH will have to play without its #1 quarterback and running back because they both entered their names in the transfer portal.
UH plans on expanding its Clarence T.C. Ching Athletics Complex, the home of on-campus football by a couple of thousand for next season. The stadium currently allows seating for about 9,000 fans and UH plans to increase capacity to over 15,000 by the start of the 2023 season. UH averaged 5,217 fans during the last two games but was unable to serve food and alcohol due to pandemic related restrictions and children could not attend. The student section was rowdy and full the last two games providing an encouraging sign for next year. UH wisely is investing in the on-campus venue versus waiting for the state’s new Aloha Stadium. UH Manoa shares an article about it, please click the link below:
Hanauma Bay Nature Preserve announced that it requires out of state residents to pay the admission fee online when making their reservations effective December 1st. Tickets to the incredible bay can sell out within five minutes of becoming available and the city parks service wants to reduce the number of no-shows. The City and County of Honolulu implemented the reservation system to limit the daily number of visitors to the preserve to prevent further degradation of the bay’s coral ecosystem. Hanauma Bay Nature Preserve is trying to ensure the limited number of times available are most efficiently allocated. Tim and Tracey recently swam in Hanauma Bay twice after more than a decade and marveled at the diverse marine life within the protected bay.
The North Shore’s surf season began with the announced holding periods for two big-wave contests, “The Eddie” and the Red Bull Magnitude, an all-women big-wave contest.
The Waialua Egg Farm opened for business in December and is set to sell its first eggs in the middle of the month labeled as “Waialua Fresh.” The farm uses solar panels to power its operations that also serve as cage free shelters for the hens. The operation includes a biochar reactor that converts chicken waste into fertilizer. Here are some photos and articles related to the farm:
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