May 2021 Email Update
The April median price on Oahu for single-family homes was $928,000 (14.7% higher than April 2020) and for condos was $450,000 (the same as April 2020). Demand continued to strengthen with 51.2% more single-family homes selling and 88% more condos selling than last year and will remain strong with single-family home pending sales rising 74.4% and condo pending sales rising 115.1%. The supply of both single-family homes and condos have returned to numbers like those seen in 2019 but remains too low for the current demand. The Oahu real estate market will remain constrained by a lack of supply for the foreseeable future.
Tim and Tracey recently helped clients successfully complete a 1031 Exchange. They sold their Hauula oceanfront house and used the proceeds to purchase their oceanfront dream home in Florida. The photos of their Florida purchase are from Gibbs Baum of Sotheby’s International Realty. The details and photos are available on our blog. Here's the link to the article.
1031 Exchange – Hauula to FLORIDA
On April 9th, Hawaii Governor David Ige issued his 19th emergency proclamation related to the COVID-19 pandemic and extended the eviction moratorium through June 8th. A federal judge threw out a national eviction moratorium by the Centers for Disease Control and Prevention (CDC) ruling that the Public Health Service Act does not allow the CDC to establish such a mandate. The U.S. Justice Department appealed the ruling and requested an emergency stay of the ruling that would keep the moratorium in place until the appeal is heard. The ruling may allow states that decided against enforcing the eviction moratorium to start evictions. The ruling does not provide relief to landlords in states where state governments have ordered an eviction moratorium, like Hawaii.
Hawaii’s vacation rental market has been recovering faster than the hotel industry as visitors look for more private settings and amenities plus the ability to prepare their own food. Single-family homes allow travelers to control social distancing. The reduction in available hotel services like daily room cleaning, limited dining options, and limited amenities have reduced the service gap between hotels and vacation rentals. Some vacation rental management companies are reporting record occupancy rates for 2021 and compare the demand for single-family home vacation rentals to the demand for buying single family homes in Hawaii.
Howard Hughes Corp. received approval for its next two towers. The 546-unit Park Ward Village will offer market rent condos next to an expanded central park and the 697-unit Ulana Ward Village will offer affordable to moderate-income condos and satisfy the requirements that Ward Village make 20% of the housing available to affordable and moderate-income households. Construction is scheduled to start 1 ½ to 2 years from now.
Hawaii state government continues to make life more difficult for landlords that provide workplace housing. State lawmakers gave final approval to a bill that requires landlords to give fifteen-days-notice to terminate a lease for failure to pay rent up from five-days-notice, the notice must inform the tenants that they have fifteen days to schedule an optional free mediation, and the mediation must be presented to one of Hawaii’s five mediation centers. If a tenant chooses mediation, then the landlord must participate and cannot file eviction until 30 days after the notice is received. If a requested mediation does not occur before the case is heard in court, a judge can make sure it does. Another feature in the bill further regulates when a landlord can file eviction based on how much back rent is owed. If a tenant owes more than four months of past due rent, the landlord can file suit as soon as one day after the governor’s moratorium is lifted. The mandatory waiting period is about one month for three months of overdue rent, three months for two months of overdue rent, and five months for one month of overdue rent. The measures in the bill are currently temporary. The rules would end one year after they begin or the end of 2022, whatever date is sooner. The bill is being sent to the governor for signature.
Interisland travel will become easier for those who received vaccinations in Hawaii starting May 11th. Fully vaccinated individuals after a fourteen-day waiting period, will be exempted from the COVID-19 testing requirements when traveling between islands. The state has not announced a date when people who receive their vaccinations out of state will be exempt from presenting a negative COVID-19 test upon arrival to avoid the ten-day quarantine requirement.
The state of Hawaii is about to pay $370,418 to attorneys representing more than 2,700 Native Hawaiians that have spent decades on the waitlist for homestead land. The Hawaii Supreme Court rebuked the state last year in its ruling for its failure to reduce a growing waitlist of Native Hawaiians seeking homesteads. The sum is a small percentage that the state will be expected to pay once damages and the full costs of attorney fees are awarded to the plaintiffs. The land trust was created a century ago by the federal government and turned over to the state in 1959 to provide people at least 50% Hawaiian a 99-year lease for land at a rate of $1 per year. The Hawaii Supreme Court sent the case back to the Circuit Court to determine damages owed that will include compensation for rental payments incurred while on the waitlist. About 40 people have died so far during the lawsuit that spans twenty years and the plaintiffs are seeking compensation before more die. The heirs will receive damages owed by the state of Hawaii if people that are part of the class-action lawsuit pass away before the money is paid.
A state Department of Health (DOH) employee has filed a whistleblower report to the state legislature accusing the DOH of corruption and mismanagement that costs taxpayers and puts the public at risk. The employee said that his boss has failed to hire a division administrator for the past five years and has given himself and other managers temporary promotions at higher pay to be acting administrators. He also documents that the DOH purchased a theft alarm system five years ago paying $277 per month and has never turned the system on. The DOH director expressed disappointment that the employee did not bring up these issues with her versus going straight to the state legislature. The employee countered that he tried to set up meetings seven times with the DOH director and was rebuffed every time.
The federal government published the 2020 U.S. Census figures, and one noteworthy fact was that Hawaii was the 40thmost populous state. New Hampshire, Maine, Montana, Rhode Island, Delaware, South Dakota, North Dakota, Alaska, Vermont, and Wyoming all had fewer residents. Who knew? Here is a link to the published results.
2020 Census
Hawaii residents spend the most on average for monthly energy bills at $321 per month, more than three times as much as the cheapest state, Idaho. Hawaii’s electrical rates are about three times as much as the national average. The average Hawaiian household uses about 40% less energy than the national average.
The City and County of Honolulu accepted new applications for its Rental and Utility Relief Program on May 3rd after approving 600 applications for a total of $4.8 million in rent and utility relief out of the 8,000 applications submitted. The website was open for only 20 minutes when the 4,000-application limit was reached. The city is still processing about 2,000 of the first applications submitted. The city has $114 million to distribute by the end of the year and it will continue to focus on households earning below 50% of Oahu’s median income. Future rounds of applications will open the first working Monday of each month.
Honolulu Police Department (HPD) Chief Susan Ballard announced her retirement by June 1st after receiving a poor grade for her performance in 2020 including two reported areas that fell below expectations, leadership, and management. It was the first time the HPD chief received a poor review. Specific criticism included that Ballard “had a tendency to be dismissive and did not accept responsibility for concerns raised against the Department. At times, Chief Ballard did not accept constructive criticism and, within the Department, berated others in the front of their peers.” The evaluation cited the chief’s failure to take responsibility for the overtime abuse within HPD’s COVID-19 enforcement teams. The commission gave Ballard 60 days to address the list of items in her performance improvement plan that started on 4/15/2021. The police commission has started a nationwide search for Ballard’s replacement. The Honolulu Police Commission unanimously selected 21-year veteran Rade Vanic as interim police chief.
HART’s interim CEO, Lori Kahikina, appears to be cleaning HART’s house by firing almost half of the staff thereby eliminating redundancies and inefficiencies. While union officials fret about the loss of institutional knowledge, the Honolulu Star Advertiser’s David Shapiro counters that HART’s institutional knowledge of failure should not be a concern. Shapiro goes further by encouraging Kahikina to ignore the Federal Transit Authority (FTA) even if it means forfeiting federal funds because following the FTA’s rules has also resulted in failure. Mayor Rick Blangiardi publicly announced that HART’s rail system may not continue to Ala Moana as originally planned due to the $3.5 billion budget gap.
Mayor Rick Blangiardi’s homeless strategy is off to a rocky start since he abandoned Mayor Kirk Caldwell’s “compassionate disruption” approach to homelessness that involved sweeps of homeless encampments coupled with offering social service help. The owner of a Chinatown store stated, “you have to watch where you step because of the doo-doo,” and a Chinatown hairdresser owner starts each workday by hosing down human feces and urine in front of her shop that she has run for 31 years. About 30% of the Chinatown businesses have closed due to the pandemic restrictions and homeless are sleeping in the shuttered doorways since there are fewer available beds in the shelters. The city has stated that a new program will start in the summer involving social workers and medical specialists versus relying on HPD.
Mayor Rick Blangiardi and the city Department of Parks and Recreation announced that Hanauma Bay’s new online reservation system is up and running. Reservations for 64 daily slots can be made up to 48 hours in advance of the planned visit. The slots are available in 10-minute increments from 7:00 am to 1:40 pm Wednesday through Sunday (Hanauma Bay is closed Monday and Tuesday). The link to reserve a time is below. Word has spread quickly and there were no times available for the next two days when Tim checked on April 28th. To learn more please click the link below.
Hanauma Bay Nature Preserve
Crews started moving and leveling a hill of about 20,000 cubic feet of sand along an area of Waikiki beach from the Royal Hawaiian to Moana Beach that was recently dredged from offshore and deposited on Kuhio Beach. The hill measured 30 feet high and 100 by 200 feet at the base on April 26th. The city expects the sand replenishment project to be completed by mid-May in time for the Memorial Day Weekend.
Biki, Honolulu’s first bikeshare program, is reinforcing the city and state’s failure to establish self-sustaining initiatives that will not come back asking taxpayers to rescue their failing operations. The Blue Planet Foundation is distributing an online petition to classify Biki as public transportation so that it will qualify for city subsidies. Otherwise, the nonprofit organization running Biki will have to shut down.
A report by Collier’s International highlighted that shopping centers are experiencing a large amount of vacant retail space due to the COVID-19 pandemic restrictions placed on business and travel. Additional vacant space equal to the Royal Hawaiian Shopping Center was added to existing inventory in the first quarter as many businesses decided to close permanently. Colliers expects the trend to get worse through 2021 and take several years to recover, mirroring forecasts for Hawaii tourism.
Kapiolani Community College (KCC) celebrates its 75th anniversary this year and has opened Phase 1 of KCC’s Culinary Institute and is working on Phase 2 on the former site of the Cannon Club, the officer’s club of the United States Army. The Cannon Club opened in 1945 during World War II on the slopes of Diamond Head offering magnificent views of Waikiki and the Pacific Ocean. Both military and their civilian guests would dress in their finest dress uniforms, suits, and dresses to dine there. The original Cannon Club closed in 1997. The lounge of the future restaurant at KCC will be named the Cannon Club in honor of the prior establishment.
A poll by the website YouGov asked 1,211 adults to choose the better of two states in a series of head-to-head matchups. Hawaii came out on top 69% of the time claiming the #1 ranking ahead of second-place finisher Colorado. Each respondent was asked to consider seven matchups and no individual saw the same state twice. The people polled were not asked to provide reasons for their choices.
The University of Hawaii (UH) men’s volleyball player, Rado Parapunov, was named the Big West player of the year by the Big West for the second time in a row. The 6’ 9” senior led the team to a #1 ranking through the regular season. UH won the national championship in dominant fashion be sweeping conference rival University of California Santa Barbara 25-21, 25-18, 25-23 and national rival and #2 ranked Brigham Young University 25-21, 25-19, 25-16. To see pictures of Rado Parapunov, please click the link below.
Rado Parapunov
The UH women’s water polo team won the Big West tournament defeating the University of California Irvine 9-8 in the last minutes of the final. The 10-1 Wahine will participate in the NCAA tournament scheduled for May 14-16 in Los Angeles.
A golf instructor took over management of the Koolau Golf Club after the course manager exited its lease early due to the pandemic. He maintains nine of the holes and offers unlimited play when students sign up for 10 one-hour lessons or $1,500 or 50 one-hour lessons for $5,000. KMR School of Golf also offers golf yoga classes for $50 and golf workshops for $175. The owner of the course is partnering with a land management company to come up a long-term plan for the property.
Wet ‘n’ Wild Hawaii completed installing a 1.3-megawatt solar system that makes the park 100% solar powered. The 2,958 solar panels also provide covered parking in the water park’s parking lot.
Lokahi Brewing Company celebrated the opening of its brewery and taproom located at 1160 S. King Street on Saturday May 1st. The taproom opened with a selection of four Lokahi creations and two from other breweries. Plans include rotating three taps from other breweries in addition to Lokahi’s offerings and partnering with various food trucks over the next few months. The company does not yet appear to have a website.
Scientists removed another 47.2 tons of marine debris from the Papahanaumokuakea Marine National Monument during a 24-day expedition in March and April. In the process, they saved a female Hawaiian monk seal from a net that was wrapped tightly around her neck and disentangled three black-footed albatross chicks and a great frigate bird known as an iwa. The trash consisted of 40 tons of ghost nets (fishing gear) and ocean plastics including fishing buoys, baskets, plastic bottles, caps, cigarette lighters, foam, and other plastic fragments. The periodic cleanups have become an essential part of maintaining the environmentally protected area since 1996.
Waikiki Beach has a new celebrity for the next few weeks in the form of a baby Hawaiian monk seal that was born on April 26th. The National Oceanic and Atmospheric Administration (NOAA) responded to the birth and erected a fence around the monk seal pup and mother. Volunteers of the Hawaii Marine Animal Response were keeping watch over the seals and the public is urged to keep their distance both on land and in the ocean to ensure the mother remains with the pup and it gets the nutrition needed to develop. Mother monk seals can be very aggressive towards humans to protect their pups and people should use extreme caution when near any seal. The pup’s mother, Kaiwi, has given birth to three other pups previously on the Kaiwi coastline according to conservationists. To learn more about Kaiwi, please click the link below.
Kaiwi, The Monk Seal
Waimanalo Beach witnessed the circle of life on April 13th as the beach was closed due to twelve to thirteen foot-tiger sharks feeding on a humpback whale about 300 yards from shore. The carcass washed ashore overnight and was removed after a Hawaiian blessing was conducted the following day. Watch a video of this event by clicking the link below.
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