October 2017 E-Mail Update

Here is our 10/10/2017 e-mail update. It is sent after the statistics for the preceding month have been posted on the Board of Realtors website. You can find previous newsletters by visiting www.stott.com/news.

Oahu’s median price for single-family homes was $760,000 in September (1.3% higher than September 2016) and for condos matched a record of $425,000 (10.9% higher than September 2016). The number of sales continued to grow in comparison to last year as fence sitting buyers have finally moved forward while supply fails to keep up. Stott Property Management had roughly ten tenants give notice over the past two months because they purchased a home. There are currently only 2.4 months of remaining inventory of single-family homes and only 2.6 months of remaining inventory of condos. Bidding for available homes has been intense. One Kailua foreclosure received 29 offers during the 10-day bidding period.

A state board has approved the building permit for the $1.4 billion Thirty Meter Telescope (TMT) on a 5-2 vote after months of testimony in a contested hearing ordered by the Hawaii Supreme Court. The board approval included 43 conditions that TMT International Observatory must meet to build the telescope on the summit of Mauna Kea. TMT officials are hesitant to say when the project will begin since opponents vow to appeal the decision to Hawaii’s Supreme Court and a separate challenge is being mounted to the project’s sublease.

The board of the Hawaii Public Housing Authority (HPHA) appears not to have received the memo from the governor and mayor regarding the affordable housing problem on Oahu. The board unanimously voted to terminate the six-year old master development agreement to redevelop a low-income housing project in Kalihi with a private developer despite the fact that the developer finished the first phase of the project on time and on budget. The board claims that they had reached an impasse with the developer while the developer claims that the agreement was already negotiated six years ago when the state signed the contract. The developer claims that the HPHA wanted the change the terms of the agreement when Governor David Ige’s administration took over. Currently 176 obsolete units remain in limbo as the board seeks bids from new developers. The executive director of the HPHA would not disclose the details causing the impasse leading to the board’s decision.

Another state agency, the Hawaii Housing Finance and Development Corp. (HHFDC), is taking heat for offering six low-cost rental projects to developers under long-term ground leases. Governor, David Ige, has come to a logical conclusion that the private sector would do a better job managing and renting out the projects to tenants meeting the federal government’s affordable housing criteria. The state managed buildings are over twenty years old and suffering from deferred maintenance.

The state agency charged with providing homesteads for Native Hawaiians, the Department of Hawaiian Home Lands (DHHL) produced no new housing units during the fiscal year ending June 30 and closed out the fiscal year with $30 million in unspent federal housing funds. The number of eligible beneficiaries awaiting residential leases has grown to 22,000 individuals throughout the state and roughly half of the wait-listed applicants reside on Oahu. While half of the beneficiaries live on Oahu, only 4% of the allocated land is located there. Critics of the department decry the loss of $30 million in federal funds because DHHL failed to use the funds to build affordable housing.

The U.S. Department of Housing and Urban Development told the Caldwell administration that it was pulling $2.4 million in federal funding because the city failed to spend it and that the city is at risk of losing another $7.5 million. The money can be used for buying and renovating existing structures for housing, however it may not be used for building new affordable housing. An earlier audit had warned that the city’s current housing policies needed to be changed to more effectively manage the federal block grants.

While the city and state struggle with developing affordable housing, the lawlessness associated with Kakaako’s chronically homeless population has caused the closure of Kakaako Waterfront Park. The homeless encampment has grown to about 180 people and is the largest encampment since the 300-person encampment was dismantled in 2015 following the attack of a state representative. The park is being shut down indefinitely due to safety issues from homeless people vandalizing plumbing and electrical structures to steal water and electricity. Several dog attacks have also been attributed to the homeless. Repairing damage to the parks is estimated to cost taxpayers about $500,000. A scathing editorial in the Honolulu Star Advertiser called out both mayor Kirk Caldwell and governor David Ige for claiming success in dealing with the homeless situation while visual problems are still occurring on their doorsteps.

A statewide shortage of intensive care unit (ICU) beds and surgical beds has led to lengthy emergency room (ER) wait times. Hawaii is ranked dead last in the number of ICU beds and surgical beds per capita and close to the bottom in the number of hospital beds per capita. Emergency departments have to divert ambulances more often because they are full. Compounding the problem is a lack of long-term care and rehabilitation facilities available to take care of patients when they are ready for discharge. Queen’s chief of emergency medicine has noted that Hawaii is struggling with capacity and that the trend is “scary.” Queens Medical Center in Honolulu and West Oahu see 21% of Hawaii’s 500,000 ER patients annually. Hawaii’s ER numbers continue to climb as uninsured and homeless patients use the ER for non-emergency services. While hospital administrators recognize the long waits are a problem, they are struggling to add sufficient capacity.

A growing doctor shortage in Hawaii is getting worse according to an assessment by the University of Hawaii. The UH professor that conducts the annual study stated that the state needs 769 more doctors in a variety of specialties to meet the needs of a growing and aging population. The shortage is most acute a bigger problem on the outer islands because there is not enough people to support some specialties. Any patient suffering from head or spinal trauma on the Big Island must be immediately medevaced to Oahu. The state’s high cost of living coupled with lower pay have been identified as the main culprits in discouraging new talent from moving here while increasingly onerous regulations convince more doctors currently practicing in Hawaii to throw in the towel.

The medical marijuana industry is starting to see some progress as the state starts putting needed policies, agreements, and certifications in place. The state reached a deal with a Colorado-based credit union to provide banking services to the eight licensed dispensaries and customers will be able to make payments using an app on their smart phones.

The Honolulu Authority for Rapid Transportation’s (HART) rail project claimed another political victim when the House majority leader’s offer to resign was accepted by the House speaker.   House Majority Leader Cindy Evans offered to resign when she voted against the latest bailout proposal because state legislators raised the Transient Accomodations Tax (TAT) statewide to help pay the bill. Outer island lawmakers strongly objected to taxing economic activity outside of Oahu to bail out Honolulu’s rail project.

Hawaii Gas has received approval to capture and process biogas from a West Oahu wastewater treatment facility. The company says that the wastewater treatment plant currently produces natural gas equivalent to 15,000 barrels of oil that is not currently used and released to the atmosphere. The project is estimated to generate $1.6 million in revenue for the City and County of Honolulu. Hawaii Gas is also looking at other wastewater treatment facilities in Hawaii for additional opportunities.

Recent numbers published by Airbnb appears to show that the City and County of Honolulu is a losing battle with the burgeoning vacation rental industry. More than 217,700 visitors stayed in Airbnb units between Memorial Day and Labor Day with more than 100,000 of those visitors staying on Oahu. The City and County of Honolulu hired additional investigators as recently as last year to try and enforce regulations requiring leases of at least one month in length in residentially zoned neighborhoods. Despite the risks, the underground industry appears to be flourishing. Hawaiian Airbnb hosts earned about $60 million between Memorial Day and Labor Day.

A state Supreme Court ruling that the issuance of permits must comply with the Hawaii Environmental Policy Act which requires an environmental study has prompted the state Department of Natural Resources to stop issuing and renewing permits for recreational aquarium fish collection. A ban on collecting fish along the Big Island’s West Coast has been credited with aquarium fish stocks rebounding in that area. Hawaii is the world’s third-largest source of aquarium fish behind Indonesia and the Phillipines.

Another six-member crew wrapped up its eight-month mission in a small dome 8,000 feet up on Mauna Loa’s rocky terrain. Researchers continue to gather data from the fifth project that will help select the best team members for an actual mission to Mars. Two of the crewmembers had family in the path of Hurricanes Harvey and Irma. Since there is a simulated 40-minute lag in communications, mission support provided regular Hurricane updates so that the crewmembers would not have to ask and wait. The National Aeronautics and Space Administration (NASA) has invested more then $2 million on the Mauna Loa missions. The next eight month simulation is scheduled for January, 2018.

The Honolulu Board of Water Supply has hired off-duty police officers to keep hikers from trespassing onto one of Oahu’s most popular off-limit trails, the Haiku Stairs in Kaneohe, also known as the Stairway to Heaven. Off-duty police have turned away 900 hikers since mid-August. Tresspasser’s could face penalties including citations, arrest, fines up to $1,000, community service, and jail time. The Board of Water Supply has increased security while it completes an environmental impact statement in determining the future for the stairs. The U.S. Navy installed the original set of wooden stairs in the 1940’s to access radio antennas at the top of the Koolau’s. The Coast Guard took over the stairs in the 1970’s but closed its navigation station in the 1990’s.   The City and County of Honolulu rebuilt the stairs in 2005 as neighbors complained about the tresspassers. The stairs have never been open to recreational hikers. The Honolulu Fire Department made 20 helicopter rescues in the area last year.

A front-page article in the Honolulu Star Advertiser pointed out that snorkeling is the most deadly ocean activity in the state. 169 of the 650 drowning deaths from 2007 through 2016 were attributed to snorkeling, with 156 of those deaths were out-of-state visitors. Hanauma Bay, which hosts about 1 million visitors per year, has the highest number of drowning deaths on Oahu. Lifeguards point to the fact that a facemask, snorkel, and fins give novice swimmers a false sense of security. These swimmers find themselves in trouble when they start following fish, unknowing drift into deeper water, and then panic when the find out that they can no longer touch the bottom. Many novice swimmers get caught in ocean currents and are not strong enough swimmers to get back into shore. Ocean safety experts and trying to educate visitors on the dangers and provide valuable safety advice like always swimming with a buddy.

An effort to eradicate predatory rats on Lehua Island, a small island north of Niihau, is causing some controversy. A team from the Department of Land and Natural Resources (DNLR) collected 45 dead mullets and two dead juvenile boobies from a tide pool after photos on social media showed dead fish and birds. Some Kauai residents including a state representative are concerned that the use of Diphacinone, a poison, is harming other wild life. The director of DNLR contends that eliminating the invasive rats that have been killing nesting birds, chicks, and eggs over the past 75 years is worth the short-term risks of some collateral damage. Similar applications have been successfully conducted more than 500 times worldwide.

The National Oceanic and Atmospheric Association (NOAA) is hoping to enlist the public in its latest efforts to learn where breeding green sea turtles hang out and forage in the main Hawaiian Islands. NOAA biologists have visited the French Frigate Shoals every year since 1973 to monitor turtle nesting activity. The NOAA field researchers have been using a small dremel tool to gently etch a number in the turtle’s shell and use non-toxic white spray paint to highlight the number. The program started receiving phone calls from people who spotted the numbers and the scientists realized they had stumbled on a low-tech way to track different turtles’ locations. Green sea turtles were rare in the main islands four decades ago. State and federal protections have helped stage a comeback and it is common to see the turtles swimming throughout Hawaii. If you see a numbered turtle, call 888-265-9840, NOAA’s new marine animal reporting hotline. NOAA researchers ask that you stay at least 10 feet away from a turtle to avoid bothering or harassing the animal. The paint is expected to wear off in a few months and the etched numbers will eventually disappear as well.

Scientists on a 24-day expedition of the Papahanaumokuakea (say that five-times fast) Marine National Monument shared some good news recently. The expedition found that most of the coral reefs in the Northwestern Hawaiian Islands were thriving, but documented a shift from a coral-dominated reef to an algae-dominated reef in an area that coral bleaching was discovered three years ago. The monument’s ecosystem houses more than 7,000 marine species, of which one-quarter are unique to the Hawaiian archipelago.

A new study calls for more aggressive and effective management of fishing along Hawaii’s more populous coasts. Coastal reefs in waters off Oahu and Maui have lost 75% of the “food fish” populations compared to reefs in the northwester island chains. Researchers call for establishing areas that are off-limits to fishing and encouraging community-managed fisheries to help fish populations recover. With 1.3 million people, the state’s current approach to recreational fishing is no longer sustainable.