Report highlights construction boom; lack of new housing
A new state report bodes well for Hawaii's rebounding construction industry, but places an asterisk on the need for new housing.
According to the Department of Business, Economic Development and Tourism, Hawaii's building boom added 2,500 jobs last year, the most by any industry. The strong growth in construction is predicted to continue this year at 12.4 percent and 8.3 percent in 2013.
State economist Eugene Tian says before the start of the recession in late 2007, there were about 40,000 construction workers statewide. But by the end of 2012, that number had fallen to 30,000.
"For several years our construction has been down, while the population growth has been strong, so there is a lot of demand," said Tian. "It is time for construction to come back."
The Hawaii Carpenters Union represents about 6,200 members and according to Financial Secretary Ron Taketa, about 50 percent of those members were unemployed in 2008.
"We still have people on the bench, but we're more optimistic than in past years," Taketa said about the resurgence in construction.
However, with the state experiencing population growth of 1 percent per year, the DBEDT report also points out the need for new housing.
"Hawaii's current housing need is about 5,500 new units per year," the report states. "However, during the last 5 years, the average authorized units was only 3,400 per year."
Pacific Resource Partnership, which represents 220 contractors, has taken to the airwaves to highlight the need for new homes. A 60-second ad that began airing last week discusses the need for "integrated communities" where residents can take advantage of more affordable housing options and the benefit of living within walking distance of jobs, shops and other amenities. PRP estimates Oahu alone will need 104,500 new homes by 2050.
"The big thing that you're seeing as a result of less housing being built is the rise in housing prices that's beginning to become more and more out of reach for many families here," said John White, PRP's executive director. "We simply have to build the homes for all spectrums of people who live in Hawaii."
But the current building boom, especially in Kakaako, is also creating a backlash. A handful of bills making their way through the state Legislature seek to slow down the project approval process by the Hawaii Community Development Authority.
"I think it's concerns about sewer capacity, school availability, traffic concerns (and) open space concerns," said Rep. Della Au Belatti, who has heard from constituents worried about over-development. "You know, all the typical concerns that residents have about the living conditions of a community."
Hawaii's construction industry could surpass the $8 billion mark this year and the economic return on ancillary spending provides an added boost.
"According to our estimates, for each dollar of construction spending there will be an addition $1.08 spent elsewhere in the economy," said Tian.
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