Overseas buyers drove Kauai home prices soaring in 2021

LIHUE >> An influx of out-of-state homebuyers and renters drove house prices up in Kauai in 2021, officials said.

“Anecdotally, (they) appear to have increased house prices and rents significantly, exacerbating an already critical housing shortage,” Adam Roversi, director of the county housing agency, told The Garden Island newspaper.

The average sales price of a single family home in Kauai rose 57% in November from the same month in 2020 to $ 1.2 million, according to real estate company Locations. Nationwide, the median rose by 16%.

Kauai County Council member Luke Evslin agreed that the influx of wealthy people looking to work from a new home stands out as a key development in the housing crisis.

“When you work for Google, you can in most cases afford to outbid anyone who works on Kauai,” said Evslin.

Higher house prices and rents have exacerbated labor shortages on the island, said Nalani Brun, director of the county’s economic development agency.

She said many hospitality workers come from outside the island, often recent high school graduates or college graduates, in search of sunshine and adventure. They often share houses and pool resources to pay rent. However, fewer of these dwellings are available and those that remain have become unaffordable for low-income workers.

To address the housing shortage, Evslin and Councilor Bernard Carvalho have tabled a bill to prevent developers from creating housing rules that prevent homeowners from renting out private spaces.

Evslin also has its sights set on vacant homes and short-term vacation rentals, arguing that affluent people from outside of Kauai have “parked” money in local homes to take advantage of low property taxes.

He estimated that 1 in 8 Kauai homes are vacant because they were bought as an investment or second home.

“We have to prevent that through property taxes,” he said. “If you want to leave a house empty, you have to pay a lot more for it so we can build a house for someone else.”

The county has already changed the building requirements and created a cesspool conversion program to encourage residential development.

Almost half of the island’s 40,000 households have cesspools, according to Evslin. Reliance on cesspools prevents Kauai homeowners from building additional affordable rental units on their lots.