Median Sales Price of a single-family home has doubled since 2001, outpacing growth in Household Income.
In an environment where the cost of housing far exceeds individual income, people pool their resources to illegally convert portions of their home to rent to family or tenants for added income. Household sizes increase. We see this continually in our architectural drafting service business and in descriptions for MLS listings: "separate entry", "ideal for multi-family living", "3/2 up, 1/1 dnstairs"... all code words for ILLEGAL RENTAL.
THE MARKET has spoken -- people are willing to take the risk of living/renting/operating an illegal rental to make ends meet. It is my observation that illegal conversions do sell for more because the market perceives it as being more valuable.
By not using its Zoning Powers, the City is losing revenue. The Ohana Dwelling Unit provisions are too restrictive and thus has not gained widespread adoption among the eligible properties. Ohana Units require:
- $5,500 sewer connection fee,
- 2 additional parking stalls,
- a Restrictive Covenant stating the unit can only be rented to people related by blood, marriage, adoption, and
- the extensive amount of retrofit work required to provide the required 1-hour fire wall separation (a wall/floor assembly that must comply w/ ASTM E-119). It is difficult to upgrade the older single-wall homes in Hawaii to comply with a building code written on the mainland.
Comparatively, an Illegal Rec Room Rental Unit does not require any retrofits or fees.
Consequently, more and more homeowners are opting for noncompliance and the government is losing revenue from permit fees, monthly sewer base charges (billed by BWS), GET from rental income, etc.
Accessory Dwelling Units (ADU's) are one way to address the needs of Homeowners, Renters, the Government and the Community.
Information deemed reliable but not guaranteed.
SOURCE: Honolulu Board of Realtors
