Category Archives: Housing

Speaking of oceanfront properties…

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We were able to spend Saturday night with friends in Kaaawa, and got up early Sunday morning for our walk at dawn. This was the view at Swanzy Beach Park, where a few hardy campers braved the blustery weather.

November 27

Despite the concerns about the effect of climate change on sea levels, we noticed that a home on a narrow lot between the highway and the ocean sold earlier this year for a reported $998,000. It’s located along a beach that has experienced substantial erosion for years, and seems a prime candidate to fall victim to rising sea levels, but that apparently didn’t deter buyers.

I suppose it would be interesting to look at sales data for oceanfront properties. I’ll have to give some thought to what to look for in these data.

Any suggestions?

Or maybe someone’s already done this?

Watching the rising waters

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A New York Times story published this week reports that the economic impact of climate change and rising sea levels on coastal real estate “could surpass that of the bursting dot-com and real estate bubbles of 2000 and 2008.”

It’s an important story with plenty of implications for Hawaii, but likely got lost in the Thanksgiving and Black Friday news and advertising.

See: Ian Urbina, “Perils of Climate Change Could Swamp Coastal Real Estate.”

“The fallout would be felt by property owners, developers, real estate lenders and the financial institutions that bundle and resell mortgages,” according to the story.

The article cites “nuisance flooding,” or flooding caused by tides rather than by weather, as sort of a leading indicator. Honolulu already has its share. The high tide floods in the Mapunapuna industrial area is just the most recognized. But some older high rise buildings in low lying areas of Honolulu, including in and around Waikiki, are already facing problems created by a rising water table. I know of several condominiums on the edge of Waikiki where water is entering elevator shafts, requiring expensive efforts to seal or block the waters. Given the number of older buildings, I would be surprised if this isn’t a major issue that just hasn’t grabbed the public’s attention yet.

There are many unknowns, including the pace of sea level rise over coming decades and the reaction of real estate markets.

The NYT story cites a recent post by Freddie Mac, the mortgage giant, concerning the impact on the mortgage market.

One challenge for housing economists is predicting the time path of house prices in areas likely to be impacted by climate change. Consider an expensive beachfront house that is highly likely to be submerged eventually, although “eventually” is difficult to pin down and may be a long way off. Will the value of the house decline gradually as the expected life of the house becomes shorter? Or, alternatively, will the value of the house—and all the houses around it—plunge the first time a lender refuses to make a mortgage on a nearby house or an insurer refuses to issue a homeowner’s policy? Or will the trigger be one or two homeowners who decide to sell defensively?

I’m now living a quarter-mile from the beach, and I’m old enough that the long view isn’t as much of a personal concern. But for younger folks, this all deserves to be a much higher priority.

Just one more thing about A&B’s Kahala Ave condos

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My column this week at Civil Beat takes another look at a proposed six-home development along Kahala Avenue, on the other end of Kahala (“Ian Lind: No, These Condos Don’t Mean The End Of Old Kahala“).

The subtitle: The old Kahala is already gone.

Some Kahala residents have opposed the proposal because, they say, it would lead to increased density in the area, drive up prices, and only benefit wealthy absentee owners.

Civil Beat columnist (and veteran reporter) Denby Fawcett highlighted the proposed development in a recent column.

Denby and I both grew up in that old Kahala, the somewhat lazy beachside community before it was discovered by the ultra rich.

From my column, which appeared today:

We share a dismay at the direction the neighborhood has taken a nostalgia for the Hawaii that we glimpsed as children and young adults.

But I doubt very much that A&B’s six luxury homes are going to have any negative impact in Kahala.

The sad fact is that the elegant, low key, beachside neighborhood we grew up in is long gone.

But I did notice one small tidbit with lots of implications.

I was trying to figure out why the property was variously reported as something just over 53,000 square feet or over 58,000 feet.

I found the answer buried in a section of the the Planning Department’s report and recommendation on the project, sent to the City Council last week. The section is titled “Shoreline and Sea Level Rise”.

“The regulatory shoreline along the rear of the site is approximately 150 feet long and follows the top of the bank….”

“The makai property line,” the report states blandly, “is in the ocean.”

Yes, you read that right. The original property line is now out in the water.

Again, according to the report: “The eroded lands seaward of the certified shoreline account for approximately eight percent, or 4,675 square feet of the property.”

They’ve lost 8 percent of the land area already, and sea level rise is just getting started.

It may be that Mother Nature could rein in speculative oceanfront development sooner that any public policy changes.

Creating alternatives: A Tiny House

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A friend from our days in Kaaawa has just launched herself on a new adventure, which she has been sharing with friends on Facebook.

She bought herself a beautiful, 340 square foot “tiny house” with kitchen, gas range, bath, shower, stairs to a sleeping loft, a second loft accessible via a ladder, etc.

She saw it advertised online on the west coast (there are a bunch of photos of the interior in that advertisement). The asking price was $65,800, but I don’t know what she finally paid.

It was shipped to Hawaii, and she had it picked up at the dock last week and delivered to a lot in the back of Punaluu. She’s building a deck, connecting to water, but powering the house with solar panels.

Here’s her house as it left the dock, and set in place in Punaluu.

340 sq. ft.

Punaluu

I’m looking forward to hearing more and to seeing it once it’s all fixed up.

It certainly beats a 340 foot studio apartment somewhere in town, and at a better price.