Paradise lost: Cost of living drives Hawaii's middle class to mainland

December 14, 1991|By Ellen Uzelac | Ellen Uzelac,Sun Staff Correspondent

HONOLULU -- A year ago, fed up with the high cost of living in Hawaii, investment adviser Robert W. Chamberlain picked up his "Places Rated Almanac" and shopped for a cheaper place to live.

He and his wife settled on Sewickley, Pa., a swank community near Pittsburgh where the Chamberlains now happily reside in double the house at half the price and on half the salary.

"It wasn't so much that we decided to move to Pennsylvania but decided that Hawaii didn't have what we wanted any longer," said the 40-year-old Mr. Chamberlain, one of a growing number of Hawaiians buying one-way tickets to the mainland.

The high cost of living and doing business in Hawaii has residents here worried that their Pacific outpost will become less of a home and more of a vacation destination as prices continue to drive away the middle class.

"Sad to say, I think the likely future for Hawaii is to become a Disneyland in the middle of the Pacific, a tourist destination where it's impossible for anyone but the very wealthy to live," said University of Hawaii professor Jim Dator, director of the Hawaii Research Center for Future Studies. "We're already moving toward a two-tiered society: a small number of the very rich and large numbers of poor."

At what price paradise?

Try $1.45 for a gallon of regular unleaded gas, $6 for a box of cereal, $4.50 for a gallon of milk and $11 for a 2-pound block of Velveeta. Try $980 a month for an 800-square-foot, one-bedroom apartment and a quarter-million dollars for a run-of-the-mill house.

"We've been banging the drums about this for the last year and a half," noted Sam Slom, president of Small Business Hawaii, which represents 3,100 business owners in the state. "What we are observing is the wholesale exodus of the middle class and entrepreneurial people from this state."

Hawaii has been a fairly expensive place to live for years, but paradise has rarely come at such a premium: Since 1987, spurred by foreign investment and land speculation, housing prices have doubled. Last year, the median-priced single-family house on the island of Oahu -- where the vast majority of the state's 1.1 million residents lives -- cost $352,000.

In the past couple of years, movers have reported a surge in traffic to the mainland -- particularly to the Pacific Northwest and Las Vegas, a resort town long popular with Hawaiians.

Too, there has been an explosion in "ohana" units, housing additions occupied by extended family, most often adult children who cannot afford to live on their own. In some neighborhoods, practically every other house has a second story going up.

In the next few weeks, 30-year-old Kevin Takaesu and his bride will move into the nearly finished second story above his parents' house in the hills overlooking Pearl City. Together, Mr. Takaesu, a sales supervisor for a bakery, and his secretary wife earn an annual salary of $61,000, far short of the income they would require to qualify for a mortgage.

So, Mr. Takaesu and his parents got a home improvement loan to build the ohana (which in Hawaiian means "family") unit. His monthly payment on that loan is under $700, which makes it more affordable than the average rental apartment.

"It's not what I would want. I would prefer to own my own home," Mr. Takaesu said. "But this is the next best thing. Maybe one day I'll own my home, maybe not in Hawaii."

Although Hawaii continues to gain population, it has done so at a less rapid rate over the past decade, and state statistician Robert Schmitt has observed a steady drain of workers in the past five years as well as fewer mainlanders looking for jobs. "I suspect many would say the cost of living is too high here," Mr. Schmitt said.

Indeed, there are more residents who hold multiple jobs than in any other state, and nearly half the civilian jobs are in tourism, historically a low-paying industry, he added.

Meanwhile, the so-called "paradise tax" -- the differential between the cost of living in Hawaii and the mainland average -- has risen to 34 percent, according to the Tax Foundation of Hawaii.

So expensive has Hawaii become that even Mr. Slom, who has lived here 32 years, plans to make a house-hunting trip to the East Coast later this month.

"We do not own a home here, and both my wife and I work," said Mr. Slom, 49. "We're tried seriously to get a home, and we can't afford it. Could we buy a house? Absolutely. Could we buy a house we like? Absolutely not."

"What Hawaii was is not what Hawaii is today," he added. "We'r going down a fork in the road right now. We can find order and identity for ourselves, or we can put everything up for sale."

At the University of Hawaii, Mr. Dator said he believes that onl an economic depression or an environmental catastrophe will forestall Hawaii's transformation into a mega-resort, a place where only the rich and poor reside.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.