Addressing the “Brain Drain”: How Affordable Housing Keeps Hawaii’s Youth at Home

It is a bittersweet tradition in Hawaii. Every May, we cover our graduates in leis, celebrate their achievements, and then quietly worry about their one-way tickets to the mainland.

This is the “Brain Drain.” According to the shocking 2025 Holomua Collective Survey, the situation has intensified.

• 57% of residents now say they plan to leave the islands within the next five years (up from 46% the previous year).
• The “Relief Threshold”: The salary at which families finally feel “safe” from leaving has jumped to $150,000.
• The Middle Class Squeeze: A staggering 75% of middle-income households indicated they may be forced to relocate due to housing costs.

But in 2026, the state is fighting back with new tools. From the Hale Kamaʻāina mortgage to the proposed Youth Housing Stability grants, there are finally concrete programs to help young professionals stay. At HAPI, we believe that stabilizing housing is the only way to save our local workforce.

Here is your guide to the 2026 programs designed to keep our keiki home.

The “Hale Kamaʻāina” Mortgage (2026 Update)

Buying your first home at a 1990s interest rate.

If you thought buying a home was impossible with interest rates hovering near 7%, you need to look at the Hale Kamaʻāina Mortgage Program. Relaunched by HHFDC specifically to combat the 2026 rate environment, this program is a lifeline for first-time buyers.

The Game-Changing Details:

• Below-Market Rates: Eligible borrowers can currently lock in rates as low as 5.4% to 5.65%. On a $500,000 condo, this saves you over $400/month compared to a commercial bank loan.
• Down Payment Assistance (DPA): The program offers a second mortgage of up to 4% of the purchase price to help cover your down payment and closing costs.
• Targeted Areas: If you buy in specific “Targeted Areas” (like parts of Kapahulu or Kalihi), the income and purchase price limits are significantly higher (up to ~$989,000), and you may not even need to be a first-time buyer.
• The Catch: You must be a Hawaii resident and complete a HUD-approved homebuyer education course.

For Renters: The “Workforce” Bridge

Not ready to buy? You still have options.

Most recent college grads aren’t ready to buy a condo yet. They need a rental that doesn’t eat 60% of their paycheck. This is where Workforce Housing (typically 80-100% AMI) steps in. Unlike “low-income” housing, these units are built for professionals who earn a solid salary but are still priced out of the open market.

The Math of Staying: Let’s look at a real-world scenario for 2026 using the average salary of a Registered Nurse in Honolulu (approx. $91,200/year).

• Scenario A: The Market Trap
  • Rent: A decent, renovated 1-bedroom in town (Kaka‘ako/Moiliili) currently averages $2,600/month.
  • The Burden: This consumes roughly 37-40% of the nurse’s gross income. After taxes, student loans, and $8/gallon milk, there is almost nothing left to save. This is “Rent Burdened.”
• Scenario B: The Workforce Solution
  • Rent: An income-restricted “Workforce” unit in the same neighborhood is capped based on AMI formulas, often renting for roughly $1,900/month.
  • The Balance: This lowers the housing cost to ~25% of gross income—the “Affordable” sweet spot.
  • The Savings: That $700/month difference ($8,400/year) is transformative. It covers the student loan payment, builds an emergency fund, or becomes the future down payment for a Hale Kamaʻāina mortgage. It is the financial breathing room that prevents a move to Las Vegas.

The Remote Work Reality

Competing with the “Digital Nomads”.

We often hear young people say, “I can’t compete with a remote worker making $150k.” In the private luxury market, that may be true. But in the Workforce Housing market, their high income actually works against them.

The Local Advantage: Many HAPI managed properties and HHFDC projects have strict residency and income cap requirements.

1. The “Domicile” Test: You must prove you are a “domiciled” Hawaii resident. This means you aren’t just visiting; your life is centered here. Landlords for these units will ask for your Hawaii State Tax Return (N-11) and Hawaii Voter Registration card. A remote worker staying in Airbnbs cannot provide these.
2. The Income Ceiling: Remember, workforce housing has a maximum income limit (usually 120-140% AMI). That remote worker earning $200,000? They make too much to qualify for these protected units. This creates a “protected lane” specifically for local teachers, nurses, and first responders where you don’t have to compete with mainland wealth.