By Frank Whitman
Without regulatory reform, Guam faces a continued shortage of affordable family housing and an inability to adequately house the rapidly growing construction workforce.
That was the message to members of the Guam Legislature and other policymakers during a virtual town hall meeting hosted by the Guam Association of Realtors Legislative Committee on Jan. 27.
Siska S. Hutapea, president of Cornerstone Valuation Guam Inc., began her presentation with an overview of Guam’s current economy, the two legs of which are performing very differently.
The U.S. military has said it will spend $1 billion to $2 billion a year on construction in Guam for the next 10 years, a significant increase over previous construction activity.
Tourism officials, however, are predicting Guam will see 670,000 arrivals in fiscal 2023, which is 41 percent of the 1.63 million visitors in fiscal 2019. Though still well below historical levels, the figure is encouraging considering the near industry shutdown during the pandemic. The Guam economy remains tenuous.
“If tourism is not returning at the pace of 670,000 we’re going to be in trouble,” Hutapea said. “If there’s something in the defense (federal budget) bill that changes, we’re going to be in trouble.”
Realtors also discussed a looming shortage of housing for H-2B workers.
There are currently more than 3,000 H-2B workers in Guam and officials have said 7,000 to 8,000 workers are expected.
By Guam law, worker housing is to be in areas zoned M-1 – light industrial, very little of which has facilities to house workers and is still vacant.
“There’s very limited availability of property for these H-2 workers,” Hutapea said. “This needs to be resolved and fast - as of yesterday - because they are coming.”
Sen. Roy Quinata asked if more land designated M-1 is needed.
“No, we need more worker housing,” Hutapea replied. There is plenty of M-1 land, but the need is for worker housing which is only permitted on M-1 land.
Quinata also asked about housing workers in underutilized hotels.
“You hit the solution on the head because the fastest way to create this housing is to use existing properties and there are existing properties that are going to be available for that,” she said. “We just need to resolve the policy issue.”
Housing workers in existing structures is preferable because once the construction boom is over, property owners will want to put the properties to other uses, she said.
Realtors also addressed a recently announced requirement that military personnel assigned to Guam reside in base housing, if occupancy of that housing is less than 90 percent.
“I do not think there’s enough housing inside the base to cover all of the military personnel on Guam,” Hutapea said. “If anything, they really do need the private sector to step up and provide more housing.”
In addition, the new Marine base will employ civilians, and businesses will grow in the area to provide dining, entertainment and other services for military and civilian personnel who will, in turn, need housing.
In addition to inflation, rising interest rates and other factors out of local control, Guam’s housing shortage is exacerbated by government policy that discourages the development of multifamily housing, said John Duenas, vice chair of the GAR Legislative Committee.
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“The Bureau of Planning has recommended disapproval of a lot of projects that are being sent through the planning commission process because they believe that certain areas on Guam should just stay rural,” he said. “One of the solutions to this housing shortage is zoning reform to be able to build multifamily housing.”
Hutapea agreed. Building more units on a smaller lot creates economies of scale, Hutapea said. She cautioned that rezoning should be done with care to minimize negative effects on adjacent properties and with consideration of whether infrastructure is adequate.
Realtors reported that the building permit process is too time-consuming. The delay impacts the affordability and availability of properties, Hutapea said.
“If the availability is not there, meaning the housing, the multifamily apartment is not built fast enough, what’s going to happen is there’s a limited supply and with demand increasing, it will push the price,” she said. “So the 11-14 percent double-digit annual growth on single-family (homes) is partly caused by this and it’s not sustainable.”
Duenas also noted delays caused by the requirement for archaeological investigation on private property as a condition of permit approval. He said permit applications submitted for residential development and other development on private property have been negatively affected by Department of Parks and Recreation “insistence” that they do the investigations on their property.
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