How does the housing supply in Hawaii compare to the mainland United States?

The housing supply in Hawaii is more inelastic compared to the mainland United States due to several factors that uniquely characterize the state’s geographic and economic environment. Inelastic supply means that the quantity of housing does not change significantly in response to price changes. Hawaii has a limited amount of land available for development because it is an archipelago, which constrains the ability to increase housing supply.

Additionally, strict zoning regulations and environmental laws further limit new housing construction, making it difficult to respond to increased demand effectively. The high costs associated with land acquisition and construction in Hawaii also contribute to this inelasticity. These factors work together to create a situation where even when demand rises, housing supply cannot readily adjust, leading to higher prices and limited availability of homes.

In contrast, the mainland US generally has more land available for housing construction and a variety of regulatory environments, which can lead to a more elastic housing supply.