Guam faces looming housing crisis as prices rise
In 2020, the world changed as a global pandemic took over and pushed the global economy into a deep recession. Businesses closed down, unemployment rates went up, and many people were left without places to live as rent fell and the amount of housing went down. Many people took advantage of low rent prices at the end of 2020, but as some leases are starting to expire, these leases have increased by as much as 50%. In Guam, at the end of 2021, the all-time high for a single home was set: $375,000, a 12% increase from 2020. Now, the housing crisis is arising again and the lack of affordable housing is causing a major problem for Guam’s middle-class.
Housing has been a problem for the residents of Guam for years. For example, in 2017, a single-family home was $240,000 and only $200,000 in 2013. While these numbers are immeasurable when compared to the price of a house in 2021, these numbers still make it difficult for a middle-class family to afford their mortgages on mainly private-sector salaries. Those contributing most to the uptick in housing prices are the military personnel living on the island. Military personnel make up 7,000 of the 160,000 on the island and a third of Guam is military-owned, leaving little space for civilians.
But why is the military a cause for increases in rent? Military renters make up one of three major markets for landlords in Guam as they are granted Overseas Housing Allowance due to the fact that they live overseas. As the Overseas Housing Allowance covers exact rent amounts, military officers are incentivized to rent out high-valued housing. While these officers are taking advantage of their compensations, it causes inflation in the economy and elevates house prices.