New DHHL permit process approved

THE ISSUE
The revocable-permit program was loosely run and was criticized by beneficiaries, who saw mostly non-Hawaiian tenants getting significantly discounted rents for what were designed to be short-term deals but became long-term agreements.

WHAT’S NEXT
Statewide meetings will be held to get feedback from DHHL’s beneficiaries (those at least 50 percent Native Hawaiian), tenants and the public. Then final approval of the revised system will be sought. "We look forward to the input and dialogue we will gain from meeting with our beneficiaries in the coming months," said Jobie Masagatani, DHHL’s director and commission chairwoman.

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The Hawaiian Homes Commission on Tuesday approved sweeping changes to the basic framework for the Department of Hawaiian Home Lands’ controversial month-to-month land leasing program, authorizing reforms intended to make the process more transparent and more fair.

With no opposition, the commission gave the go-ahead for the staff to develop a permit system based on competitive bids rather than the first-come, first-serve one that had been used for decades and generated allegations of favoritism, mismanagement and inconsistent enforcement.

The department also will do away with annual automatic renewals for the so-called revocable permits, establish procedures for determining fair market rents, and allocate staff to conduct compliance reviews on an annual basis.

In addition, DHHL intends to review uses for the more than 38,000 acres in the program to determine whether some of the parcels should be placed in the pipeline for developing homestead lots or converted to general leases, which are 55- or 65-year agreements and generate much more income for the agency.

The commission’s action came after a 2013 Honolulu Star-Advertiser series that revealed numerous flaws with the program and led to the suspension of new permit awards and the formation of an advisory panel by then-Gov. Neil Abercrombie to recommend changes.

The commission Tuesday approved only the framework for a new program, largely adopting the recommendations of the governor’s committee.

The department now plans to hold statewide meetings to get feedback from DHHL’s beneficiaries (those at least 50 percent Native Hawaiian), tenants and the public before returning to the commission for final approval of the revised system.

"This new proposed program is a step in the right direction toward improving our short-term land disposition program," Jobie Masagatani, DHHL’s director and commission chairwoman, said in a written statement. "We look forward to the input and dialogue we will gain from meeting with our beneficiaries in the coming months."

The revocable-permit program was established years ago as a way to get tenants onto largely undeveloped DHHL land not ready for homestead development. It served two main purposes: generating revenue for the agency and transferring the responsibility and cost of maintaining the property to the renters.

Because the program was loosely run and mismanaged, however, it became a magnet for criticism by beneficiaries, who saw tenants — mostly non-Hawaiians — getting significantly discounted rents for what were designed to be short-term deals but in practice became long-term agreements. Some of the nearly 190 permits were issued more than 20 to 30 years ago.

The rules of the program also were loosely enforced. One former DHHL commissioner, for instance, built an unauthorized home on a large Kauai ranching parcel, and the agency did little to enforce compliance with the terms of the agreement until the Star-Advertiser exposed the arrangement. The homeowner subsequently had to disassemble the structure and move it elsewhere.

Michael Kahikina, one of the commission members, asked the staff to develop a way to help beneficiaries who have small revocable-permit lots behind their homestead residences.

Those Native Hawaiians are helping the department while realizing the main purpose of the Hawaiian Homes Commission Act, which is to get beneficiaries onto the agency’s trust lands, Kahikina said.

"Where is the policy that Native Hawaiians can apply for that land?" he asked. "That’s what we need to work for."

Masagatani told her fellow commissioners that the department should do a better job of informing permit holders of DHHL’s land plans so that the agency doesn’t get "pushback" when the permit property has to be returned.

Among other things, the department plans to develop administrative rules for the program, spelling out how it will be run. The existing one has no such rules.

Once the new program gets final approval from the commission, the department intends to implement it in phases, probably island by island, because DHHL lacks the staff to convert all 180-plus parcels at one time.