The state agency charged with providing homesteads for Native Hawaiians produced no new housing units during the year that ended June 30, and closed out the fiscal year with $30 million in unspent federal housing funds.

Meanwhile, the number of eligible beneficiaries awaiting residential leases totals more than 22,000 individuals statewide, with roughly half of the wait-list applicants on Oahu.

Nearly a century ago, Congress established the Hawaiian Homes Commission Act, setting aside 200,000 acres in a land trust to benefit Native Hawaiians with at least 50 percent Hawaiian ancestry through long-term leases of $1 a year for land to live, farm or ranch on.

The 1920 federal law states that among its main purposes is “to enable native Hawaiians to return to their lands in order to fully support self-sufficiency for native Hawaiians and the self-determination of native Hawaiians.” It adds that Native Hawaiians should be placed on trust lands “in a prompt and efficient manner.”

One critic called the Department of Hawaiian Home Lands’ slow pace of producing housing for Native Hawaiians “criminal” at a time when the overall availability of affordable housing is lacking. The department, which administers the land trust, contends it is not a housing agency.

“Over the decades we’ve normalized poor accountability and failure,” homesteader Robin Puanani Danner said of DHHL’s performance. “There has to be more force by which the people of Hawaii start to expect and demand accountability and demand answers.”

Danner serves as chairwoman of the Sovereign Councils of the Hawaiian Homelands Assembly, a statewide coalition of homestead associations that advocates on behalf of beneficiaries. She’s particularly critical of the department’s inability to spend down millions in federal funding earmarked for affordable housing for Native Hawaiians.

Under the federal Native Hawaiian Housing Block Grant program, DHHL had been receiving on average $10 million a year since 2002 to support affordable housing activities to benefit low-income Native Hawaiians eligible to reside on Hawaiian homelands. The late U.S. Sen. Daniel Inouye is credited with helping establish the funding stream.

Eligible activities under the program include development of affordable housing for rental or home ownership, infrastructure and support services for Native Hawaiians earning less than 80 percent of the area median income. The program is part of the Native American Housing Assistance and Self Determination Act of 1996, also known as NAHASDA.

As unspent grant money began to pile up several years ago, hitting a backlog of $55 million at one point, the Obama administration in 2015 began scaling back Hawaii’s NAHASDA appropriation, and in 2016 zeroed out funds for the program over concerns about the unspent balance.

“Who pays that price? You’re darn right — we do, the beneficiaries. It is just horrendously unacceptable to normalize that losing $30 million in the middle of a housing crisis is somehow OK and that there is any excuse valuable enough that would make that OK,” Danner said, referring to the loss of housing funds in recent years.

Jobie Masagatani, chairwoman of the Hawaiian Homes Commission and DHHL director, contends the agency is putting its federal housing funds to good use, paying for things like homeowner financing and infrastructure for homestead communities. And, she said, the department continues to award homestead lots.

“That’s a challenge that we have. You’re trying to address the housing need, but what we get evaluated against is, ‘Well, how many people did you actually award a lease to?’” said Masagatani, who was confirmed as DHHL director in 2013.

Where money goes

In its annual NAHASDA performance report to the federal government, DHHL said it spent $19.3 million last fiscal year and had $29.8 million in unspent funds remaining. Masagatani said $12.5 million of the unspent balance is under contract but not yet paid out.

Some of the outcomes reported for the year were:

>> 76 vacant lot leases awarded for single-family homesteads in Upcountry Maui and Windward Oahu.

>> 69 three- and four-bedroom rental homes in a rent-with-the-option-to-buy pilot project in Kapolei converted to homestead leases.

>> $7.5 million issued in direct home loans.

>> $7.8 million spent on capital improvement projects.

>> Homebuyer education services provided for 160 households.

Masagatani said the department has historically provided homesteads for single-family residences versus multifamily dwellings such as condominiums and townhomes. “That’s kind of what we do the best … where we put in the infrastructure, the land is at $1 a year, so that’s already a huge benefit to the family,” she said.

She said in general DHHL has transitioned from providing turnkey homes — with a lot and dwelling — and returned to a previous practice of awarding land lots with infrastructure to allow beneficiaries to build their own homes.

“In response to primarily beneficiary requests we’ve moved from where we hire a developer and build turnkey, to providing the lot and allowing the families to build what they can afford and what suits them,” Masagatani said.

But with the bulk of the homestead waiting list on Oahu, where less than 4 percent of trust lands are located, Masagatani said the agency is exploring building rental housing and condominiums in urban Honolulu and Kapolei.

“In this area,” she said, motioning outside a window in the department’s Kapolei offices, “we have been looking at increasing densities, close to the rail stations. It may be rentals, it may be condo. In this market where it makes more sense, then yes, we have been looking at multifamily.”

Another site being eyed for multifamily housing units is the former Bowl-O-Drome bowling alley, which closed in 2004 and sits on about 2 acres of DHHL land on Isenberg Street in Moiliili. “We’ve been working on the environmental work that needs to happen, the initial plans in order to see what can be done in terms of multifamily — likely rental — housing,” Masagatani said.

Multifamily options

State Sen. Will Espero, chairman of the Senate Housing Committee, said he’s been asking DHHL to consider developing a high-rise or condominium to get more beneficiaries housed. “They never really pursued that request,” Espero (D, Ewa Beach-Iroquois Point) said.

He and the chairmen of the House and Senate Housing and Hawaiian Affairs committees plan to hold a joint legislative briefing at the Capitol on Oct. 19.

“There’s a lot of possibilities and that’s what the hearing is all about: to see what we’ve done, where we want to go and how the Legislature can help,” Espero said.

Danner said her organization also has been “demanding that the department do rental housing so at least families on the waitlist have an opportunity to be housed. Or condos — that’s a legitimate home-ownership option.”

She said the homestead associations have been frustrated for years with the stagnant waitlist and want to see NAHASDA funds flow to a nonprofit housing agency instead of DHHL. Danner said Hawaii’s grant is the only one that is awarded to a state government. The more than 200 other NAHASDA grant recipients are nonprofits like the Navajo Housing Authority.

“In the next reauthorization of NAHASDA, we want to work with our congressional delegation to bring our people parity with all other native peoples,” she said. “By removing DHHL as the grantee, we will be able to do what DHHL will never be able to do — leverage that capital with philanthropic dollars.”

Danner’s organization wants an entity it created in 2009, the Homestead Housing Authority, to be a recipient of the federal housing dollars. The group recently completed a pilot project of a dozen so-called tiny homes on Kauai that could serve as models for additional dwelling units on homestead lots, she said.

“We decided we’re not going to be complainers. We want to take responsibility for the condition of that waitlist and the condition of our families,” she said. “Our people will not be denied their right to housing.”