$600 million investment plan for Hawaiian homesteads advances

Pivotal Hawaii lawmakers have pushed ahead a monumental pledge by leaders in the Legislature to invest $600 million in the development of several thousand homesteads for Native Hawaiians.

Members of financial oversight committees in the House and Senate voted unanimously Thursday to advance similar bills that would make a historic contribution to the state Department of Hawaiian Home Lands so it can trim an embarrassing backlog of around 28,700 applicants on a wait-list for homestead lots.

The Senate Ways and Means Committee voted 8-0 while the House Finance Committee voted 14-0 to pass Senate Bill 3359 and House Bill 2511, respectively.

“I want to thank lots of people who helped with this,” Sen. Donovan Dela Cruz, Ways and Means chair, said just before the Senate committee vote.

DHHL anticipates being able to deliver 2,910 homestead lots on Oahu, Maui, Molokai, Hawaii island and Kauai by 2028, according to Dela Cruz, who included a breakdown of nearly 20 projects in a newly amended draft of SB 3359.

The 2,910 lots are projected to cost $488 million.

An additional $112 million would be available to DHHL beneficiaries on the wait-list who may relinquish their claim in exchange for up to $100,000 if used to help buy a home that is not on DHHL land or even to pay down a mortgage on a home they own outside a DHHL subdivision.

The proposed investment in DHHL’s homestead program has received much public support, largely from beneficiaries as well as from organizations including the Office of Hawaiian Affairs, Catholic Charities of Hawaii, the League of Women Voters of Hawaii, the Hawaii Alliance for Community-Based Economic Development and the Hawaii Appleseed Center for Law and Economic Justice.

A majority of lawmakers — 46 of 51 House members and 16 of 25 Senate members — introduced or sponsored the legislation after House Speaker Scott Saiki publicly unveiled the DHHL funding goal Jan. 19 during an opening-day speech for this year’s legislative session.

At a House Finance Committee hearing Tuesday, about 330 pages of written testimony on HB 2511 was received, and just about all of it encouraged passage.

“This bill is historic in nature,” Kuhio Lewis, CEO of the Council for Native Hawaiian Advancement, said at Tuesday’s hearing.

Lewis, who received a homestead award 12 years ago, said he would not be where his is today if not for the award.

“It has provided me amazing opportunities in life, stability, a place for my kids to sleep at night,” he said. “And this is what you’d be affording thousands of Hawaiians: a shot at life, a shot at sustainability and an opportunity to grow and become contributing citizens to this state.”

Regina Peterson, who is on DHHL’s wait-list, told Finance Committee members that she is hopeful the proposed $600 million investment represents only the start of continued big annual contributions beyond what the state has previously provided, because $600 million in her view is inadequate.

“I’m a wait-lister,” she said. “My grandmother was a wait-lister. … My grandmother was not able to even have an opportunity to know what having a home on Hawaiian lands would have been like.”

Even if the $600 million is delivered, Peterson said she might not realize her longing to have a home on a DHHL lot.

More than 2,000 beneficiaries have died while on DHHL’s wait-list, according to an analysis by the Honolulu Star-Advertiser and ProPublica.

The homestead program was created in 1921 through the federal Hawaiian Homes Commission Act to compensate for the government’s history of taking Hawaiian land.

The state inherited the program as a condition of statehood in 1959 but has struggled for over 60 years to deliver more than a relatively small number of homesteads, in part because of little funding and expensive infrastructure costs for DHHL land, which is often outside urban areas.

Under the program, beneficiaries must be at least 50% Hawaiian and can receive 99-year land leases for $1 a year but have to pay for or build their own houses.

DHHL estimates it would cost at least $6 billion to develop enough lots on its land for all beneficiaries, based on a conservative per-lot estimate of over $150,000.

A $600 million investment would represent the biggest one-time deposit in the program’s 100-year existence. The Legislature approved $600 million in 1995 as part of a settlement over state obligations, but the sum was distributed over 20 years.

Hawaii lawmakers in 2021 appropriated a record $78 million for DHHL to develop more than 700 homestead lots.

Rep. Bertrand Kobayashi (D, Diamond Head-Kaimuki- Kapahulu) voted for HB 2511 Thursday after suggesting that a $600 million appropriation perhaps should be distributed in increments.

“Certainly, DHHL cannot spend $600 million in one year, or two years, or perhaps even three years,” he said.

Kobayashi agreed the agency needs money but cited Tax Foundation of Hawaii testimony that recalled the difficulty DHHL had in recent years fully spending federal funds, including $9 million in 2015.

DHHL Director William J. Aila Jr. told the Finance Committee on Tuesday that the agency has overcome its trouble spending all federal funding and is receiving $5 million this year.

Beneficiaries and advocacy groups don’t want $600 million parceled out, and they intend to keep pressing for one of the pending bills to become law.

The Council for Native Hawaiian Advancement announced last week that it had begun running a 60- second TV ad on all major local stations as part of a public awareness campaign that also will include print and digital advertising to bolster support for the legislation.

The ads feature three beneficiaries, including Hi‘ilani Shibata, who has been on DHHL’s wait-list for 23 years. She says in the ad that she initially didn’t want to apply after graduating from high school because the wait seemed hopeless.

‘Aina Paikai, a 20-year wait-lister, also is featured. “Part of me is more sad for those that have died on the list,” he said in the ad. “This was a promise made to our people. Just do what you said you was gonna do.”

The bills are now on a path where the House is expected to receive the Senate bill for committee consideration, and vice versa. If a majority of all lawmakers vote to pass one version, which could receive subsequent amendments, it would be sent to Gov. David Ige for his consideration on enactment.