Editorial: Accountability for Department of Hawaiian Home Lands’ funds

The warning signs are hard to ignore. So is the clear momentum that has built behind legislation to make a huge investment to address the massive backlog in fulfilling the trust obligations of the federal Hawaiian Homes Commission Act.

First, the momentum: Companion bills introduced in the House and Senate have crossed over, and it’s clear to see why. Senate Bill 3359 and House Bill 2511 each propose to appropriate $600 million for the state Department of Hawaiian Home Lands and its mission to carry out the act by giving homestead leases to the beneficiaries of the century-old law.

These are people of at least half Native Hawaiian ancestry. The program is meant to restore Hawaii’s indigenous people to the land from which they were alienated due to the overthrow of the Hawaiian kingdom.

That explains the support. The warning signs come from ongoing worries about DHHL’s weak record of performance. A recent investigation by the Honolulu Star-Advertiser in partnership with the ProPublica Local Reporting Network unearthed the need for the agency to exercise more due diligence.

Legislators are thus compelled to ensure that sufficient controls are put on that much taxpayer money before this appropriation is enacted.

Over the decades and for various reasons, an enormous waiting list of 28,000 beneficiaries accrued, and DHHL struggled to deliver. More recently the agency has worked to help its unserved people in other ways. For example, adding rental housing developments to the offerings has been a solution especially for beneficiaries unready for a mortgage.

But despite court settlements providing some state funds in the past, DHHL’s governing Hawaiian Homes Commission still finds itself in charge of a land-rich but cash-poor trust. So there is considerable support for the state making a significant appropriation, including from housing advocates who serve more than Native Hawaiians.

For one, Rob Van Tassell, president and CEO of the nonprofit Catholic Charities Hawai‘i, testified on SB 3359 that the agency “supports the bill as a social justice issue.

“Native Hawaiians are overrepresented among the homeless,” he said in written testimony before the Senate Ways and Means Committee. “They have suffered many social, health and economic ills over the years that could have been prevented if stable and affordable housing was available. The time is now.”

Many legislators see the overall effort in the same way. Making headway against the broader shortage of affordable housing has been a stated goal for some time, but this was undercut by the fiscal instability of the pandemic.

And now that the Democratic leadership has a budgetary surplus in hand, they’ve decided the DHHL initiative could produce homes available only to Hawaii residents. The argument: This would be a better-focused campaign for affordable homes than a conventional partnership combining limited low-income housing with market-priced units that nonresident investors might also buy.

They have a point. Hawaiians are an unconscionably large part of Hawaii’s unhoused, or poorly housed. But there is risk in committing a major outlay of funds to the DHHL delivery system, given its history of inefficiencies and troubles.

The latest tale of woe was told by Star-Advertiser writer Rob Perez, who recorded the stories of nearly 80 Hawaiian homesteaders. Their elation after getting their home — and off the waiting list, after many years — evaporated when serious construction problems started coming to light.

This can be the sad experience of homeownership, certainly not limited to beneficiaries of a special program. But unlike conventional home purchases, this time the new owners did not choose the builder. DHHL did, but did not pay for a building inspector hired to look out expressly for beneficiaries’ interest.

DHHL has countered that it met its legal obligation, which is to deliver a buildable lot. But as a matter of policy, it can and should do more. If the agency contracts out the construction service, it does so with the expectation that most beneficiaries need that service.

Part of that contract is the right of inspection, and DHHL should exercise that right, providing some oversight of the transfer of ownership and responsibility to the homeowner.

As for the $600 million legislation, it’s clear that DHHL needs oversight as well. Both bills require an accounting report to the Legislature, but SB 3359 spells things out more explicitly, which is the preferable approach.

It would allocate $488 million for the production of 2,910 lots in specified projects. The remaining $112 million would offer up to $100,000 for a beneficiary willing to relinquish his or her claim for a lease.

This is the outline of a framework to make real gains in Hawaii’s affordable-housing mission. However, whether at the end it’s $600 million or something less, that’s too much in public funds to commit, to even an important mission, without accountability.