In 2023, the Hawaii Legislature approved $600 million for Department of Hawaiian Home Lands (DHHL) acquisition and preparation of homesteads, envisioned as resulting in 2,000-plus homes for qualified Native Hawaiian beneficiaries — but the agency is aiming to deliver additional housing. Tell us more.
DHHL is currently and aggressively leveraging Hawaii’s Act 279 appropriation of $600 million to pursue additional federal funding, with the federal Bipartisan Infrastructure Law in place and funded. The goal is generating at least 6,000 new homesteads.
We are pursuing federal funding programs that include: U.S. Department of Agriculture (USDA) Rural Development home loans for Native Hawaiian families; USDA Water and Environmental Programs funding for water and waste facilities in rural communities; Environmental Protection Agency State Revolving Funds for water infrastructure; and more new programs under the Inflation Reduction Act and infrastructure act. We’re seeking out federal tax credits for energy-efficient housing, so families benefit from lower housing and energy costs. And we’re collaborating with partners, including other state and county governments, nonprofits and the private sector.
What other legislative, administrative or major project management steps must follow, from here?
The Legislature has been briefed, with the submission of our updated strategic plan as Act 279 requires, and is supportive. We are in the process of encumbering all Act 279 funds by entering into developer agreements and land purchase agreements, subject to release of funds and approval by the governor, the Department of Accounting and General Services and the Department of Budget and Finance.
The bulk of the $600 million appropriated by Act 279 will be encumbered by June 30, 2024, allowing us to complete or start all projects by 2026. Acquisition of new private lands for future development is also part of the strategic plan.
Some questions have come up about “paper leases” or executed property rights for those on the wait list, in advance of a property being ready for occupancy. For most, DHHL expects a “true lease” to be available for projects in or near their current lease as DHHL’s strategic plan unfolds. One sticking point at this time: Waimanalo, where there are no current developments in progress. Any updates?
Future development in Waimanalo is planned, but the proposed property is still under a lease with the Department of Land and Natural Resources and must be transferred to DHHL. We may offer opportunities for these property rights-holders to participate in other homesteading projects, or, they can choose to keep their paper lease and wait for the future development.
Can you describe some of the internal changes and developments that leave you confident that DHHL can execute $1.2 billion in projects by 2026?
Originally, DHHL’s plan was to use the $600 million from Act 279 in a Phase I, then expand development in a Phase II, dependent on federal funding. However, we’ve pivoted in approach, combining phases and leveraging state funds as matching funds, the more typical approach.
We’ve added skilled, development-oriented personnel and changed our approach by doing large projects across the state using qualified developers. The chosen developers will handle both the infrastructure and vertical housing construction, significantly reducing per-unit costs and expediting developments. Creating affordable housing and awarding homesteads as soon as possible, before beneficiaries pass away, is extremely important. There are over 20 viable and large projects in the works which involve large numbers of residential units.
Our DHHL-affiliated nonprofit Na Kupa‘a is also pursuing federal funds; it is federally qualified and has historically been very successful in raising federal funds for infrastructure, such as homestead water systems. Thus far, Na Kupa‘a and DHHL together have accessed $38.9 million in federal funds.
Outline the DHHL strategy for getting very low-income Hawaiians on the wait list into homestead housing. Why is this necessary?
Our strategy is to use several approaches. One is working with Habitat for Humanity for those that want to participate in the self-help, sweat-equity program, which supplies 0% loans. Another is to use Hawaii Housing Finance and Development Corp. low-income housing tax credits, bonds and rental housing loans for DHHL’s rent-to-own program.
DHHL needs to be innovative to address beneficiaries’ needs. In urban Honolulu, where DHHL has little land, going up with more density means we can serve more wait list beneficiaries, which is the largest group over all the islands. For example: We used a competitive process to award a developer agreement to Stanford Carr, which is building a $161 million, 277-unit condo and townhouse project next to Stadium Park at no cost to DHHL.
