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The Hawaii Department of Native Lands sent the Legislature a finalized plan to spend $600 million that lawmakers appropriated earlier this year largely to facilitate homeownership for DHHL recipients.
DHHL is also asking lawmakers to introduce six bills in January aimed at making the agency more productive by removing regulatory restrictions and boosting finance, including a proposed bill that DHHL said is necessary. to fully utilize the historic $600 million within three years as directed by the Legislature. .
The report, sent Tuesday, closely mirrors a preliminary plan that was endorsed in August by the Hawaii Housing Commission and criticized in October by two advocacy organizations representing existing and future Hawaiian settlers.
DHHL’s final plan estimates that 2,727 residential lots can be developed with up to $540 million, compared to 3,163 lots in the preliminary plan. The agency also anticipates producing 177 rental apartments, acquiring some land, and spending about $60 million in other assistance for recipients that could include down-payment help to buy a home and rental assistance.
“We have laid out a blueprint for what is possible to accomplish given all the information we have about creating new home lots and leveraging other resources to work in conjunction with this funding,” William Aila Jr., director of DHHL, said in a statement. “The plan is rooted in reality and flexible enough for the next administration to make necessary adjustments and find innovative solutions to meet the needs of the beneficiary community.”
Under the Hawaiian homestead program, created in 1921 by federal law and administered by the state since 1959, DHHL recipients must be at least 50% Hawaiian and can receive 99-year land leases for $1 a year, but pay or build their own houses.
Approximately 28,700 applicants are on a housing waiting list and more than 2,000 recipients have died while on the list, according to an analysis by the Honolulu Star-Advertiser and ProPublica.
The agency has about 10,000 lot tenants, but has struggled for more than 60 years under state control to do more, in part due to relatively little previous funding and expensive infrastructure costs to develop its land, which often located outside of urban areas.
The Sovereign Council of Hawaiian Homestead Associations and the Association of Hawaiians for Homestead Lands previously criticized DHHL’s plan and produced their own plan that was sent Monday to the Legislature and newly inaugurated Governor Josh Green in hopes it will be implemented by the Green’s administration, which is still forming.
SCHHA and AHHL contend that DHHL should use the $600 million primarily to expand its properties and help beneficiaries pay for private equity-leveraged housing, while relying on the Legislature to provide bond financing to pay for development of lots on land. that the agency already owns.
The competing plan recommends that $345 million be used to purchase land or existing homes for use by recipients and $138 million to help recipients with home purchase costs, including down payments, closing costs, and reductions in Interest rates.
Another $51 million is recommended for mortgage and rental subsidies, and $60 million for housing development.
The two nonprofits’ plan also includes recommendations to help DHHL become more productive, including expanding procurement capabilities and creating an internal building permit division to circumvent a backlogged county permit system. .
“Our plan boldly leverages that support to maximize more land awards, building more housing units of all types; and even acquire more housing units and land,” KipuKai Kuali’i, chair of the SCHHA Policy Committee, said in an email. “We absolutely believe we have to maximize the impacts of this investment by creating transformational change in our State Department of Native Hawaiian Lands. We can’t afford business as usual. Too many of our grantees have been suffering without housing opportunities for too long.”
Lawmakers gave DHHL broad latitude to spend the $600 million under Law 279, also known as the Waiting List Reduction Law.
Money can be spent on development or purchase of lots and homes, primary residence mortgage or rental subsidies for beneficiaries, funding to help waitlist applicants purchase a home, and “other services that are necessary to address the waiting list.
Any amounts not taxed as of June 30, 2025, revert to the state’s general fund.
DHHL noted in its final report that a provision in the state Constitution limits biennial appropriation spending to only one year after the biennial period, which means until June 30, 2024, under Law 279. Therefore, the agency is seeking a bill that would reallocate the $600 million in the subsequent biennial period to allow spending through June 30, 2025, as planned.
Other bills proposed by DHHL would exempt home lots and housing expenses from general state excise taxes, repeal a 2024 expiration on a waiver for DHHL to pay state school impact fees, and repeal a 2024 expiration on a waiver for DHHL to obtain county affordable housing credits for lot or home production.
Such credits may be sold by DHHL to housing developers so that those developers do not have to produce affordable housing as part of development projects that require such contributions under county regulations.
Two other bills sought by DHHL would allow the agency to govern historic preservation assessments for its projects instead of the State Division of Historic Preservation, and would allow the use of interim rules for up to 18 months without being subject to state public notice, public hearing and governor approval requirements.
Under the spending plan, nearly all of the $540 million to develop lots and some rental housing is focused on accelerating work on 20 DHHL subdivisions already in various stages of production, from planning to design, permits and contracting for construction.
These include 781 lots in Kapolei for $149 million and 600 in Ewa Beach for $48 million. In Maili, $60 million is anticipated to produce 144 lots and a 136-unit rental townhouse project.
On Kauai, $28 million is slated to pay for 75 residential lots and 115 agricultural and grazing lots.
On Maui, $105.5 million is expected to allow for the development of 411 residential lots and 50 subsistence agricultural lots.
The Molokai spending is projected to result in 20 residential lots and a 16-lot farm subdivision for $9.5 million.
On the island of Hawaii, DHHL anticipates producing 400 residential lots and 40 subsistence agricultural lots for $73 million.
For Lanai, $2 million is planned to be spent on off-site infrastructure to allow for further development of 75 lots.
DHHL notes in its plan that actual construction costs will influence the amount of development and financial assistance that can be provided with the funds.
