Historic Hawaiian homestead funding approved

The state Department of Hawaiian Home Lands is a couple of short steps away from receiving a record $600 million largely to produce a few thousand homesteads for Native Hawaiians.

A negotiating committee of state lawmakers agreed Thursday on a final version of a bill to deliver such funding that includes $488 million for homestead lot development and $112 million for around 1,120 DHHL beneficiaries to use for existing rent or mortgage payments instead of accepting a homestead.

In January nearly all Hawaii lawmakers endorsed the idea of giving DHHL $600 million this year, and now the Legislature is just two floor votes away from sending the funding measure, House Bill 2511, to Gov. David Ige, who is expected to sign what is described as a historic contribution to an agency that for decades has failed thousands of Hawaiians.

“What we said in the beginning of session we will be passing today,” Rep. Sylvia Luke (D, Punchbowl-Pauoa-Nuuanu) said at Thursday’s joint House and Senate conference committee meeting.

Sen. Jarrett Keohokalole (D, Kailua-Kaneohe), co-chair of the legislative Native Hawaiian Caucus, said he was extremely grateful and humbled to be at the table in the state Capitol for the committee’s unanimous vote.

“It’s an amazing feeling to be in the room for this,” he said.

“This is a historic moment,” added Rep. Stacelynn Eli (D, Kalaeloa-Ko Olina- Maili), whose district has an abundance of Hawaiian community members and DHHL subdivisions. “This is something that Native Hawaiians have been waiting for for a long time.”

Thursday’s key vote came two days after another committee of lawmakers approved $328 million to settle a 23-year-old lawsuit and compensate about 2,700 DHHL beneficiary plaintiffs who didn’t receive homestead land leases in a timely manner, including about 950 descendants of plaintiffs who died while the case against the state was being litigated.

Rep. Gene Ward (R, Hawaii Kai-Kalama Valley) noted that the two contributions amount to nearly $1 billion.

“That’s real change,” he said. “That’s real history.”

Since the state inherited the homestead program in 1959, after it was created by Congress in 1921 under the Hawaiian Homes Commission Act to compensate for the government’s history of taking Hawaiian land, a waitlist for homesteads has grown to include about 28,700 applicants.

Beneficiaries of DHHL have to be at least 50% Hawaiian and can receive lots with 99-year leases that cost $1 a year, though they have to pay to build their own home.

DHHL, which has about 9,980 lot lessees, has struggled with delivering anywhere close to enough homesteads because of historically low funding and high infrastructure development costs on its land, which is largely outside urban areas.

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

With $488 million, DHHL projects it can develop 2,910 homestead lots at 11 existing projects on Oahu, Maui, Molokai, Hawaii island and Kauai by 2028.

The biggest planned addition would deliver 1,255 lots in East Kapolei for $107 million. DHHL’s smallest anticipated residential lot delivery in the mix is 58 lots on Molokai for $30 million.

Also on the funding list in the bill are 25 pasture lots in Kau on Hawaii island that would cost $40 million including a water system, and 40 lots for subsistence agriculture in Honomu on Hawaii island for $2 million.

The idea to provide $112 million for distribution to beneficiaries on the waitlist was produced in the Senate after discussions with DHHL about how many homesteads the agency could deliver in the next several years.

At Thursday’s committee meeting, House negotiators basically agreed to this idea, which could allow beneficiaries to waive a homestead award in exchange for up to $100,000 if used to help buy a home not on DHHL land, or even to pay down a mortgage on a home they own outside a DHHL subdivision. The payment, Luke added, also could be used for rent.

One provision the committee added to the bill Thursday is for unencumbered funding to lapse at the end of three years. That might or might not reduce the number of homesteads DHHL delivers with the appropriation in HB 2511, given the agency’s estimate for developing 2,910 homesteads by 2028.

William J. Aila Jr., DHHL director, expressed thanks Thursday to members of the conference committee and acknowledged many others, including other legislators and DHHL staff who worked diligently to move HB 2511 forward.

“A $600 million infusion of funds to the Department would not only be historic but also provide the Department funding to gain momentum towards the fulfillment of the Hawaiian Homes Commission Act,” he said in a statement. “We anxiously await a positive outcome following a final floor vote in the coming days.”