Honolulu City Council members and the state Department of Hawaiian Home Lands on Tuesday unveiled a Council resolution to approve the transfer of city residential property in Kailua to DHHL to develop single-­family homes for Hawaiian home lands beneficiaries.

The 10.038-acre Kalaheo property near Kalaheo High School by Ilimano and Iliana streets — between the Kailua Assembly of God Church and a 206-acre parcel owned by Castle Residuary — would be transferred from the city to DHHL.

“Today’s announcement marks another pivotal moment in the (City) Council’s commitment to Native Hawaiians and strengthening its partnership with the state to create more affordable and multigenerational housing for kamaaina,” Council Vice Chair Esther Kia‘aina said. “Kailua is a place rich in culture, history, landscapes and moolelo. Establishing a Hawaiian homestead in Kailua will ensure that Native Hawaiians will be able to continue to live and thrive in this special place.”

Kia‘aina said that when she discovered the unused Kalaheo property in Kailua, she wanted to make use of it.

“I was looking at all city properties and how we can increase housing in general,” Kia‘aina later told the Honolulu Star-Advertiser. “To be honest with you, I never thought about the Hawaiian home lands.”

In 2015 the city requested approval to market and sell the Kalaheo property with a minimum starting bid of $10.455 million.

However, Kia‘aina said she believed that the process would be more straight­forward if the city gave the land to DHHL to initiate a housing project for beneficiaries.

The Kalaheo property was purchased by the city in 1961 from the Kaneohe Ranch Co. to construct an elementary school. However, the state Department of Education abandoned initial plans after finding an alternative site, which became Kainalu Elementary School on Kaiholu Street.

The DOE then informed the city that the Board of Education approved the return of the Kalaheo property to the city’s jurisdiction for disposal.

While the number of homes to be built on the lot remains undetermined, pending further assessment of infrastructure costs and traffic flow, Kia‘aina wanted to maintain Kailua’s neighborhood and community aesthetics by developing single-family homes instead of multifamily homes.

She decided to award DHHL with the project, believing private developers would be uninterested in the property, as they would prefer developing multifamily homes for higher profits.

With her family living on Hawaiian home lands, Kia‘aina saw awarding the lot to DHHL as a “win-win” situation to house beneficiaries and utilize idle land.

“Now the beauty of this is it’s going to be in perpetuity,” Kia‘aina said. “These lands will be in perpetuity, so they can never go to foreign investment or outside investors.”

The city has approved $20 million in capital improvement project funding for affordable housing infrastructure development, prioritizing sites identified by DHHL. The allocation includes $10 million for planning, $9.9 million for design and $100,000 for miscellaneous expenses.

A portion of the $20 million, yet to be determined, will be allocated for the development of homes for beneficiaries on the Kalaheo property.

A median price for a home in Honolulu is $1.1 million, according to Council Chair Tommy Waters.

“That’s ridiculous,” Waters said. “So this is one small step that we can make, to achieve the goal of more affordable housing.”

Chairman of the Hawaiian Homes Commission Kali Watson said he’s “very excited” to take on this project aimed at beneficiaries, especially because it would include “not only a new homestead community, but more than that, addressing the waitlist.”

“Unfortunately, a lot of people on our waitlist are dying,” Watson said.

Watson also said the progress of the project is “very timely, not only with the Legislature providing $600 million, with the City and County of Honolulu being active and moving in a program for it. So we look forward to working with the county not only on this project, but many more.”