A contentious plan by the state Department of Hawaiian Home Lands to buy a Kauai apartment complex for homesteading attracted demonstrators Monday and Tuesday outside a Hawaiian Homes Commission meeting in Wailua.
Some residents at the 82-unit Courtyards at Waipouli complex, along with advocates, displayed signs critical of the pending acquisition, which stands to displace about 300 people, and also testified during the two-day meeting.
Sam Wampler told commissioners that he already has looked for affordable replacement housing on Kauai to no avail.
“If I lose my apartment, I will essentially be homeless,” he said at Monday’s meeting. “This is the story of so many of the residents, and this will be detrimentally affecting Kauai.”
The demonstration Monday and Tuesday was part of a continuing effort by Courtyards residents and supporters to deter the $60 million project by DHHL on multiple fronts for almost a year.
At the same time, DHHL Director Kali Watson has been unwavering in his push to complete the purchase amid opposition, which also has come from some DHHL beneficiaries and commission members.
Rent-to-own homesteads
Traditionally, beneficiaries who are at least 50% Native Hawaiian have been awarded residential, agricultural or pastoral homestead lots with 99-year leases for $1 a year under the more than century-old homesteading program intended to return Hawaiians to their ancestral lands.
The Courtyards project would provide a rent-to-own option for beneficiaries who have low incomes and can’t pay for their own house on a lot under the homestead program.
DHHL intends to buy and renovate the Kauai property, then award homestead leases to beneficiaries earning no more than 60% of the median income, and in some cases under 30%.
Initially, lessees would pay rent to DHHL while saving money to buy their unit after 15 years.
DHHL projects monthly rent will be $554 to $1,667 depending on household income and apartment size. Units range from one to three bedrooms.
Under the rent-to-own plan, no portion of paid rent would be applied toward a purchase, but the purchase price would be affordable, based on household income at the start of the rental period.
Still, there has been pushback from some stakeholders.
Some of the concern involves low-income beneficiaries on DHHL’s waitlist receiving a homestead lease before beneficiaries who have been on the waitlist longer but don’t qualify by income.
About 28,700 applicants are on DHHL’s waitlist, including many who have been on it for decades.
Another concern is whether enough beneficiaries will accept a Courtyards lease.
Divisive plan
At a Jan. 16 commission meeting, the nine-member panel chaired by Watson rejected the department’s request to approve a Courtyards purchase in a 4-5 vote.
On Jan. 26 another vote was held after a more thorough presentation by department officials, some lobbying by Watson and a contentious debate.
DHHL also tweaked its proposal, which during the Jan. 16 meeting had been presented as a rental project for low-income seniors on DHHL’s waitlist under a partnership with the King Lunalilo Trust.
About 15 DHHL beneficiaries testified against the revised plan at the Jan. 26 meeting. Watson presented letters of support from state Senate President Ron Kouchi (D, Kauai-Niihau), House Majority Leader Rep. Nadine Nakamura (D, Hanalei-Princeville-Kapaa) and Kauai Mayor Derek Kawakami.
Still, commissioners remained split.
Dennis Neves, the commission’s Kauai representative, who voted against the Courtyards plan Jan. 16, got into a heated exchange with Watson. At one point Neves questioned beneficiary demand for rent-to-own townhomes and said some Hawaiians would be evicted from the Courtyards.
Watson said only two Hawaiian couples live in the complex, and questioned whether Neves was upholding his fiduciary responsibility under the homestead program.
“What about the Hawaiians on our waitlist?” Watson asked Neves. “Shouldn’t that be your priority?”
The exchange prompted Commissioner Walter Kaneakua to request a recess.
After the timeout, commissioners voted 5-3 to approve the purchase, as one member, Michael Kaleikini, changed his position from the prior vote. Another member, Sanoe Marfil, was excused.
Financing challenges
Meanwhile, DHHL has had difficulty financing its Courtyards acquisition, though it retains a purchase option with the seller, KK Waipouli LLC.
Initially, the agency applied in 2023 to the Hawaii Housing Finance and Development Corp., a state agency, for financing to help acquire and renovate the Courtyards. But DHHL’s application received a low score among competing project funding applications and wasn’t approved.
In February, DHHL submitted two new applications for HHFDC’s current annual financing opportunity. One application, seeking a mix of tax credits and a loan, failed to receive an award. The other application, which seeks a mix of tax credits, a $7 million loan and $35 million in bond financing, remains pending. DHHL also intends to use $25 million in federal funding as part of its plan.
During a June 13 HHFDC board meeting, former Kauai Mayor JoAnn Yukimura said DHHL and HHFDC would suffer a blow to their reputations if the acquisition happens and Courtyards tenants are evicted without DHHL being able to lease all the units to beneficiaries.
Chasetyn Hasegawa, a part-Hawaiian Courtyards resident who doesn’t qualify for a DHHL homestead, told HHFDC’s board that there is much land on Kauai available for homestead development that could serve beneficiaries without displacing other Kauai residents. Hasegawa also said he expects that he would have to leave the island if evicted.
“It is very, very hard to find a place (to live),” he said.
Project support
The commission and HHFDC also have been encouraged by DHHL beneficiaries to support the Courtyards project.
Kauai homesteader Jeremie Makepa told commissioners at Tuesday’s meeting that he is offended by Courtyards residents and their advocates vilifying DHHL.
“I commend Chair Watson for standing up for our people and looking out for what is best for the people who’re still waiting and living with mom and dad, and grandma and grandpa, waiting on the list for 40 years,” he said.
Watson has said that DHHL, if successful with its acquisition, is going to help Courtyards residents find replacement housing that DHHL will subsidize if it costs more than rent at the Courtyards property.
This assistance is required under federal law triggered by DHHL’s use of federal funding. Watson said at a recent legislative briefing that such rental assistance would be available for 42 months.
At Tuesday’s commission meeting, Watson told residents, “It’s not like you’re going to be kicked out with your bags on the sidewalk and left to fend for yourself.”
Watson also said he empathizes with Courtyards tenants but that he is at DHHL to help Hawaiians on the waitlist. “We’re just trying to correct a very ineffective program that has existed for over 100 years,” he said. “We got a lot of people dying on the waitlist, living in overcrowded conditions.”
More than 2,000 homestead applicants have died while on DHHL’s waitlist, according to a 2020 analysis by the Honolulu Star-Advertiser and ProPublica.
Watson said it could be a year or longer to complete the Courtyards acquisition and make units available for beneficiaries. He also said that if HHFDC financing doesn’t get approved, then the agency has other options and will be successful.
