The state Department of Hawaiian Home Lands (DHHL) is pushing forward with plans to include at least 500 and potentially more than 1,100 rent-to-own homes within its vision to create about 6,000 homesteads in coming years. While there have been questions, and complaints, it’s the right thing to do, serving a segment of Hawaiian households that has largely been shut out of DHHL homestead housing over the decades.

The rent-to-own units will be mostly single-family homes, but will also include one townhouse complex and potentially other multi-unit buildings, with conveyance structured to provide a path to ownership for beneficiaries with low and very low annual incomes — at or less than $55,020 for a single person, $62,880 for a couple and $78,600 for a family of four. Rules attached to the federal grants and tax benefits provided for DHHL housing require that these beneficiaries live in and pay rent for the units for 15 years before they can qualify to buy the home.

The typical DHHL award to beneficiaries has been a residential or agricultural lot — a homestead — with a 99-year lease at $1 a year. Beneficiaries of these lots must pay for their own house — either to build it themselves or to buy a built home.

Those on the wait list for a lot or single-family home must have sufficient income to qualify for a loan to get these awards. But lower-income Hawaiians on the list may never have sufficient income to qualify under these circumstances. A very few low-income beneficiaries were able to leverage help from other agencies such as Habitat for Humanity to get a house built, but the numbers have been vanishingly low.

That justifies DHHL’s decision to press ahead with making a portion of homesteads affordable via rent-to-own — and for DHHL Director Kali Watson, it’s not a difficult choice. He says most wait list applicants, in fact, have incomes at or below 60% of Hawaii’s median income, and this option is a way to include them.

Too many Hawaiians on the homestead wait list have died before qualifying, Watson said, and he wants to change that. “Unless we used this approach, many would not qualify for home ownership, which has unfortunately and historically been the case for over 100 years, since the beginning of the (homestead) program,” he stated. It’s a compelling argument.

Further, potential beneficiaries of all income levels should not lose sight of the fact that because the state Legislature has approved a groundbreaking $600 million to allow for action, the pace of building and delivering homesteads is accelerating rapidly and impressively. It should go from a rate of 300 to 400 homes annually before Watson’s tenure, to a hoped-for 6,000 over the next few years. If all 1,100 rent-to-own homes are created, as optimally estimated by DHHL, it would be 18% of the entirety of homesteads that are expected to be offered.

About 28,700 applicants are currently on the wait list, including many who have been on for decades, and many who have left Hawaii in search of affordable housing. In a 2020 survey, 9% of those on the wait list said they hoped for a rent-to-own single-family house.

“We need to get the information out that the program is changing,” Watson said. “We have a lot of projects that are in the works. And people need to get ready; they need to be considering moving back to Honolulu (and Hawaii).”

Including low-income Hawaiians within a portion of homesteads developed by DHHL is proper, and beneficial for communities as a whole, as neighborhoods integrating mixed incomes are more healthy and stable than financially segregated ones. For example, a DHHL development of 82-homestead lots on Kauai will include 30 rent-to-own lots. This should be typical of all housing developments benefiting from public funds, including those benefiting Native Hawaiians.