Kali Watson, attorney and Director of the Department of Hawaiian Home Lands & Chair of the Hawaiian Homes Commission, joins producer/host Coralie Chun Matayoshi to discuss new options and tools to get Hawaiian home land beneficiaries off of the waitlist, including rent-to-own housing, subsistence agricultural lots, zoning exemptions, “in house” building permit approval, and “paper leases.”
Q. Over 24,000 Native Hawaiian beneficiaries are still waiting for housing and 2,000 have died while on the waitlist. You have dedicated 30 years of your life trying to solve this problem with some “out of the box thinking.” In order to provide new options, instead of the traditional one dollar 99-year lease for a plot of land, the Hawaiian Homelands Commission in 2018 amended its rules to allow DHHL to run rental properties. Are they rent-to-own and how does this work?
· La’i ’opua, Hawaii (34 single family Akau LIHTC with Option to Purchase)
· Courtyards at Waipouli in Kapaa, Kauai (purchase of existing 82 existing townhouses and awarded to Kauai residential wait listers. Awarded homestead lease with a 10 to 15 year rent to own option on the vertical construction.)
· Hale O Moiliili (23 story high-rise of affordable rental 271 condo units and 7 townhouses - to be built on Bowl-o-Drome site) – HUD’s initial concern that demand from beneficiaries may fall short and idea of allowing nonbeneficiaries to participate which could run into breach of trust problems but resolved. Over 11,400 Oahu residential wait listers. And over 13,000 backup outer island wait listers.
· Kupuna Housing - Kalamaula, Molokai and Waianae Comp kupuna housing with Lunalilo Homes
· ADU’s and Supplemental Rental Units
Q. What are your plans to develop single family homes and what kind of challenges are you facing?
· Kauluokahai, Kapolei, Oahu 700 SF
· Kaupea, Kapolei, Oahu 60 SF
· Ewa Beach (220 single family residential) – had to revise plan due to sea level rise
· Villages of Leiali’i (Lahaina) (second phase of 181 units - $376,000 per lot infrastructure cost
· Puuhona, Maui – 161 SF
· Wailuku Sindle Family 207
· Waiehu Mauka, Maui 311SF
· Honokowai – 50 Subsistence Ag
· Kamalani, Maui 400 SF
· Lanai – 75 SF
· Hanapepe, Kauai 82 SF
· Anahola, Kauai 115 Pastoral
· Lihue, Kauai – 1000 SF & 100 Subsistent Ag
Q. You recently granted 68 subsistence-ag lots on the Big Island and plan to award more of them. What are agricultural lots and why haven’t more of them been awarded since the late 1980’s?
Subsistence-ag lots are less than three acres in size and near existing infrastructure. This homestead model allows beneficiaries to live and grow food on their lots for home consumption or small-scale economic agricultural activity. Beneficiaries who opt to grow produce and other crops commercially must create a farm plan, like a business plan, as part of their lease, and lessees must cultivate at least two-thirds of the land with both lot types, beneficiaries have the option of constructing a single-family home or supplemental dwelling unit. Since there are no requirements to build a house, there are no financial qualification requirements; this means the department can get beneficiaries on the land faster. An additional 40 subsistence agricultural lots are slated for development in Honomū within the next two years.
Q. Can you explain how you are using zoning exemptions and “in-house” building permit approval to expedite the building process?
DHHL is not subject to County permitting requirements. Therefore, we are in the process of developing our own in-house permitting system to avoid the long delays caused by the counties requiring zoning review/approval before a building permit can be issued. DHHL will review and approve the zoning requirements for its “in-house” building permits. Because DHHL is required to meet all Federal and State laws especially ones to the protection of the environment, the “in-house” building permit process will address those concerns. DHHL is committed to building communities for its “beneficiaries” which are sustainable and “smart”. As DHHL permitting will not be subject to the County’s zoning review requirements, many of which are intended to protect the environment, DHHL will be subject to the zoning processes which each of the counties have created to regulate those issues but do it in house. The elimination of that portion of the County permitting process will greatly reduce the permitting processing time.
Q. What are “paper leases” and how will they help beneficiaries pass property down to their heirs?
“Paper leases” are actual homestead leases issued to beneficiaries coming off the wait lists. They can be a residential, pastoral, or agricultural homestead lease. They are awarded for specific projects the DHHL is designing, building and issuing homestead leases in the coming years under Act 279 ($600 million 2022 legislative award). They are not for specific parcels within the projects, but for the project as a whole. Should the recipient die before the Project is built, this allows the recipient to pass his lease on to his designated successor who need only be 25% Hawaiian, unlike an applicant on the wait list who can only pass on “his place” on the wait list who is 50% Hawaiian. As the project moves through the development process, relative and reflective of the makeup of the paper lease awardees, the Developer will create various categories that address the specific economic status of the various paper lessees. Those that want to build their own houses will receive a finished lot. Those that want to contribute “sweat equity” and build their own lots with a self-help contractor such as Habitat for Humanity, will participate in that program assuming they qualify based on their income. Those that are under 60% Area Median Income may, if they desire, participate in the Low-Income Tax Credit with Option to Purchase program. They will receive a paper lease which is separate from the financing package cover the vertical construction of their house, which has a 15-year compliance period. And finally, those that qualify for one of the loan programs will participate in the turn-key housing program.
Q. How successful have you been in acquiring funding and what more do you need?
A constant battle. Working with federal, state and county governments. With our long wait lists, which will grow, DHHL needs another $5.5 billion to eliminate the wait list.
To learn more about this subject, tune into this video podcast.
Disclaimer: this material is intended for informational purposes only and does not constitute legal advice. The law varies by jurisdiction and is constantly changing. For legal advice, you should consult a lawyer that can apply the appropriate law to the facts in your case.