Homes for future homesteaders on the rise at Kānehili in East Kapolei, O'ahu. The state Department of Hawaiian Home Lands, with OHA's financial support, issued $42.5 in revenue bonds in March, will pump millions into housing construction statewide. - Photos: Courtesy of DHHL

DHHL pumping $42.5 million into economy
With OHA's help, more homes, jobs coming

By Lisa Asato / Ka Wai Ola

More homes for Hawaiians will be built, more construction jobs will be created and more money will be pumped into the state economy now that the state Department of Hawaiian Home Lands has issued $42.5 million in bonds with the help of OHA.

"These funds will go directly into helping build homes for native Hawaiians, but also help the state by infusing money into our economy now," said DHHL Director Micah Kane. "On average this could mean 300 to 400 homes for native Hawaiians, jobs for our construction industry and related services and another boost to economic recovery for the state."

With projects ongoing on all islands, Kane said the "impact is statewide."

"We are beginning to build the first homes in our 400-lot Kānehili subdivision and soon in the 181-lot Pi'ilani Mai Ke Kai subdivision in Kaua'i. Within a year we expect to begin building the first homes in the 205-lot East Kapolei II subdivision, the 300 lots of Villages 4 and 5 in La'i'ōpua on the Big Island, and the 392-lot Kēōkea/Waiohuli subdivision on Maui."

The $42.5 million infusion comes at a time when 40 percent – or 3,000 members – of the 8,000-member Hawai'i Carpenters Union are out of work because of the recession, said Kyle Chock, executive director of Pacific Resource Partnership, a joint program of management and labor that includes the carpenters union and Hawai'i's unionized contractors.

"We have a lot of unemployed carpenters right now," Chock said, adding that any infusion of capital or bonding that would create jobs "is a direct shot in the arms to Hawai'i's construction industry."

He said the partnership between DHHL and OHA is not only building more homes for Hawaiians, but is also benefitting the construction industry, which is largely comprised of Native Hawaiians.

Homes for future homesteaders on the rise at Kānehili in East Kapolei, O'ahu. Here, workers lay the foundation for a home. - Photos: Courtesy of DHHL

The OHA Board of Trustees approved last year a payment of $3 million a year to cover debt service for 30 years. "Our partnership with DHHL will provide a sound base for enabling Native Hawaiian families to improve their lives, provide employment for many and strengthen the economy during challenging times," said Haunani Apoliona, OHA Chairperson. "We are pleased to join with DHHL in making a difference for all Hawai'i nei."

This was the inaugural issue of DHHL's new revenue bond program authorized in 2008 by state lawmakers, allowing it to issue up to $100 million dollars in revenue bonds.

The bonds will be used for construction projects statewide, including infrastructure to build more homes and $5 million to fund planning, design and feasibility studies for community-driven projects in the 18 DHHL developmental regions across the Islands, DHHL said. "Self-sufficiency for DHHL extends to our communities and we are working to raise the level of homestead organizations so they can manage property for their own income generation," Kane said.

DHHL was able to get more money for its bond sale because it sold the bonds at a 5.97 percent average interest rate, lower than the more than 6 percent rate of late 2008. Another plus for the department was its high financial ratings – which also resulted in more money for the department. Leadings rating agencies Moody's assigned it an A2 rating and Fitch assigned it an A- rating.

"The high ratings shows the confidence financial rating companies have in DHHL and what they have been able to accomplish," said Gov. Linda Lingle. "DHHL continues to be an asset to native Hawaiians as well as the greater community.

Kane said the role that DHHL can play in the state's economy is not an unintended benefit to the state but rather "a planned and welcomed result."

"We have always believed that helping native Hawaiians is good for the entire state," he said. "We also believe our developments can be a bridge from a down economy to a recovering economy."

"The infusion of money into the construction of affordable homes is great for the construction industry and the economy. It also fulfills our mission to build much-needed affordable homes for native Hawaiians and that is an opportunity we pursue with a passion."