A Hawaii County Council committee last week recommended a favorable vote by the full council on a controversial resolution authorizing the Office of Housing and Community Development to lease homes it purchased with federal funds for “long-term permanent housing for underserved populations who face significant barriers to secure, safe and affordable housing.”
The Finance Committee vote on Tuesday was 7-2, with council members Michelle Galimba, James Hustace, Holeka Inaba, Jennifer Kagiwada, Heather Kimball, Dennis Onishi and Rebecca Villegas all casting yes votes.
Voting no were Finance Chairman Matt Kaneali‘i Kleinfelder — who introduced Resolution 475-26 at the request of OHCD — and Ashley Kierkiewicz, a fellow Puna council member.
At issue was granting $10 yearly leases to nonprofits for homes bought last year by OHCD using COVID-era federal emergency rental assistance funding that was set to expire if unused. One of those homes was at 76 Makani Circle in a neighborhood in Waiakea Uka. The county in October purchased the 3,000-square-foot, three-bedroom home for $809,000.
The resolution needs to be heard once by the full council for adoption. It is not yet on the agenda for a future meeting.
The resolution had been shelved twice, on March 3 and March 17, amid negative testimony, mostly from residents of Makani Circle. Tuesday’s vote came after an hour-plus executive session in which lawmakers consulted privately with Deputy Corporation Council Sylvia Wan.
Wan testified that the council is legally obliged to follow the federal Fair Housing Act during its deliberations about the properties.
“So, as far as the leases go to these particular properties, any discussions — whether granting or not granting lease — has to be free of any consideration relating to any protected classes that may or may not inhabit these particular properties,” Wan said.
Prior to casting her affirmative vote, Kagiwada said she amended the measure to take the 76 Makani Circle residence off the list based on her “conversations with the potential lessee citing they were no longer interested.” She was referring to Lester Estrella, president and CEO of Going Home Hawaii, who on March 7 withdrew his lease proposal, saying it wouldn’t work without community support.
Kierkiewicz said her no vote came “after much consideration … not because of the housing itself but because of how this was handled and the risk of exposure that it creates for the county.”
Although the Makani Circle house was taken off the list of prospective leases in the resolution, all but one of the testifiers against the resolution on Tuesday came from Makani Circle.
Grace Manipol-Larson sought an apology from county OHCD Administrator Kehaulani Costa for “purchasing those luxury homes that don’t really answer homelessness issues.”
“We can pretend not to understand a sweetheart deal of giving a $10 a year lease to a (nonprofit organization) for a million dollar house — or less than a dollar a month,” Manipol-Larson said.
She hinted at possible malfeasance in the OHCD’s Homeless and Housing Fund, which has awarded $33 million to nonprofits in three years. The council has directed the fund be audited.
“What was the result of the audit … ? The $33 million that the county funded since 2022 — where is it? How much money, really, was used for the homeless?” she queried. “… Maybe in court, we can find out how much dollars will go back into campaign (coffers) for some politicians.”
Unlike the two previous committee meetings where those who testified were overwhelmingly against the resolution, this time an almost equal number of testifiers spoke in favor of its passage, most mentioning ties to Hope Services Hawaii or Big Island Substance Abuse Council.
Kristen Alice, Hope Services spokeswoman, said that according to the U.S. Government Accountability Office, “for every $100 the median rent increases, homelessness goes up by 9%.”
“So, it should be no surprise to hear that for every person we help get into housing, another two become homeless,” Alice testified.
“We’re seeing this increase mirror what is happening across the United States. However, we know what works. The programs we have are successful, and our rate of getting people into permanent housing is pretty high. And once we do get people to go into permanent housing, they stay in at a rate of 93% — the highest across the state, and it is higher than the national average.
“… Hope Services is being considered for two of these homes, and we plan to use them to provide permanent housing to … families with minor children.”
Costa, who’s been criticized for lack of transparency about the homes and OHCD’s plans, noted the request for proposal is titled, “Providing permanent housing for underserved populations.”
“We solicited proposals from nonprofit organizations in good standing, with demonstrated experience serving underserved populations and a minimum of five years providing supportive housing services or similar residential programs,” Costa testified.
“So, while we did not specifically seek to operate group living facilities, they are allowable in residential neighborhoods per Hawaii County Code, and they are protected under the Fair Housing Act.
“OHCD was intentional in its efforts to pair subsidized housing with supportive services. This type of housing intervention benefits the individuals, public systems and community … .”
The long-term leases will be for six months or more — with the nonprofits, not the residents, as the lessees. Residents selected by a nonprofit will pay rent to that nonprofit.
Costa said she understands “the concerns but not the opposition” of those opposed to the resolution.
“If neighborhoods aren’t a place for people to live and thrive, we have a problem,” she said. “… I’m not going to try to understand where that opposition comes from. But I will say that we will manage our properties in compliance with all federal, state and county laws, including zoning. We will conduct site visits and annual compliance reviews of all of our properties, as we currently do. And we will provide departmental contact for the neighbors, if there are any concerns about these properties.”
Villegas said her yes vote was cast “in the best interest of compliance with the law and also out of respect for (OHCD) and the due diligence they’ve done.”
“While it may be perfectly imperfect, I’m going to trust on this one … ,” Villegas said.
The county-owned residential properties remaining on the resolution are:
— 73-4338 Napoo Place in Kona Palisades, bought for $1.28 million in October, with Hale Kipa the prospective lessee.
— 74-5068 Kealapua St. in Kona Chocho Estates, bought for $990,000 in October, with Mental Health Kokua the prospective lessee.
— 15-1393 29th Ave. in Hawaiian Paradise Park, bought for $530,000 in October, with Hope Services Hawaii the prospective lessee.
— 81-994 Hale Keekee Place in Kealakekua, bought for $1.25 million in October, with Mental Health Kokua the prospective lessee.
— 2089 Kinoole St. in Waiakea Homestead Houselots, bought for $860,000 in October, with Big Island Substance Abuse Council the prospective lessee.
— 16-1397 35th Ave. in Orchidland Estates, bought for $840,000 in November, with Hope Services Hawaii the prospective lessee.
Email John Burnett at john.burnett@hawaiitribune-herald.com.
