Building For The Future

State Department of Hawaiian Home Lands director Kali Watson. Photo by Lawrence Tabudlo

State Department of Hawaiian Home Lands director Kali Watson is leading a multi-pronged effort to address the waitlist.

By his own account, Kali Watson was happy as a developer. Through his nonprofit, Hawaiian Community Development Board, he and his team helped build affordable housing units on O‘ahu, Maui and Kaua‘i, including a transitional living shelter in Wai‘anae and a village center in Nānākuli.

That village center, put up with guidance from the Nānākuli Hawaiian Homestead Community on state Department of Hawaiian Home Lands leasehold, included a 48-unit affordable rental housing complex, a satellite health clinic, a dialysis center, a multipurpose learning hub run by Kamehameha Schools and a shopping center anchored by a Longs Drugs.

“I remember going to the Fresenius (Kidney Care) Clinic when they had the dedication and you had people coming up crying, saying, ‘You changed my life, you saved my husband’s life,’” he says. “That kind of immediate impact, just by having a renal clinic in the community, and very accessible, was nice.”

HCDB went on to partner with private developers to build condos and townhouses in communities outside Hawaiian Homesteads — for example, as part of Ho‘okahua Development LLC, the nonprofit built Hale Makana O Mō‘il‘ili in Honolulu — but its goal remained the same: to strengthen Hawaiian communities through comprehensive development projects, according to its mission statement.

In a way, Watson was continuing to do in the private sector what he had set out to do as director of DHHL from 1995 to 1998 under then-Gov. Ben Cayetano: find ways to house and uplift Native Hawaiians.

“I continued to have a desire to help Native Hawaiians,” the Kamehameha Schools graduate says. “That’s why we called it Hawaiian Community Development Board.”

He would probably still be doing that today had the state Legislature confirmed Ikaika Anderson, Gov. Josh Green’s first pick to lead DHHL and chair the Hawaiian Homesteads Commission.

Instead, after a contentious, hours-long hearing in which his appointment was rejected by the state Senate Hawaiian Affairs Committee, Anderson acknowledged he did not have the support to pass a full Senate vote and withdrew his bid.

As Watson — who has said he believed Anderson could have done the job had he been given the chance — watched that hearing, he recalls feeling disappointed.

“The focus became on the person versus the program and that’s not how it should be,” he says.

But his mind also went to more practical matters. The state Legislature had recently passed Act 279 and set aside a historic allocation for a multi-pronged approach to address the Hawaiian Home Lands waitlist, which currently stands at more than 29,000 people.

“We got $600 million, let’s figure out how to spend it,” Watson recalls thinking. “The $600 million should be the focus.”

Especially since Act 279 decreed that if the money wasn’t spent, it would go back to the state’s general fund.

“So, with my experience, as well as my understanding of politics, to a certain extent, and how debilitating it can be as it relates to the program, I thought it was very, very important that I do step up,” he says.

Watson became Green’s second choice to lead DHHL and HHC in February 2023 and was confirmed by the state Senate last May.

Now, a year later, nearly all of the $600 million allocated by Act 279 has been spoken for — housing developments are underway, new lands acquired — and Watson has his eye on other ways to address the waitlist.

These include alternative categories such as kūpuna housing, transitional housing, rent-to-own options, additional dwelling units and sweat equity (Habitat for Humanity homes).

“Normally, DHHL requires (those on the waitlist, who must be at least 50% Native Hawaiian) to prequalify for a loan and these loans are $400,000 to $500,000 for the vertical construction,” he says, noting that DHHL covers the cost of the infrastructure and leases the land to homesteaders for a dollar a year for 99 years. “That’s extremely high for most of the people on our waitlist because most of them are kūpuna … and most of them are lower income. So, we’ve kind of revised our approach.”

To pay for these alternative housing categories, which are not necessarily covered by Act 279, he has embarked on an aggressive campaign to secure more federal funding.

“We’ve put together, in the year that I’ve been here, a team to go after all this other funding, primarily federal,” he says. “There’s a lot out there. There’s Environmental Protection Agency, Housing and Urban Development, Department of Transportation — all of these different entities that have federal funds that are just sitting there.”

For instance, he says DHHL had been getting about $2 million in annual funding from the Native American Housing Assistance and Self-Determination Act, which is available to federally recognized Native peoples, including Native Hawaiians.

“But now we’re starting to move,” he notes. “(U.S. Sen. Brian Schatz) got us $22.3 million (in NAHASDA funding) in the past two years. That’s $16 million more just from that one funding source.”

“The goal is to avoid bypassing anyone on the waitlist, which we’ve done historically, unfortunately, and the Kalima case is reflective of that,” he says, referring to the class-action lawsuit filed in 1999 by more than 2,000 wait-listers alleging breach of trust by the state.

A settlement was reached in 2022, and the state agreed to pay $328 million. Those payments began going out last year, but by then, at least a third of the plaintiffs had passed away; their portion now goes to their surviving family members.

It’s a sad irony: Those already left on standby for so long, who were compelled to sue, died while waiting for a resolution to their case. It also speaks to the need for action.

“So, we’re not only trying to create these new (housing) categories, we’re trying to move developments along a lot quicker,” Watson says. “That’s where my development experience comes in. So, we’re trying to do large developments rather than (doing it) piecemeal.

“For example, our Ka‘uluokaha‘i project (in East Kapolei) had four parcels that were supposed to be independently developed, first with infrastructure, then housing. What we’ve done is combine all of them, roughly 700 single-family units, and we’ve recently awarded the development to Gentry.”

In another bid to potentially speed things along, Watson says he’s brought on board Timothy Hiu, former deputy director of the city’s Department of Planning and Permitting, to create a third-party permit review process for DHHL.

He’d also like to update the department’s in-house computer system.

“Salesforce is a good example,” he says, referring to the customer relationship management platform. “Something that would be a great tool in keeping and connecting all the different divisions within the program so that we operate more efficiently and be more responsive to the needs of our beneficiaries.”

If this sounds like an ambitious undertaking for a department long plagued with underfunding and delays, Watson nonetheless comes across as optimistic. In fact, he anticipates that as DHHL makes progress, more people will sign up for leaseholds — and that’s a good thing.

“I want other people out there who aren’t on the waitlist to sign up,” he says. “There are a lot of people who are qualified, but they haven’t signed up. The first time (I was director) there were about 3,000 on the waitlist and we did around 3,100 units and I thought, ‘Oh, we got rid of the waitlist.’ But there was 7,000 on the waitlist when I left. So, I anticipate that’s what’s going to happen (this time).

“I think beneficiaries out there need to get ready because there’s a lot of activity that’s going to be happening. Especially those on the continent. We’d like to welcome them back.”

While he acknowledges what he calls the DHHL’s sad history — “The majority of (our) lands are in very isolated areas, less desirable areas with little in infrastructure or no infrastructure” — he says steps have been taken to acquire land with better access to roads, utilities, mass transit and job sites.

“If you go through the list of our projects under the (Act 279) strategic plan as well as the additional projects, it becomes clear that we’re in a better position to address the issues regarding our waitlist,” he says.

He’s also pleased to see that since his first stint as DHHL director, Hawaiian Homestead communities have taken the initiative to develop their leaseholds.

“We recently dedicated the Ho‘omaka Marketplace right here next to (the DHHL) building with the Chick-fil-A, the Longs, the 7-Eleven and the Hele gas station,” he says. “That was a collection of homestead associations right here in Kapolei. They got together and they created a community development corporation … (and) they were able to get that up.”

He says revenue generated by the marketplace benefits the homestead communities.

Still, not everyone is convinced. At his confirmation hearing before the state Senate Committee on Hawaiian Affairs last year, some expressed concern that his background as a developer would present a conflict of interest.

Watson, who stepped down from HCDB and affiliated development firms, says he would recuse himself from any DHHL and HHS decisions that presented a conflict of interest. He acknowledges his background — which he sees as a positive — would not sit well with everyone.

“A lot of people think developers are bad guys,” he says. “But there are a lot of good, honest and decent developers that want to help.”
Ultimately, he says he knows his success depends on what he’s able to deliver.

“We gotta show the results and make the awards,” he says. “People become encouraged when they get a lease and see things getting built.”