DHHL Responses To Additional Star-Advertiser Questions

Posted on Oct 13, 2013 in Community News, Department of Hawaiian Home Lands, Homestead Services Division, News Releases, Public Information, Public Notice, Slider

In order to provide better context to today’s Sunday Honolulu Star-Advertiser story, here are our more detailed answers to follow-up questions posed by writer Rob Perez, before the article ran. Here is a link to the first set of questions we answered for Perez on Fri., Oct. 11.

Star-Advertiser, Sunday, October 13, 2013

I got your responses, and I have some follow-up questions. I’m especially interested in getting clarification on when DHHL boards up a home.

You indicated that only one of the 12 addresses (not including the Anahola property) that I sent you is under DHHL inventory for re-award. The one for re-award is in Waimanalo. Yet all four of the Waianae homes I listed were boarded up by DHHL, with DHHL signs warning people to keep out.

Within the department’s database, the 11 properties are coded as being attached to a lease.

Why would DHHL board up a home that is, as you indicated, under an active homestead lease?

With respect to the four Waianae homes, I need to further follow up with staff to clarify our responses before responding

The department is called in to board up homes for several reasons which include:

1. Eviction after a lease cancellation, after the former lessee and the family are legally removed, the home is secured, locks changed and then boarded up for security purposes.  It is then turned over to the department’s Homestead Services Division (HSD) to do the follow up appraisals, termite inspections and survey.  The department’s role is strictly to remove the “warm” bodies from the home and to secure the premises after due process to protect lessee’s rights have been completed.

2. When a home is abandoned and the department is notified, DHHL will go out to secure the home and turn it over to HSD for processing.  It has also been found that some lessees board up their own home for a variety of reasons.  If the department is made aware of an abandonment situation like this a report is generated and turned over to HSD.

The award or re-award of an authorization “to lease to native Hawaiians the right to the use and occupancy of a tract or tracts of Hawaiian home lands”, whether through vacant lot, self help build, sweat equity or turnkey home and lot offering, is strictly governed by the Hawaiian Homes Commission Act, Hawaii Revised Statutes, and the Hawaii Administrative Rules as it applies to the Department of Hawaiian Home Lands.

These specific governance documents and guidance can be found in HHCA Sec 207, 208, 209, and 210 and Hawaii Administrative Rules Sections 10-3-2, 10-3-8,10-3-21, 10-3-22, 10-3-23, 10-3-28, 10-3-34, 10-3-36, 10-3-39, 10-3-61 thru 67.

HHCA Section 207 gives the Department of Hawaiian Home Lands the authority “to lease to native Hawaiians the right to the use and occupancy of a tract or tracts of Hawaiian home lands”.  It also states that “the title to lands so leased shall remain in the State”, and that “the department shall, whenever tracts are available, enter into such a lease with any applicant, who, in the opinion of the department, is qualified to perform the conditions of such lease.”

HHCA Section 209 provides a lessee a right to net proceeds, if any, once the home is sold and transferred to another private property owner regardless whether it occurred through a lease being cancelled, surrendered or abandoned.

And are those four boarded-up homes in Waianae part of the 14 you indicated that DHHL has boarded up over the last several years? Or would they not be included in the 14 because they are under active leases?

With respect to the four Waianae homes, I need to further follow up with staff to clarify our responses before responding

Also, you didn’t answer question No. 4 on whether there have been homes unoccupied for 10 years or more?

When it comes to the re-award of a homestead lease with an existing structure, DHHL does it best to match up interested qualified waitlist applicants with leases.

Qualified waitlist applicants choose between new offerings by the department and an “as is” re-award based on appraised value.  Upon re-award per HHCA 209 the prior lessee may be paid the appraised value minus any indebtedness owed to the department.

If they have been unoccupied for some time, it is due to the challenge we outlined for you in No. 5.

There are challenges getting qualified buyers to purchase previously owned homes. Often times those that can qualify financially want a new home and those that want a previously owned home cannot qualify for a loan.  Location can also be a factor if the home is not located in an area the applicant wants to reside.  The condition of the home also plays a factor.

No. 12 on what is the current total of unencumbered NAHASDA money and why so much is unencumbered.

For comparative purposes, please see the table below:

As of December 19, 2012:

HUD Grant #           LOCCS Cash Balance          Less: Encumbered Contracts          Unencumbered Cash

08HBGHI0002                   4,043,433                                (4,043,433)                                    0

09HBGHI0001                   9,376,308                                (   281,804)                              9,094,504

10HBGHI0001                 12,700,000                                (   328,850)                            12,371,150

11HBGHI0001                 12,674,600                                        0                                     12,674,600

12HBGHI0001                 12,700,000                                        0                                     12,700,000

Total:                              $51,494,341                                (4,654,087)                           $46,840,254

As of October 9, 2013:

HUD Grant #           LOCCS Cash Balance          Less: Encumbered Contracts          Unencumbered Cash

08HBGHI0002                    1,672,821                               (1,672,821)                                    0

09HBGHI0001                    9,056,056                               (9,056,056)                                    0

10HBGHI0001                  12,700,000                                      0                                       12,700,000

11HBGHI0001                  12,674,600                                      0                                       12,674,600

12HBGHI0001                            0                                            0                                       12,700,000

*13HBGHI0001                          0                                            0                                       12,700,000

Total:                                $36,103,477                             (10,728,877)                          $50,774,600

The DHHL has received approval from HUD to invest $25,400,000 of FY 12 & FY 13 NAHASDA monies for two years, removing those totals from the LOCCS Cash Balance account.  As of this fiscal year, the DHHL is expected to expend the $10 million in encumbrances; encumber another $9 million for infrastructure development on Oahu; and has budgeted $11 million for interim construction financing of homes for NAHASDA eligible families (117 units).  Please be aware that home repair loans do not count as encumbered/obligated until the funds are set aside in escrow and HUD does not count the funds expended until the loan closes.  This is true for all NAHASDA loans, whether home loans or home repair loans.  For your reference the budget totals, by NAHASDA activities, are below:

*PY 2009 – 2012 TOTALS

Category                                        Budgeted Amt                  Housing Plan Goal

Development/Infrastructure            $26,089,400                                 1

Loan Programs                                 $ 7,280,000                                2, 3, & 4

Grants/Subsidies                              $ 7,000,000                                 2, 3, 4, & 5

Housing Services                             $ 3,730,000                                 2, 3, 4 & 5

Crime Prevention/Safety                  $   175,000                                 4, 5 & 6

Model Activities                               $   835,000                                 4, 5 & 6

Admin/Planning                               $ 4,925,089                                6, 7 & 8

TOTAL:                  $50,034,489

*Does not include 13HBGHI0001 housing plan activities

In the response to No. 10, does the $10 billion refer to the local need for housing for NAHASDA-eligible applicants?

Yes, the need is calculated in the NHHP of potential applicants and current wait list applicants times the average cost of a Oahu home (Approximately $300k).