Hawaiian Homes Commission approves expanded project leases; beneficiaries, commissioners seek clarity on undivided-interest rights

The Hawaiian Homes Commission on Molokaʻi approved a change in how the Department of Hawaiian Home Lands (DHHL) issues project leases, moving to issue additional undivided-interest project leases to beneficiaries and to prioritize getting more people off the waiting list.

DHHL acting administrator Kalani Frond and housing staff described the change as a shift away from bypassing applicants who previously could not qualify and toward issuing more project leases that the department says will help families secure a pathway to a home. The commission approved the proposal by voice vote.

Why it matters: The commission and beneficiaries emphasized that the change affects who gets first access to limited lots, how those project leases can be transferred, and whether recipients will receive full homestead parcels. Commissioners also pressed staff for a clear, written explanation of conditions attached to the undivided-interest project leases so beneficiaries understand rights and obligations before accepting them.

What DHHL said - DHHL staff described the issuance as a deliberate policy change to reduce bypassing on the wait list and to provide more beneficiaries—on Oʻahu and other islands—opportunities to receive a lease. Staff asked commissioners to approve the approach to send “a statement” to beneficiaries in Hawaiʻi and the Mainland that DHHL will issue more project leases and support recipients through the process. - Acting administrator Kalani Frond and project staff said the project leases will be 99-year homestead leases. Staff repeatedly stated that the project lease itself is not typically revoked; rather, recipients must meet program requirements (workshops, loan qualification, sweat equity for Habitat-style projects, or other program conditions) to receive a parcel award. If a recipient fails to fulfill the requirements by the applicable deadline, the record shows the recipient typically does not receive a parcel though the project lease document itself remains in effect. - Staff said recipients who receive the undivided-interest project lease can transfer it; under the project-lease rules and practice cited in the meeting, the lease secures successors’ ability to receive consideration even if a successor’s Hawaiian ancestry is 25 percent rather than 50 percent, which was a historic limitation for some categories of awards. - DHHL staff also said the department is implementing a Salesforce case-management tool to expedite processing and that it is seeking legislative funding to fill 19 authorized positions (staff have been authorized but not funded for more than five years). Staff reported a positive reception at the Legislature and that some funding appears likely.

Questions from commissioners and public comment - Commissioner Neves asked multiple questions about undivided-interest leases: whether the leases remove applicants from wait lists, whether an undivided-interest lease is perpetual, and what happens if a particular project exhausts its lots while some undivided-interest lessees remain. DHHL replied the lease term is 99 years and that, administratively, undivided-interest holders in built-out projects have been offered the opportunity to transfer into other DHHL projects; when transferred, those holders are “blended” into the applicant list according to original application date. - A deputy attorney general in the meeting confirmed that the department typically treats the project lease as a continuing right to be merged into future project allocations, but warned that receiving a project lease does not guarantee a parcel award; recipients must meet program-specific requirements (loan documents, workshops, certification, inspections) to proceed to an actual parcel award. - Public commenter Kainoa McDonald asked directly about leaseholder rights and documentation, saying: “Once the lease is issued, do the leaseholders, essentially retain that in perpetuity?” DHHL staff replied that the project lease does not typically include language that would automatically trigger revocation but that recipients must still do the required steps (workshops, loan applications, certification) to obtain a parcel.

Implementation and next steps - Staff said recent events—project-lease award ceremonies and use of Salesforce during awards—have already sped processing and that DHHL will provide fact sheets and FAQs to clarify options: rescission/amendment of a project lease to attach it to a specific parcel, transferability, and how recipients can relinquish a project lease to pursue a privately listed homestead home instead. - Commissioners asked staff to circulate the project-lease document and a clear, plain-language fact sheet explaining: (1) the 99-year term, (2) transferability and successor rules (including the 25% successor allowance referenced by staff), (3) the difference between holding a project lease and receiving a homestead parcel, and (4) the administrative process if a project fills and a holder must be blended into another project list.

Ending DHHL staff and commissioners agreed to follow up with written materials and outreach at district offices. Staff said they will return to the commission with any needed clarifications about how undivided-interest project leases will be administered in projects that reach capacity.