Photo: An aerial view of HCDB’s Hale Makana O Nānākuli

Photo: Patti Barbee and Kali Watson
Patti Barbee and Kali Watson. – Photo: Courtesy

Kali Watson and Patti Barbee share an extraordinary vision for getting Hawaiians into housing, and together they are making it happen. Watson and Barbee operate the Hawaiian Community Development Board (HCDB), with Watson, HCDB’s founder, serving as President and CEO, and Barbee serving as Senior Vice President.

Unlike most development firms, HCDB is a non-profit 501(c)(3) organization specializing in developing projects to provide low-income families with affordable housing. Notably, HCDB is the only existing Native Hawaiian owned and operated non-profit development firm building low-income rental housing. Although some of their projects are not exclusively for Hawaiians, serving the Native Hawaiian community is their passion and focus. Incorporated in 2000, HCDB is governed by a seven-member Board of Directors, all of whom are Native Hawaiian, and the majority of whom are Department of Hawaiian Home Land beneficiaries and leaders in their respective communities.

To achieve their prime objective of providing Native Hawaiian families with affordable housing, HCDB actively partners with DHHL and Hawaiian Homes community associations to develop alternative housing solutions on DHHL land. “After leaving DHHL I had a better understanding of the challenges,” said Watson. Referring to the Hawaiian community Watson notes, “our biggest need is housing. There are 28,000 Hawaiians on the (DHHL) waiting list. And a third of the homeless in Hawaiʻi are Native Hawaiian.”

An attorney and businessman, Watson served as DHHL Director from 1995-1998. During his tenure, Watson was instrumental in the passage of Act 14, a $600 million settlement between the State and DHHL which included transfer of 16,518 acres of State lands to DHHL, as well as the transfer of over 900 acres of Federal lands under the Hawaiian Homes Recovery Act of 1995. When he left DHHL he decided to continue to focus all of his energies on the housing issue.

It was during his time at DHHL that Watson met Barbee who was working for the Office of Hawaiian Affairs as the Housing and Community Development Supervisor and developing strategies to address the Native Hawaiian housing crisis. Barbee’s housing strategies at OHA in the 1990s included creation of a $103 million revolving down payment loan fund and programs to expand OHA’s participation with Habitat for Humanity projects statewide. Working together in their respective capacities, Barbee and Watson discovered they were on the same page in thinking that the best solution to address the Native Hawaiian housing crisis as quickly and efficiently as possible was to provide affordable rentals and rent-to-own opportunities. This was the genesis of HCDB.

“The way to impact the Hawaiian community the most is to provide affordable rental housing,” said Barbee. In addition to seeing affordable rentals and rent-to-own developments as key, the other strategy Watson and Barbee are trying to advance is creating housing density, especially on Oʻahu, where the population is large and the land resources finite.

This vision has met with some resistance, particularly for their development projects on DHHL land. Creating high-density rental units on homestead land has never been done before, so HCDB’s approach represents a significant change to how DHHL lands have historically been developed. “We need to get away from looking exclusively at single-family home residential development,” Watson insists. “We need condos and townhouses. Creating housing density is key to serving more Native Hawaiians.”

Adds Barbee, “It’s about changing mindsets. Everyone wants a single-family home. It’s the dream. But the reality is that purchasing or building a home is beyond the reach of many of our people. If we can provide more affordable rentals, it’s a stepping stone that can stabilize a family so that they can save and get their credit in order, so when their name comes up for their homestead they will be ready. It’s not a cure for all. It’s one of many strategies that need to be implemented.”

Watson credits current DHHL Director William Aila for his willingness to “think outside the box” to move these unconventional housing projects forward. Watson and Barbee are especially proud of their 48-unit Hale Makana O Nānākuli affordable rental housing project which opened in 2013, and the adjacent commercial and medical facilities, part of the Nānākuli Village Center, a related pilot project, the final phase of which will be completed in April.

Photo: Hale Makana O Nanakuli
The Hale Makana O Nānākuli townhomes are lovingly designed to be attractive family dwellings that anyone would be proud to call home. (Below) HCDB projects are distinctive in that high-end interior finishes like solid wood cabinetry and granite countertops are standard. – Photo: Courtesy

The Hale Makana O Nānākuli housing project was essentially a response to concerns raised by the community about overcrowded households and dilapidated homes, and the general lack of affordable housing in the area. Development of the project was a kākou effort. For example, Hawaiian Community Assets (HCA) and U.H. West Oʻahu provided financial counseling to Nānākuli homestead residents to help families prepare for and meet the qualifying criteria, and to complete the rental applications. As a result, 75% of the current tenants were already residents of the Nānākuli Homestead community.

Families who become residents of Hale Makana O Nānākuli who are on, or can qualify for, Hawaiian Homelands also receive additional financial counseling from HCA to help them qualify for a future mortgage and residential lease on DHHL land.

Hale Makana O Nānākuli also serves as a pilot project to demonstrate how DHHL Homestead Associations can empower themselves to build similar affordable rental housing projects within their communities using established design, funding and construction approaches. It provides a successful “working model” for future housing developments on DHHL land.

“The (related) Nānākuli Village project was the game-changer,” reflects Watson. “It was born from the vision of the Nānākuli homestead community and from leaders like Mike Kahikina and Kamaki Kanahele. This project is an example of what can be done in the Hawaiian community, and that’s exciting!”

“Nānākuli Village has all the elements for community living and housing,” Watson explains. The project includes a Waiʻanae Coast Comprehensive satellite health clinic, a renal clinic, an affordable drug pharmacy and a commercial center which includes Longs Drugs and smaller tenants like Starbucks, L&L Drive-in and Kainalu Surf Shop. The final phase of the Nānākuli Village Center is the Kalanihoʻokaha Learning Center, which is being developed and built by Kamehameha Schools. Nānākuli Village is also in close proximity to Nānāikapono Elementary School, Ka Waihona Charter School, and the Nānākuli YET Boys & Girls Club. The Nānākuli Village project brought together HCDB, DHHL, the Nānākuli Hawaiian Homestead Community Association, Kamehameha Schools and the Waiʻanae Comprehensive Health Center. “Working together we were able to gather the resources to do the kind of development that addresses other needs of the Hawaiian community – not just housing,” said Watson. “It’s a vision that has become a reality. We are a lot stronger working as a group.”

Watson envisions more of these projects in the future and believes that Hawaiian organizations joining forces and working together would be a powerful force to replicate communities like Nānākuli. Referring to HCDB, Watson says, “We’re kind of like the quarterback working with all of these organizations to get these projects going. We know how to get developments done. And we work with (DHHL) beneficiaries and get them intimately involved in the projects, advocating for support and funding.”

Knowing how to access funds to finance development projects is key. Watson says land belonging to Aliʻi Trusts, DHHL and OHA that could be productive is sitting vacant due to a lack of “developer mentality.” He acknowledges that development projects are expensive but is confident that “they can be done if you know how to access funds.”

At HCDB, raising capital for developments is primarily Barbee’s kuleana. With an extensive background in business management that includes training in real estate, appraisal, mortgage financing and government procurement, over the years Barbee has successfully secured tens of millions of dollars for affordable housing developments for Native Hawaiians from a variety of county, state and federal government sources including Rental Housing Revolving Funds, Federal Home Land Bank AHP, National Housing Trust Fund and from the Native American Housing Assistance and Self Determination Act, a program funded through the U.S. Department of Housing and Urban Development.

In addition to Hale Makana O Nānākuli, HCDB has completed affordable rental housing projects in Kewalo and Hālawa, and are currently working on a $62 million highrise project in Kapolei. In addition, they’ve been approved to begin developments in Mōʻiliʻili for a $31 million 105 unit kūpuna project, a $130 million two tower project in Hālawa, and they are currently negotiating kūpuna projects in Papakōlea and Waiʻanae Kai. They are also working on a new project, Ulu Ke Kukui, also in Māʻili on DHHL lands. Currently a transitional shelter, HCDB is taking over the lease and will turn it into another long-term rental project for DHHL with 40 two-bed/two-bath 900 square foot units.

HCDB’s current Hale Makana O Māʻili project, now under construction, is similar to their Hale Makana O Nānākuli. It is a 52-unit multi-family affordable rental housing development on just under two acres of land. This $22 million dollar project will include a perimeter fence, resident parking, a private central park (shared open space), and a resource center that will include a library and computer center, two multi-purpose rooms and laundry facilities.

Although HCDB is in the business of developing affordable housing, Watson emphasizes that they are not a public housing entity. Quality materials and worksmanship are standard with their private affordable housing projects. Says Watson, “It is a requirement of our funders that these developments are attractive, well-maintained and professionally managed.”

“We want to create places where people will be proud to live,” Barbee emphasized. Hale Makana O Nānākuli has one, two and three-bedroom units ranging from 550 to 1,100 square feet. The units are built to last with high-end finishes like laminate wood flooring, solid-wood cabinetry, granite countertops and stainless steel appliances.

Applying and qualifying for an affordable rental unit in one of HCDB’s projects varies. Once a project is completed, the properties are managed by outside firms. Because the projects serve low-income renters, they are for families whose household income level is 30-60% of the Area Median Income (AMI). For projects on DHHL land, preference is given to Native Hawaiians to the extent permitted by law.

In their quest to realize their primary goal of providing housing for Native Hawaiians, Watson and Barbee strongly prefer to build their projects on DHHL land. Says Watson, “DHHL has $100 million in the bank and 200,000 acres of unused land. But their internal ability to develop the land is limited. They need the involvement of private developers with the beneficiaries’ interests as their priority.”

According to Watson, development on DHHL land is ideal for four key reasons: 1) DHHL land already has “entitlements” which are legal rights conveyed by approvals from government entities to develop a property for specific uses; 2) DHHL lands are made available for development at no cost to the developer, so there are no financial hurdles and/or land costs which ultimately drives up rental costs for the tenants; 3) DHHL has the ability to finance projects through organizations like HCDB and; 4) As a government entity DHHL can exempt itself from some development restrictions so there are fewer delays in the permitting process.

Watson would like to see future partnerships where DHHL, OHA and the Aliʻi Trusts work together with developers like HCDB to create more communities like Hale Makana O Nānākuli. “Our Aliʻi Trusts joining forces to create these communities would be powerful,” predicts Watson. “If our organizations could work together we could collectively become the biggest developer in the state.”

As enthusiastic as Watson and Barbee are about sharing their vision of housing density and affordable rental housing to address the housing crisis affecting so many Native Hawaiians, as Hawaiians themselves they approach each project, and each community, with great deference. Working with each community is key. It is important that the projects they build “fit” the community. “We do this because we believe that development can be done in a pono way,” shares Barbee. “We work with DHHL and with beneficiaries to determine what is best for them. Making a profit is not our priority.”

As Native Hawaiian developers, HCDB has adopted a higher standard when it comes to approaching the environment and the historic significance of the area they are developing. ʻIke Hawaiʻi is important and, with this in mind, where possible they try to hire Hawaiians to complete the required cultural and archaeological impact statements.

Says Barbee, “I’m originally from Molokaʻi so I know it’s important not to build in someplace we aren’t supposed to be. Over the years we’ve done a lot of the environmental impact pieces. And we blessed the heck out of Nānākuli.”

HCDB’s pono approach to development is refreshing in a world that far too often places profit over people, culture and the environment.

Contemplating his vision for Hawaiian-serving public and private organizations to join forces to solve the housing crisis, Watson shared the following ʻōlelo noʻeau: “Pūpūkāhi i holomua; Unite to move forward.”

“As Hawaiians we need to move forward and assert our rights in the development of our homeland,” states Watson. “When we address the needs of our indigenous people it benefits the entire community. We all know the negative social statistics. We can cry about it…or we can make changes. I believe we can turn things around in the next 20 years and make it exciting for Hawaiians to live here in our homeland.”