161-Lot Homestead Project in Waikapu breaks ground

Wielding koa o‘o, dignitaries break ground for the Puunani Homestead Subdivision Wednesday morning in Waikapu. The project is located on 47 acres of Hawaiian homestead land bordering the mauka side of Honoapiilani Highway. Developer Everett Dowling said he expects site work to go smoothly and to be building homes on the former sugar cane land within a year. DHHL Director Kali Watson said other projects are in the pipeline and there are plans to do “a lot more.” Hawaii Lt. Gov. Sylvia Luke said with half of all home purchases on Maui being made by foreign and Mainland buyers, this is one of the ways to ensure development benefits local residents and their families. The Maui News / MATTHEW THAYER photos

The state Department of Hawaiian Home Lands broke ground Wednesday on a $17 million project that will pave the way for 161 homestead lots in Waikapu — the first project funded through the historic $600 million that lawmakers set aside to help Native Hawaiians on the DHHL waiting list.

“A portion of that was used to fill the gap needed to make this project a reality,” Hawaiian Homes Commission Chairperson Kali Watson said at the groundbreaking ceremony, describing the project as “a vision realized.”

The Puunani Homestead project, conducted by Dowling Company Inc., will include grading, construction of roads and utility improvements for a 161-lot residential subdivision, according to a DHHL news release Wednesday. The improvements include internal roadways, potable water, sewer, drainage detention basin, utility connections and roadway frontage improvements along Honoapiilani Highway.

Construction is anticipated to be complete by the fourth quarter of 2024, with the first of 137 turn-key homes expected to be offered in the third quarter of 2025, pending the completion of an additional water tank.

According to project documents, each of the 161 lots would be about 7,500 square feet, with a minimum lot area of 6,000 square feet. The turn-key homes would feature six different model types providing three or four bedrooms and two to three baths, with living areas ranging from 1,088 to 1,674 square feet. The remaining 24 vacant, improved single-family lots would allow residents to build their own homes. Other land use in the subdivision is to be determined, DHHL said.

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The estimated cost is $72.3 million for lot development, installation of infrastructure and construction of turn-key homes, according to the project’s final environmental assessment in 2020.

“This project is the result of a 44-acre land acquisition through the transfer of affordable housing credits from the County of Maui,” Watson said in DHHL’s news release. “The Department will need to continue to explore these types of opportunities to execute on the Hawaiian Homes Commission Act’s fiduciary commitment to put Hawaiian families in homes.”

Last year, the state Legislature allocated $600 million toward addressing the needs of Native Hawaiians on the DHHL waiting list, which state officials say has grown to include more than 28,000 residents who’ve waited years for their chance at getting their families onto homestead land. Then-Gov. David Ige signed the measure into law as Act 279.

“Pu’unani Homestead is the kind of project that will get people off the wait-list — I’m glad that we have the first project to get off the drawing board in spending down the $600 million,” state Sen. Gil Keith-Agaran, whose district includes Waikapu, said via text on Wednesday. “I hope we’ll have more in Maui Nui and Chair Watson listed some of the others that may be moving forward shortly as well.”

Keith-Agaran, who serves as vice chairman of the Senate Ways and Means Committee, said that Dowling has built other homestead communities in Central Maui at Waiehu Kou, “so I’m sure they will meet the timetable to get people in homes next year.”

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“Pu’unani is in a prime location — close to shops, schools, churches and recreational areas,” he said. “Pu’unani will offer both turnkey homes (house and lot) for those who will be able to qualify for a conventional mortgage and also a number of homestead lots which will allow beneficiaries to build their own homes (or get assistance from Habitat for Humanity and other self-help housing agencies) who would not qualify for a home mortgage.”

State House Rep. Troy Hashimoto, whose district also includes Waikapu, said that the project has been in the works for awhile and that DHHL had been looking for more lands in Central Maui.

“It’s sorely needed, and I think it’s going to be something that’s going to have a lot of demand from those on the waitlist,” Hashimoto said via phone on Wednesday.

Hashimoto said that “the biggest expense for DHHL lands is that we need to invest in infrastructure,” and that the $600 million would help the department tackle multiple projects at once.

“I think this project was in the right place of the development pipeline,” he said. “But at the end of the day, it does cost money to put in sewer lines, water lines, they have to connect to the county infrastructure. We would have to pay for it anyway, but I think having this money allowed it to move quicker.”

As chairman of the House of Representatives’ Housing Committee, Hashimoto and fellow committee members will be tasked with overseeing DHHL’s spending of the $600 million. He pointed out that there is a clock on DHHL to spend the money, “so they have to be very strategic and thoughtful on how they are able to use that in that allotment of time.”

DHHL released a plan in December outlining how it proposes to use the funds. Statewide, the department plans to develop 2,727 lots, including 572 in Maui County. In addition to funding the Puunani Homestead Subdivision’s first phase, the plan calls for putting $68 million toward the 250 lots of the Lealii 1B Subdivision in Lahaina and $15 million for the project’s off-site water improvements. It also would put aside $6 million for the 16-lot Naiwa Ag Subdivision on Molokai, $5 million for the 50-lot Honokowai Subsistence Ag Phase 1, $3.5 million for 20 scattered lots in Hoolehua and $2 million for 75 Lanai Residence Lots’ off-site infrastructure, assuming construction funding is available after 2025.

Because the costs are estimates, funding may be subject to change.

* Colleen Uechi can be reached at cuechi@mauinews.com.