Deeply affordable housing starts with bringing costs down. HomeAid Hawaiʻi brings public funding, philanthropic contributions, industry expertise, and community volunteers together to reduce market costs and make limited housing dollars go further.
Through the Kauhale Initiative, we put that model to work under the State’s emergency authority and with its guidance, helped the State to deliver safe affordable housing while reducing costs. As we address the audit claims, we believe the full picture should include both how public funds were managed and what was delivered: homes, value, and a different path to housing people can afford.
Households with the least income need the greatest support. All-in costs for Hawaiʻi Housing and Finance Development Corporation (HHFDC) regularly exceed $600,000 per unit, while we report an average of $120,900 per unit. These figures reflect different housing types and cost scopes but provide important context for evaluating this approach to affordability.
This deep affordability is made possible through a combination of philanthropic and industry contributions that supplement State funds. In other words, such a low-cost alternative to affordable housing would not be available to the State in the absence of philanthropic and industry contributions.
HomeAid Hawaiʻi’s model reverses the housing subsidy framework: we have directly facilitated over $4.4 million in philanthropic and industry contributions to supplement approximately $39 million in State funding for the Kauhale Initiative. Public-private coordination also resulted in an estimated $11.7 million in construction cost savings compared with traditional development models. We believe the audit gave insufficient attention to how the Kauhale Initiative can deliver safe, affordable homes to those most in need.
Kauhale launched under emergency authority as projects and delivery systems evolved. HomeAid Hawaiʻi and SOHHS incorporated a reconciliation process into the contracts as a safeguard to review costs, resolve questions, correct allocations, and return funds where appropriate. Many of the financial claims underlying the $13.7 million in allegedly questionable payments cited in the audit report have already been reconciled and resolved.
Fewer than 5% of the thousands of transactions reconciled to date have required correction in favor of the State. The most recent reconciliation efforts appear to indicate that HomeAid Hawaiʻi has not been reimbursed for more than $1.7 million in State-directed project costs advanced by HomeAid Hawaiʻi as a result of State-directed changes to project scope and contract terms. A complete accounting should address reconciliations in favor of the State, as well as HomeAid Hawaiʻi.
We believe the audit report failed to achieve this, denying taxpayers information necessary to understand the full picture.
SOHHS has a $88.2 million legislative appropriation to support the broader Kauhale Initiative. Act 309 required a management and performance audit of that complete Initiative. Instead, the Auditor only examined nine development contracts belonging to HomeAid Hawaiʻi, representing less than half of the total Kauhale Initiative budget. We believe that concentration leaves the public without a complete evaluation of program outcomes and value.
Hawaiʻi needs an evaluation that identifies what should be corrected and what is working. Without adequately examining housing outcomes, project savings, the value created through public-private partnerships, and the supplemental financial support rendered thereby, we risk missing an opportunity to bring deeply affordable homes within reach of more residents at a lower cost to the State of Hawaiʻi than is otherwise achievable through costly traditional housing programs.
For additional information, please see homeaidhawaii.org/dashboard.
