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.
The Audit Report was prepared by the Office of the Auditor pursuant to Act 309, Session Laws of Hawaiʻi 2025, which directed the Office of the Auditor to conduct a management and performance audit of the Statewide Office on Homelessness and Housing Solutions’ (SOHHS) administration of the Kauhale Initiative.
HomeAid Hawaiʻi was one of several organizations engaged by SOHHS to support the Governor’s Kauhale Initiative.
HomeAid Hawaiʻi brought a nonprofit development model that combines public funding, philanthropic contributions, industry expertise, and community volunteers to reduce market costs and stretch limited housing dollars further. Through the Kauhale Initiative, that model was put to work under the State’s emergency authority to deliver deeply affordable housing faster and at lower cost.
Although the primary purpose of the Audit was to review the State’s oversight of the broader Kauhale Initiative, the scope of the Audit Report focuses heavily on HomeAid Hawaiʻi development contracts, many of which were still underway at the time of review. That makes it important for us to provide the complete picture in relation to those contracts: both the financial record and what those public dollars produced.
The $13.7 million in “unauthorized, unsupported, or questionable” payments from SOHHS cited by the Auditor have been independently reviewed and resolved where necessary with SOHHS through standard reconciliation processes established by our contracts. Fewer than 5% of over 12,000 transactions reviewed to date have been credited back to the State, and HomeAid Hawaiʻi has not yet been reimbursed by the State for more than $1.7 million in outstanding approved costs.
We believe the Audit failed to achieve a complete accounting of reconciliation in favor of both parties, denying taxpayers information necessary to understand the full picture.
The Kauhale Initiative launched under emergency authority to meet an urgent need that existing government programs and systems weren't equipped to address. During the audited period from January 2023 through December 2025 HomeAid Hawaiʻi worked under three successive State Homeless Coordinators. Each brought changes in priorities, staffing, project scopes, and directives.
Our contracts were designed for that environment. The Initiative was new, emergency conditions demanded flexibility, and everyone involved expected the program needs to evolve as the work progressed. The contracts therefore built in a reconciliation process as a safeguard to review costs, resolve questions, correct allocations, and balance funds where appropriate. That process was both intended and followed. As the Audit noted, "many of the contracts were ongoing" at the time of review and reconciliation had not yet been completed at that point.
Whether the model worked. Act 309 called for a management and performance audit of the Kauhale Initiative. Fully understanding performance requires analysis of the results the public investment produced.
Kauhale units offer a level of affordability that traditional income-restricted housing almost never reaches. Kauhale residents typically pay program fees of $150-$450 a month or less, which puts kauhale within reach of people transitioning out of homelessness.
Outside this initiative, units priced for extremely low-income households are scarce. The Hawaiʻi Housing Finance and Development Corporation (HHFDC) administers several programs that support income-restricted housing, but most of those projects serve households earning 50 to 60 percent of area median income or more. This is a problem of basic economics: total per-unit costs for HHFDC-supported projects regularly exceed $600,000, and at deeply affordable rents, they wouldn’t be able to generate enough revenue to sustain themselves without cost-prohibitive subsidies.
Kauhale, by contrast, cost an average of $120,900 per unit. That figure includes sitework & infrastructure, communal facilities, planning and design, overhead, and indirect costs. Being able to deliver kauhale units at roughly a fifth of the cost of a traditional affordable housing development is what makes deep affordability possible.
By challenging the costs of the entire project.
We looked at land, policy exemptions, construction methods, labor, materials, community volunteers, private grants and fundraising, and where industry partners could contribute resources and expertise. Builders, trades, suppliers, government, nonprofits, foundations, and individual donors share credit for the thousands of lives transformed through the Kauhale Initiative.
Instead of asking, “How do we pay for what housing costs?” we asked, “How do we change what housing costs?”
Because many of the policies that shape housing costs were not designed around housing for someone who can afford $500, $700, or $900 a month.
Every requirement has a cost. Individually, those costs may appear reasonable. Together, they can determine whether deeply affordable housing is financially possible at all.
Kauhale gave Hawaiʻi an opportunity to test a different approach under emergency authority. The next step should be identifying which lessons can responsibly carry forward into permanent housing policy.
Build on the “Housing Solutions” part of the Statewide Office on Homelessness and Housing Solutions.
The Kauhale Initiative has demonstrated that Hawaiʻi can deliver deeply affordable housing at a fraction of the usual cost and created development capacity that Hawaiʻi should not lose. The next step is to apply those lessons beyond the emergency response and use them to address the broader deeply affordable housing need.
That also means focusing on people the traditional housing market and existing affordable housing models are not reaching, who are one paycheck away from losing their home.
Homelessness response remains critical. But housing solutions should also help prevent people from becoming homeless in the first place. The opportunity is to take what Kauhale taught us about building differently and apply it to a much broader deeply affordable housing challenge.
