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A condo project for Hawaiian homelands beneficiaries on Kauai has been given new life.

The Hawaiian Homes Commission voted 6-2 Monday to pursue additional federal and state funds to acquire the 82-unit Courtyards at Waipouli complex in Kapaa after a state housing agency earlier this year rejected tax credits the department needed to purchase the apartments.

The state Department of Hawaiian Home Lands plans to turn those units into rentals that waitlisters would have the option to later purchase. The project has been opposed by area residents as well as some waitlisters on Kauai who want homestead lots and not condo units.

But the decision on Monday to pursue additional funds was welcome news to some Native Hawaiians who have waited for years for an opportunity to acquire their own homes.

They include Avery Youn, one of the original architects for the Courtyards at Waipouli. Youn has been on the waitlist for a residential lease since 1986.

“It’s better to have this than nothing at all,” he told the commission.

The project is targeted at beneficiaries earning up to 100% of area median income, defined as annual income of $120,100 for a family of four.

A portion of the units would be limited to those earning 80% or less of the area median income, $111,000 for a family of four. About 600 beneficiaries on Kauai are at or below that income threshold, according to a 2020 beneficiary study.

The rents are anticipated to be below market rate and would depend on a tenant’s income level and the type of unit. They are expected to range from as low as $554 a month to $1,667.

Tenants would have the option to purchase the unit after 10 years, with their rental payments going toward the equity of the unit. They would also have the option to pass the lease on to their Native Hawaiian children.

The department targeted the project at those in lower income brackets.

“It’s ideal for someone who is retired, and tired too,” Sandra Kinsey, 87, told the commission by telephone.

Kinsey said she now lives in Montana. She applied for a residential lease in the early 2000s and hopes that Waipouli may be her ticket home.

“My deepest dream was to get back to Hawaii,” Kinsey said. “That’s my home.”

DHHL needs to come up with at least $44 million and close the purchase by Feb. 3, according to a summary of the project’s purchase agreement.

The new financing plan pivots away from low-income housing tax credits originally proposed earlier this year and instead focuses on money from the U.S. Department of Housing and Urban Development and from the state’s Dwelling Unit Revolving Fund. 

DHHL anticipates getting up to $22.5 million through a HUD loan, and up to $9.9 million through a loan from the revolving fund. The department also anticipates spending $25 million in federal funds under the Native American Housing Assistance and Self Determination Act, or NAHASDA. 

Sherri Cummings, a waitlister from Kauai, opposed the Waipouli project.

“I’m not against rent-to-own if it results in aina and a hale,” she said.

Cummings said that she wanted to see the NAHASDA funds go to developing subsistence agricultural lots in Anahola that have been in the project pipeline for years.

Lehua Kinilau Cano, DHHL’s NAHASDA program manager, said that while the department doesn’t usually use those federal funds for developing infrastructure on homestead lots, it would look into using NAHASDA funds for home construction in the Anahola area in addition to funding Waipouli.

If the project does move forward, more than 300 current residents of Waipouli would need to relocate. 

One Waipouli resident who only gave the commission her first name, Lulu, worried that a relocation plan has not yet been finalized, and said that the commission should create one before it approves the new financing plans.

Residents have been concerned that they may need to move off Kauai because of the island’s small rental market.

Commissioner Dennis Neves, who represents Kauai, voted against the financing proposal. He said he had several unanswered questions over rental levels, how successorship works and what happens to the equity in a unit if a beneficiary dies.

“Those types of questions need to be answered now,” Neves said.

Christian O’Connor, DHHL’s consultant for Waipouli, said the department is going through loan agreements and negotiations that may answer some of those questions.

“There’s a process we’re going to go through that will iron these things out,” he said.

K D Waipouli LLC, managed by developer Kevin Showe, currently owns the Waipouli complex.

DHHL has until Nov. 18 to complete its due diligence period as well as pay K D Waipouli $1 million to start the closing process. The department has set aside $2.4 million for the due diligence period.

Civil Beat’s coverage of Native Hawaiian issues and initiatives is supported by a grant from the Abigail Kawananakoa Foundation.