Developer helps Hawaiian community with affordable housing
October 4, 2019
Credit: By Janis L. Magin with the Pacific Business News
Kali Watson’s career as an affordable housing developer pre-dates the establishment of the Hawaiian Community Development Board, the nonprofit he helped start 19 years ago to help the Native Hawaiian community with housing.
Watson, who is an attorney, worked in the state attorney general’s office before serving as the director of the Department of Hawaiian Home Lands from 1995 to 1998. During his tenure, the department reached a settlement with the state that resulted in the transfer of $600 million in installments of $30 million per year for 20 years, as well as the transfer of more than 16,000 acres of land for homesteads.
Watson returned to private practice with his wife, Judith Ann Pavey, and partner Richard Hoke for a few years after leaving the government and started a pre-fabricated home company called Quality Homes of the Pacific to manufacture affordable houses for homesteaders.
He found his passion in 2000 when he started the nonprofit Hawaiian Community Development Board, which started out by rebuilding dilapidated houses for beneficiaries on Hawaiian homestead lands, then moved on to affordable multifamily projects, both redevelopment and new construction, on private lands.
Some of the projects include the Kewalo Apartments in Makiki, a renovation of two two-story buildings with 38 units for tenants earning no more than 60% of the area median income and the Hale Makana O Nanakuli, a $14.6 million, 48-unit affordable rental project next door to another HCDB project, the Longs Drugs-anchored Nanakuli Village Center that’s set to finish next month. Watson’s group partnered with 3 Leaf Holdings for both projects.
Watson’s nonprofit is currently partnering with several affordable housing developers on other projects, including Coastal Rim Properties and Highridge Costa on the Kulana Hale project, two towers under construction in Kapolei for seniors and families making 60% AMI; Pacific Development Group on the Halawa View Apartments near Aloha Stadium, the first phase was a renovation of a 121-unit 14-story tower built in 1970, while the second and third phase to build 302 new apartments won approval in July from the Hawaii Housing Finance and Development Corp. for $130 million in financing to build 302 new apartments.
What made you decide to get into housing? It was more an understanding of the challenges facing our Hawaiian people. One of the core causes is the lack of housing. A third of the homeless are Hawaiians, and here we are living in their home state, and yet they suffer the most and that historically has always been the case with any indigenous people. For me, the challenge was to identify solutions. One of the first steps I did was I educated myself, I went to school, got my law degree then worked at the Legislature. And I also worked at trying to position myself where I could best help Hawaiians address the concerns or challenges. And so that’s why, when I was in private practice … I wanted to have an impact, so I applied for the job as head of Department of Hawaiian Home Lands and got the job and started trying to improve the program. We got the $600 million settlement with the state in which the Legislature not only funded $600 million settlement through Act 14, they also started transferring over 16,518 acres, which is also an issue even today. And you know, after finishing at DHHL, I got an additional opportunity because I was approached by the Nanakuli Homestead Association to help them with their village center, that’s the one that’s going to be opening in probably October of this year with retail as well as medical clinics.
The DHHL got the $600 million settlement from the state, where did that money go? It went to a variety of things, with respect to building infrastructure, I believe some of it has been used to finance housing construction. There’s about $100 million left, that has been invested, a fund to generate money that they can use to run their programs. If I were the director I’d take that $100 million, and leverage it, to build houses, They could easily turn that into a $300 million fund, combined with low-income housing tax credits, access the rental housing revolving fund, grab some other funding sources that collectively they could build a lot of housing.
What’s the biggest challenge of trying to build housing for the Native Hawaiian population? The biggest challenge in my mind is getting people on board, in collectively working together, and also being educated as to their legal entitlements. DHHL lands are not subject to zoning, especially their use for the purposes of providing benefits to the Native Hawaiians. You’ve got all these different resources that are not being accessed, partly, because of a lack of that developer skill set. And that’s why I’ve evolved in understanding the development process. I wish I had known this stuff when I was a director. Although we did 3,100 homesteads, I would have done a lot more. And in this last 20 years, I think we could have addressed not only the long waiting list the 20,000 on the waiting list, but also address the homeless.