Key state senators plan to summon Hawaii’s homelessness coordinator, HomeAid Hawai‘i’s chief executive officer, and the state auditor to a November briefing as lawmakers consider potential changes to Gov. Josh Green’s signature kauhale initiative after an audit identified more than $13.7 million in payments that were deemed “unauthorized, unsupported or questionable.”
“Of course I have major concerns,” said state Sen. Joy San Buenaventura, chair of the Senate Health and Human Services Committee that helps oversee the tiny-home kauhale initiative to address homelessness.
Like several other House and Senate members, San Buenaventura said she does not want to halt construction of kauhale communities, which are intended to move people from the streets into housing and connect them with services. Instead, she said, “We need to try and tighten up the problems.”
Legislators say they want to ensure that the Statewide Office of Homelessness and Housing Solutions (SOHHS) has properly trained staff to oversee kauhale spending by nonprofit builder HomeAid Hawai‘i, a hui of builders and developers that’s on pace to open a total of 33 kauhale communities across the state by the end of the year. Green told the Honolulu Star-Advertiser last week that these communities so far have aided 2,900 people and saved taxpayers $150 million.
However, San Buenaventura said she is especially concerned that one vendor, HomeAid, has received a “single-source contract” for kauhale construction.
“We’ve had homelessness as an emergency for almost a decade now so we can’t keep using that as an excuse to not open it up to bidding,” she said. “We all understand the governor’s concern about needing to do things fast. But there’s got to be a point where we can’t use it as an emergency. There needs to be a strategic plan to reduce homelessness instead of this patchwork. I asked for a plan last session and still haven’t gotten it.”
Sen. Sharon Moriwaki, the Senate Ways and Means Committee vice chair, said Green’s use of emergency proclamations that allowed kauhale construction to accelerate after he was elected in 2022 also have allowed state funding to be mismanaged and almost “abused.” She said she worries about lax oversight by the state.
“That leaves a lot of room for us to question how it’s being managed — and we need to fix that,” Moriwaki said. “But I don’t think it’s ending the homeless kauhale program.”
Like San Buenaventura, Moriwaki also would like a comprehensive plan to move Hawaii’s homeless off the street, into kauhale and onto lives of long-term independence.
“It should have been managed much better for the benefit of the homeless,” she said. “It really is egregious that there was no oversight. We really do need more controls.”
Moriwaki said the audit revealed a broader range of problems than lawmakers expected and that a briefing could bring problems “into the light” to help lawmakers determine how to address the issues.
Green’s office said in a statement, “the Office of the Governor welcomes further discussion with all stakeholders, including the Legislature. Once all the facts are presented, they will understand that the concerns have been and are being addressed, as well as the success of the program as a whole.”
His office on Friday could not immediately provide data on kauhale residents, including how many have moved on to independent living.
But Green told the Star-Advertiser that, for the first time since 2018, the number of sheltered homeless people on Oahu this year exceeded the number living unsheltered, pointing to that milestone as evidence the initiative is producing results.
Key House members share the Senate’s general support for kauhale, along with concerns for better spending controls.
“The House is supportive of the kauhale program and its efforts to support individuals experiencing homelessness,” House Speaker Nadine Nakamura told the Star-Advertiser in a statement. “However, the responsible and accountable use of taxpayer dollars is fundamental to public trust and must be upheld.”
Rep. Luke Evslin, chair of the House Housing Committee, said, “I certainly hope the outcome (of the audit) is not decreased kauhale funding.”
At the same time, Evslin said, “We need to ensure the money is spent well.”
Earlier warning signs
The kauhale concerns are not new. On April 20, as the legislative session began winding down, State Auditor Less Kondo notified the Legislature of the need for “immediate attention” to the kauhale effort to address “improper use of public funds.”
“We are concerned that significant deficiencies in internal control in the Statewide Office of Homelessness and Housing Solutions’ (SOHHS) implementation of the kauhale initiative create an ongoing and substantial risk of improper use of public funds,” Kondo said in his memo.
The memo raised concerns among House and Senate conference committee members that resulted in the death of a kauhale funding bill on the last day of conference committee negotiations, said Sen. Troy Hashimoto (D, Wailuku-Kahului-Waihee), who serves on the powerful Senate Ways and Means Committee.
Senate Bill 2803 would have required the state Department of Human Services to come up with a reorganization plan for the Office of Homelessness and Housing Solutions, including annual reports to the Legislature. SB 2803 also would have authorized issuing general obligation bonds to fund additional kauhale efforts.
“On the Senate side, we wanted to make sure that there were structural fixes to the problem,” Hashimoto said.
The kauhale initiative still has support in the Legislature, and Hashimoto and others said that additional ideas for changes to the Office of Homelessness and Housing Solutions’ oversight of kauhale construction likely will come out of the informational briefings that San Buenaventura plans to hold.
“No one is disputing the governor’s desire to move fast to get people housed,” Hashimoto said. “But at a certain point we do need to make sure that funds are spent appropriately and accounting happens correctly.”
Sen. Angus McKelvey, vice chair of the Senate Health and Human Services Committee, said in a statement that, “Every dollar wasted through inefficiency, mismanagement, or inadequate oversight is a dollar that could otherwise be used to provide critical services to people who desperately need them.
“While the kauhale initiative has demonstrated its potential to help address our homelessness crisis, the importance of that mission makes responsible stewardship of those resources even more imperative,” McKelvey said.
‘Ambitious promise’
According to Kondo’s audit, neither the SOHHS nor HomeAid were prepared for the rapid expansion of kauhale that began with the first kauhale in Kalaeloa while Green was lieutenant governor.
The effort accelerated through a series of emergency proclamations that Green issued after being elected governor in 2022.
The pace picked up even more when Green pressed HomeAid to also build low-cost housing in Lahaina in 2023 to house survivors of the Aug. 8, 2023, Maui wildfires that killed 102 people and destroyed an estimated 5,500 housing units.
HomeAid officials previously told the Star-Advertiser that the nonprofit’s operating budget grew from $207,407 in 2015 to $142.9 million in 2024 as it took on an increasingly central role in the state’s housing efforts.
The kauhale initiative, according to the audit, “began with an ambitious promise: to treat homeless as a public health emergency while rapidly expanding deeply affordable housing for people experiencing homelessness or at risk of becoming homeless. … The initiative, however, quickly became something different. … (that) required the State to assume substantially greater responsibility for planning, contracting, construction oversight, and financial management.
“The Statewide Office on Homelessness and Housing Solutions was established to coordinate homelessness policy, not to plan and administer public works projects,” according to the audit. “Yet it assumed responsibility for development-related contracts totaling more than $42 million without the qualified staff, technical expertise, written procedures, and internal controls needed to plan and administer them. …
“Its actions and its failures to act — created conditions in which waste could occur and go undetected,” according to the audit.
HomeAid CEO Kimo Carvalho told the Star-Advertiser in a statement that he looks forward to appearing at an informational briefing ahead of January’s start of the next legislative session.
“We welcome the opportunity to share with lawmakers what Kauhale has delivered and the lessons that can help modernize government systems so emergency housing moves quickly with clear accountability and safeguards for public funds,” Carvalho wrote. “We look forward to strengthening the initiative and advancing a model that makes housing dollars go further and reaches more people who need homes.”
Comments are closed.