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Puukapu and Panaewa areas on the island of Hawaii.

In summary, while attempts are being made to improve the farming homestead potential, it is our conclusion that time, and a substantial increase in resources, is needed in order to develop and implement a viable farming program.

Subleasing of Ranch Land: The subleasing of ranch lots by homesteaders to other individuals, some of whom, reportedly, are not native Hawaiian, is being accomplished through the use of grazing agreements that provide for the payment of a fee for the grazing of cattle. There are at least 20 homestead ranch lots with 5,893 total acres in the Waimea area on the island of Hawaii that are subleased to other individuals.

DHHL personnel in Waimea have submitted the grazing agreements they have been able to obtain for such lots to DHHL headquarters for approval. However, we were told by the Chairman of the Commission that the agreements have not been approved because to do so would acquiesce to the use of homestead lands by non-native Hawaiians which is not compatible with the intent of Act. DHHL or the Commission have not taken action to stop this practice. According to section 208 of the Act, as amended, the homestead lessee "...shall not sublet his interest in the tract or improvements thereon."


Progress toward the Act's objective of placing native Hawaiians on the land has been slow during the 60 years since enactment. And, although progress has improved during recent years, the ultimate objective does not appear to be near.

Under current concepts the needs for financial resources appears to be one of the primary obstacles to rapid progress toward the end objective. For example, we estimate that over $190 million will be needed to provide fully improved lots for each of the applicants for residential lots on the current eligibility lists and another $254 million of funds will be needed to provide residential construction loans to these people. Add to this the cost of improvements and loans for farm and ranch applicants and the cost of administering the program and the total costs could easily exceed $600 million. Considering that the State is currently contributing between $6 and $7 million annually and lease income is averaging about $1.4 million per year, it will require over 50 years to meet the Act's objectives for the native Hawaiians on the current eligibility lists.


1. In our opinion, the circumstances indicate that there is a need to consider conceptual alternatives. We, therefore, recommend, together with the other recommendations in this report, that the following alternatives be considered:

a. Determine whether it is necessary to provide fully improved residential lots at no cost to the applicant. Alternatives to consider are reductions in the extent of improvements provided and/or a requirement that applicants pay for certain improvements.
b. Determine if an alternative to direct loans is feasible, such as some type of guaranteed subsidized loan program using commercial funding sources.

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