individual residential lots range from 7,500 square feet on Oahu to one acre on Molokai. 16/
Cost and Program Financing
The greatest problem encountered by the DHHL in its residential program is lack of funds. The DHHL estimates that it costs about $75,000 to place a native Hawaiian family on a residential homestead. The State of Hawaii, through the DHHL, provides the site development and design for residential lots at no cost to the homesteader. These infrastructure improvements include roads, sewers, water, electrical lines, streetlights, and sidewalks. These site improvements cost about $35,000 per unit, and constructing a house costs another $40,000. Here again, the State bears the cost of financing low interest loans or guaranteed loans. 17/ DHHL estimates that it will require $477 million to satisfy the present residential waiting list of 6,360 homestead applicants. 18/ The approximate cost of a home constructed on homestead lands is considerably less than the average cost of home construction in Hawaii in general. Because interest rates are low, the monthly payments by homesteaders are also lower than for others in the State. However, these facts do not take into account the quality of homestead housing. Many homesteaders complain about substandard quality.
Since 1975, the State of Hawaii has provided the homesteading program over $40 million in general obligation bond monies for offsite improvements and loan capitalization. However, this infusion of State funds is not likely to continue because the State Constitution limits its authority to incur debt.
The DHHL is authorized to make loans from any revolving loan fund to lessees for the following purposes:
- (1) The repair, maintenance, purchase, or erection of dwellings on Hawaiian home lands, and the undertaking of other permanent improvements thereon;
- (2) The purchase of livestock, swine, poultry, fowl, and farm equipment; and
- (3) Otherwise assisting in the development of tracts, farm and ranch operations;
- (4) The cost of:
- (a) Breaking up, planting and cultivating land, and harvesting crops;
- (b) Purchase of seeds, fertilizers, feeds, insecticides medicines and chemicals for disease and pest control for animals and crops, and related supplies required for farm and ranch operations;
- (c) The erection of fences and other permanent improvements for farm or ranch purposes;
- (d) The expense of marketing; and
- (5) To assist lessees in the operation or erection of theaters, garages, service stations, markets, stores, and other mercantile establishments, all of which shall be owned by lessees of the department or by organizations formed andcontrolled by said lessees. 19/