What DHHL Pursued in 2026
Months before the start of the legislative session, DHHL released a video to the public explaining the state of their projects. Details on individual project updates are posted here.
By Mele Kāneali‘i, 2026 HHF Policy Fellow
June 5, 2026 — For the more than 29,000 Native Hawaiians waiting for Department of Hawaiian Home Lands (DHHL) leases, the 2026 legislative session offered a clearer picture of both the opportunities and challenges facing efforts to reduce the waitlist. Pre-session briefings in the Senate Ways & Means and House Finance Committees and DHHL’s publicly-outlined priorities made it clear that many of the session's key debates would center on how to provide the resources needed to move projects from planning into construction. Lawmakers ultimately considered a range of proposals aimed at strengthening how DHHL delivers for beneficiaries through expanded financing tools, new revenue sources, and efforts to address longstanding barriers to homeownership.
While some measures advanced and generated significant discussion, others stalled before reaching the finish line, highlighting both the broad recognition of DHHL's housing needs and the ongoing challenge of securing long-term resources to address them. Several bills emerged as key measures during the session, reflecting legislative efforts to support housing development, infrastructure funding, agricultural opportunities, and governance reforms affecting DHHL beneficiaries.
Looking Back at 2025
Last session offered an example of how easily progress can stall. HB606, which sought to extend the Act 279 Special Fund through 2028 and direct resources toward reducing the waitlist, made it to conference with strong support from DHHL, the Office of Hawaiian Affairs, and the ACLU. While the committee announced it would reconvene to resolve differences between the House and Senate versions of HB606, HD1, SD1, that meeting never happened, and the bill did not move forward.
Other measures met a similar fate in the Senate Committee on Ways and Means (WAM), including SB152, SB1653, and SB151, which addressed financing capacity, loan guarantees, and infrastructure-related studies. For each of these bills, WAM was their final stop, and without hearings, none of them advanced.
2026 DHHL Priorities
Many of the 2026 measures build directly on unfinished conversations from the last legislative session, especially around Act 279, SLH 2022. That law authorized $600 million for DHHL housing and infrastructure in 2022, and according to pre-session briefings, those funds are now fully encumbered. About $511 million is committed to infrastructure, $52.8 million to land acquisitions totaling nearly 556 acres, and $36 million to financing and services that support beneficiaries entering homeownership.
As of December 31, 2025, roughly $120 million has been spent, with the remaining funds committed through contracts and progress payments. The scale of the work explains why progress has felt slow. Most projects began between 2022 and 2026, with completion timelines ranging from 2025 to 2027 and, in some cases, extending longer due to permitting and infrastructure demands. Statewide, DHHL is managing 28 active projects totaling 5,792 leases, including developments on Hawai‘i Island, Kaua‘i, Maui, and O‘ahu.
To stretch limited funding, DHHL has phased larger developments over time. A 2022 strategic plan projected 2,700 units, but through land acquisitions and financing strategies, that estimate has grown to roughly 6,400 planned leases. Additional funding is now needed to move many of these projects into Phase Two.
Infrastructure and financing remain the primary constraints. Infrastructure costs are particularly high because much of the land placed into the Hawaiian Home Lands trust under the Hawaiian Homes Commission Act of 1921 consisted of rural, remote, and largely undeveloped parcels, after many prime agricultural and urban lands were excluded from the trust. DHHL is seeking to raise the ceiling on its NAHASDA revolving loan fund from $23 million to $31 million, which would allow the department to recycle federal housing dollars to support additional infrastructure, site development, and beneficiary loans as projects move forward. Counties have also helped offset infrastructure costs: Maui County has committed 20% of its General Excise Tax revenues, projected at $80-90 million by 2030, and the City and County of Honolulu has transferred land and allocated funding for projects.
Staffing is another pressure point. DHHL has requested 22 new positions, especially on neighbor islands where staffing has not kept pace with development. These roles, as they mention, are essential for processing applications, managing land transactions, resolving trespass issues, and coordinating work across islands.
Looking beyond Phase One, DHHL has emphasized the need for stable, long-term funding mechanisms. While Act 279 was a historic step, the department has been clear that current resources are insufficient to meaningfully reduce the nearly 29,000-person waitlist. Because large projects are phased and infrastructure timelines are long, only a limited number of units can be delivered within a few years. DHHL has estimated that fully eliminating the waitlist would ultimately require several billion dollars over time, even if not in a single legislative session.
During discussions on several DHHL-related measures, some lawmakers noted that additional appropriations from the State's general fund could support DHHL housing and infrastructure projects. However, because general fund appropriations are determined through the annual legislative budget process, funding levels can vary based on legislative priorities and fiscal conditions.
Historically, general fund support for DHHL has primarily been directed toward administrative and operational functions rather than large-scale infrastructure and construction investments. As a result, the department has continued to examine other mechanisms that could provide more predictable long-term support for housing and infrastructure development, including potential General Excise Tax exemptions, Green Fee funding, and recurring revenue sources such as conveyance tax revenue.
The Conveyance Tax Debate
One of the most closely watched proposals this session was HB2049/SB2700, which would have changed how Hawaiʻi’s conveyance tax is calculated. The idea proposed establishing a marginal rate system, so higher rates would apply only to the portion of a residential property’s value above set thresholds. Luxury and investment homes, particularly non-owner-occupied properties, would have paid the highest rates, while multi-family housing projects would have been taxed per unit to help protect affordable housing. Beginning in 2027, the proposal also would have adjusted tax brackets for inflation to prevent moderate-priced homes from being pushed into higher tiers over time.
Before the measure stalled this year in the dying days of the 2026 Legislative Session, its latest version would have dedicated up to $40 million annually in conveyance tax revenue to DHHL, down from the original $60 million proposed. Earlier drafts included a tiered system with different rates for owner-occupied and non-owner-occupied properties, reflecting ongoing efforts to balance revenue generation with concerns about impacts on local families.
Although the bill ultimately stalled, supporters argued that it would have represented the largest recurring funding commitment in DHHL history and a significant step toward reducing the department's decades-long waitlist.
The proposal was discussed during a Zoom briefing for DHHL beneficiaries on February 25, where Rep. Darius Kila, Rep. Luke Evslin, and Rep. Jeanné Kapela shared their perspectives on legislative measures affecting the department. Lawmakers also highlighted HB2017/SB2887, which proposed a nonrefundable income tax credit to offset agricultural startup costs on Hawaiian Home Lands, including land preparation, irrigation, fencing, and equipment. They weighed HB2586/SB2784 as well, a measure intended to increase state revenue by taxing rental car companies at the standard retail general excise tax rate when purchasing fleet vehicles and by funding a Department of Taxation inspector to improve enforcement on federal contractors operating in Hawai‘i.
Ultimately, the 2026 legislative session underscored the ongoing challenge of securing the resources DHHL needs to move projects from planning into construction. While the session has ended, questions about how Hawai‘i will fund housing development, infrastructure, and other commitments to Native Hawaiian beneficiaries remain unresolved and will likely continue to shape future legislative efforts.
Notable Bills Weighed in 2026
Among the dozens of measures introduced during the 2026 session affecting the Department of Hawaiian Home Lands, three received significant attention. HB2049/SB2700 would have modernized Hawaiʻi's conveyance tax system and established a major new recurring funding stream for DHHL but ultimately stalled in the Senate Committee on Ways and Means. HB2017/SB2887 proposed supporting agricultural development on Hawaiian Home Lands through a tax credit for startup costs, while HB2586/SB2784 sought to increase state revenues through changes to rental motor vehicle taxation and improved tax enforcement. Together, these measures reflected the range of approaches lawmakers considered to support DHHL and Native Hawaiian beneficiaries.Land, Infrastructure, and Development
SB521 requires DHHL to coordinate with county water departments to ensure access to potable and agricultural water on Hawaiian home lands, with agreements made publicly available. The bill has been re-referred to the Hawaiian Affairs and Judiciary committees.
SB2702 establishes a limited right of first refusal for DHHL on certain county tax-sale properties, allowing the department an opportunity to acquire lands before public sale. A public hearing has been scheduled.
SB1654 and HB1309 authorize the transfer of certain state lands to DHHL. These bills were re-referred to committees and continue discussions from prior sessions.
SB151-equivalent measures (via geothermal and subsurface bills) include SB2901 and HB1982, which support geological and geothermal studies on DHHL lands to inform cost-effective development.
Financing and Revenue Tools
SB2635 appropriates an unspecified amount of funds to DHHL for land acquisition or development, mortgage and rental subsidies, and related services to reduce the waitlist, appearing to function similarly to Act 279.
SB3127 and HB2308 (Governor’s Package) increases the state’s loan guarantee for DHHL from $100 million to $500 million, expanding access to financing for both the department and beneficiaries.
SB2700 and HB2049 (Native Hawaiian Affairs Caucus) restructure the conveyance tax and dedicate portions of the revenue to the Hawaiian Home Lands Trust Fund and infrastructure through the Dwelling Unit Revolving Fund.
SB2784 and HB2586 adjusts general excise tax treatment for rental car purchases and appropriates funds to DHHL specifically to address the beneficiary waitlist.
SB2785 and HB2400 direct increases in transient accommodations tax revenues toward DHHL projects tied to climate resilience, natural resources, and destination management.
Accountability and Beneficiary Protections
HB2450 requires the State Auditor to conduct a financial and performance audit of DHHL, including a review of Act 279 funds.
HB1757 (House Minority Caucus) aligns DHHL leases with federal securitization standards, aiming to improve mortgage eligibility and financing access for beneficiaries.
SB2260 clarifies lease and waitlist rules by requiring individuals who receive a DHHL lease to forfeit interests in other tracts and be removed from additional waitlists.
SB3128 expands lease transfer and succession eligibility to include nieces and nephews who meet Native Hawaiian blood quantum requirements. The bill has passed first reading.
