Hawaii Spent Millions on Housing for the Homeless. Show Us the Receipts
A Honolulu Civil Beat review found that the state agency in charge of Hawaii’s homeless villages lacks records to show how millions paid to a nonprofit to build hundreds of housing units was actually spent
The state agency in charge of Hawaiʻi’s homeless villages lacks the records to show how millions of dollars paid to a nonprofit to build hundreds of housing units was actually spent, a Civil Beat review of contract documents and invoices found.Since late 2023, the state has issued more than $37.1 million in no-bid contracts to HomeAid Hawaiʻi to build small dwellings as part of Gov. Josh Green’s signature Kauhale Initiative.While HomeAid has provided the Department of Human Services with balance sheets and supporting documents showing how it used state money for some of its projects, the state doesn’t have receipts or other documents detailing the specific use of public money for other projects.DHS told Civil Beat that some of those projects are not finished and will be subject to agency audits once they are.Now, Green wants $50 million more from the Legislature for his program to address homelessness. The Legislature has yet to agree on that funding as lawmakers consider what requirements to attach to the money to build kauhale villages across the state.House and Senate lawmakers have disagreed on the terms of the kauhale bill and must hash out differences during a conference committee, which has not yet been scheduled. A key point of contention is whether to require at least two bids for the construction of the villages.The Kauhale Initiative is meant to solve one of the state’s critical social issues. After running for governor on a campaign to address Hawaiʻi’s housing crisis, Green declared a state emergency on homelessness in 2023. Oʻahu’s annual Point-In-Time count at the time tallied more than 6,223 homeless people, more than half of them living outside. Green’s team quickly built 12 kauhale statewide. With the procurement code suspended under the state of emergency, Hawaiʻi waived competitive bidding and went with a no-bid development contractor, HomeAid Hawaiʻi, to implement the program. The initiative calls for creating “affordable spaces for housing and healing our people, through intentional ‘kauhale’ design and operation.”Critics, including of late Green’s former homelessness coordinator John Mizuno, have raised questions about operating costs of some kauhale. And Civil Beat’s review of construction expenditures highlights potential lapses in the Department of Human Services’ oversight of those projects.The department was unable to provide documents to show spending by HomeAid on two of the priciest kauhale projects to date — Middle Street’s Phase 2 and another one in Kahului on Maui — totaling more than $14 million. Work on those projects has just recently begun, officials said, although the nonprofit has received about $2 million up front.Details on two other contracts were also lacking. For one of those contracts – to deliver 273 homes statewide – HomeAid CEO Kimo Carvalho billed the state for nearly the entire cost of the contract all at once and provided almost no detail on how funds were used.On another contract for the Alana Ola Pono kauhale in Iwilei, the state paid out $2.5 million – half the value of the contract – up front with only a brief description of work that would be performed. Details on what became of the rest of the money weren’t provided in response to a records request from Civil Beat. That project opened in December, but is about two weeks away from completion, Carvalho said.Much of the work to review invoices was done by Jun Yang, who at the time was an employee of the Department of Transportation but also part of a kauhale team formed to aid Mizuno. Yang was so deeply involved that at one point, when there was a hold up in payment from DHS to HomeAid in September, Yang told Carvalho that if HomeAid staff sent payment request forms “we will get them taken care of.”Yang took over the top job from Mizuno in February.DHS Deputy Director Joseph Campos told Civil Beat on Wednesday that he recognizes his agency’s responsibility to the public and to legislators. The department has many processes to review the expenditures, he said, and it is not trying to skirt accountability.“Although we utilize the authority of the emergency order not to do a formal bid process, that does not mean we go willy nilly in choosing whatever we want.”Despite the absence of backup documentation to prove it in some cases, Campos said, “almost on a daily basis, we’re price-engineering or value-engineering a contract to make sure that we’re getting the best possible price out there.”
Bill To Require Competitive Bidding In Question
The House has sought to address questions of accountability by requiring at least two bids from builders. But the Senate removed the requirement after Yang testified that requiring two bids could delay development of projects. House Housing Committee Chairman Luke Evslin, who had amended the kauhale bill to include the two-bid requirement, said he couldn’t say what position House conferees will take during the negotiations to reconcile the two versions. Evslin has been named one of the co-chairs of the conference committee.An older version of the kauhale bill required “at least two bidders for any kauhale project”, however it was dropped in more recent versions.“For my own personal preference, the two-bid requirement makes a lot of sense to ensure accountability and efficiency,” Evslin said.Evslin acknowledged that no-bid contracts are allowed under Green’s emergency proclamation on homelessness, which suspends the state procurement code. But Evslin said requiring at least two bids makes sense as Green’s initiative matures from an emergency policy into a permanent endeavor.“Our hope is to transition the Kauhale Initiative into something that is sustainable,” he said. Green declined an interview request to discuss the kauhale bill. His spokesperson, Makana McClellan, said the administration would wait until after session to talk about active bills. Mizuno also declined to comment.McClellan said that HomeAId’s kauhale projects are routinely reviewed for compliance by the state Attorney General’s Office.
How To Make The Program More Effective
The rift over the two-bid requirement reflects a difference of opinion between the former and current coordinators in charge of overseeing Green’s Statewide Office on Homelessness and Housing Solutions. The overall philosophy, which isn’t disputed, is that it’s better for people and less expensive for the state to create tiny home villages with support services than to provide services to people on the street. The dispute involves how to get there.Mizuno, a longtime former lawmaker whom Green appointed to the position in December 2023, testified in February in favor of requiring two bids to build kauhale. Evslin’s housing committee amended the bill to incorporate the request.Diesel fuel and equipment to provide electricity cost $21,032 just for April — which came out to more than $1,000 a month per tiny home — according to invoices from Sunbelt Rentals examined by Civil Beat. In contrast, the average monthly bill for a full-sized residential home on Oahu is $202, according to Hawaiian Electric Co.During a tour of several properties Mizuno showed that monthly cost for another kauhale, located in a converted residential home, was just over $1,300 per bed.Generally a staunch advocate of Green’s initiative, Mizuno said he was “very concerned with off-grid kauhale.” At the time, Green said the off-grid kauhale were merely a bridge to get people off the street and into homes.By month’s end, Mizuno had stepped down from the top post to be Green’s special advisor on homelessness, replaced by Yang, who previously had been homelessness coordinator for the Hawaiʻi Department of Transportation.Less than a month later, on March 12, Yang requested that lawmakers remove the two-bid requirement for kauhale construction contracts during testimony in a joint hearing of the Senate committees on Health and Human Services and Housing.Echoing Department of Human Services testimony, Yang said he was “concerned that the two-bid minimum may delay project development in certain communities if only one bid is received.”
Documents Show Irregularities
Those records included invoices and supporting documents typical of large construction projects and final reports required by the contracts. The request initially focused on the Middle Street and Iwilei kauhale.The department’s first response to the request two weeks later didn’t include documents detailing expenditures. Instead, the department just provided copies of the contracts themselves.The agency eventually scanned and turned over copies of invoices and supporting documents for most of the kauhale projects on April 11. It provided extensive documentation for the Middle Street project’s first phase.But there were notable irregularities concerning other projects.For example, HomeAid was granted a contract in June to provide 273 tiny home units at a cost of $5.8 million. Payment was supposed to be made in four installments between June and September, with invoices and documents accompanying each installment.Instead, HomeAid sent one invoice in August, covering $174,000 worth of work, and another in October for $5.6 million. The majority of those funds went to the broad category of “Consulting and Non Employee Expense.” There’s no breakdown of what that entailed.“I believe we’re still working through the process,” Campos said of the project. “I believe we’re only halfway through on that one.”Despite the lack of publicly available accounting on some of these contracts, the department was looking at what the payments were for. Carvalho said his team and state officials meet weekly to review expenses on projects.Yang was the subject matter expert on the kauhale initiative, Campos said, which is why he was deeply involved in reviewing invoices.In one instance, Carvalho emailed Yang on Sept. 13 to check on reimbursements for money spent on kauhale in Kahului and Iwilei, as well as other projects in Kāneʻohe and Kalihi.“Would you mind helping me to track these down?” Carvalho wrote.Yang replied a few hours later, telling Carvalho to have staff prepare payment request forms. Yang even checked in with Campos’ secretary, asking her to forward other invoices for payment.He asked Carvalho to send a coversheet and a payment form for HomeAid’s 43-unit kauhale in Iwilei.“We will process the check for $2.5 million,” Yang wrote.HomeAid sent the state an invoice a week later. HomeAid’s Iwilei contract requires it to provide an itemization of expenses, timesheets or receipts. But there are no supporting documents to show how HomeAid spent the money on the Iwilei kauhale.Instead, there is merely a description in the invoice summarizing work performed, including erosion control, installation of a dust fence and barriers, construction and environmental services and site work. None of these costs are itemized, and there’s no accounting for what was paid to various subcontractors.Campos explained that those were upfront costs that wouldn’t necessarily be accounted for at this stage. Once projects like the Iwilei kauhale are completed, Campos said the public would be able to review the audits on those projects’ costs.Carvalho acknowledged that HomeAid is behind on providing invoices for the Iwilei project.“It doesn’t mean that the state’s not aware of what is being billed every month,” he said. “There’s still at least some accountability along the way.”The state also couldn’t provide documents concerning two newer projects. HomeAid was given a $6.7 million contract in November to complete the second phase of a kauhale on Middle Street. It called for up to 30 housing units, in addition to the 20 already at the site.In December, HomeAid was given a $7.9 million contract for a kauhale project in Kahului.Both contracts called for $1 million to be paid to HomeAid up front. HomeAid was required to account for those expenses, according to the contracts. The contracts also say that subsequent payments would be made in monthly installments after submission of invoices and supporting documentation.Asked about the status of those projects and records detailing spending, Carvalho said that work has just recently begun on both of those projects.“There hasn’t been a lot of work to spend on,” he said.
‘Where Is The Accountability?’
Lawmakers have also had a hard time getting details about HomeAid’s work on other housing projects.Rep. Elle Cochran, who represents Lahaina, has asked DHS for documentation concerning construction of Ka La’i Ola, a village of temporary homes for fire survivors in her district. The project cost $185 million, or $411,000 per home, including massive infrastructure improvements for the land, which will later be used by the Department of Hawaiian Home Lands. The project opened in January.Cochran said she asked for documentation called for by DHS’s construction contract with HomeAid, including interim reports and a final accounting for the project. Emails from Campos to Cochran show the agency is still working on her request.Regardless of the emergency proclamation suspending the procurement law, Cochran said it’s fair to ask for an accounting now that Ka La’i Ola has been built.“If this type of money has been expended and given, then where is the breakdown? Where is the proof? Where is the receipt?” she asked. “Where is the accountability?”This story was originally published by Honolulu Civil Beat and distributed through a partnership with The Associated Press.Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Photos You Should See - Feb. 2025
