More than 100 years ago, Congress passed the Hawaiian Homes Commission Act of 1921 — a promise to set aside 200,000 acres of land for Native Hawaiians at $1-a-year leases. For most of the century since, the territory and now state of Hawaiʻi has treated that promise as a suggestion, despite it being federal law and enshrined in the state constitution.

Today, nearly 30,000 Native Hawaiian families sit on a waitlist for what was promised — what is owed. Most have waited decades. Too many have died waiting.

The Department of Hawaiian Home Lands, charged with fulfilling that promise, has been criminally underfunded for years, forced to beg the Legislature for money annually with no guaranteed funding source.

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Now the federal lifeline is evaporating. The Trump administration’s proposed fiscal year 2027 budget would eliminate the Native American Housing Block Grant, which includes the Native Hawaiian Housing Grant — a critical source of funding for DHHL. In Hawaiʻi, that program has helped build or renovate thousands of homes. Cutting it would devastate an already struggling system and push the waitlist even further out of reach.

The Hawaiian Homes Commission Act was restitution: partial and imperfect, but legally binding. When Hawaiʻi became a state in 1959, the Legislature didn’t just inherit that obligation — it embedded it into the constitution.

Courts have since made clear that the Legislature has a fiduciary duty to fund DHHL sufficiently to carry out its mission. With Washington turning its back, that duty is no longer just constitutional. It is existential.

Yet the Legislature has throttled DHHL’s ability to deliver with only unpredictable, piecemeal funding. Some point to a one-time $600 million appropriation in 2022. But that was once — and produced only 2,500 lots, largely because DHHL must fund its own infrastructure.

Plans stall. Cycles repeat. The central problem remains: the agency entrusted with a congressional mandate and constitutional obligation has no permanent revenue stream.

A Simple, Elegant Fix

This year’s Legislature can begin to right history’s wrongs. Senate Bill 3028 does something long overdue: it gives DHHL a permanent, dedicated revenue stream of up to $60 million per year, funded by restructuring the state’s conveyance tax — a one-time fee paid when property is sold.

Hawaiʻi’s current conveyance tax is laughably low: between 0.1% and 1.25% of a transaction’s value.
Meanwhile, owners of multi-million dollar estates pay the same tiny rate as everyone else. In Seattle and San Francisco, rates range from 2% to 7%.

We have some of the world’s most expensive real estate and some of the cheapest transaction taxes to match. That starves our communities of badly-needed resources.

SB 3028 converts the flat rate to a marginal rate system — the same fair logic as our income tax. Sellers pay the higher rate only on the amount over each threshold. A middle-class family selling their median Oʻahu home (around $1.1 million) would likely pay less than they do now. The seller of a $25 million beachfront property in Lanikai pays meaningfully more, and only on the portion over $2.2 million.

This is not a burden on local families. It is a targeted, proportionate ask of those who have profited most from our islands’ scarcity — often wealthy non-residents using Hawaiʻi housing primarily as an investment, not a home. The estimated additional revenue: more than $100 million annually.

Stable revenue doesn’t just build homes. It allows DHHL to leverage private and federal capital and invest in infrastructure. Consistent annual funding enables multi-year planning and makes a real dent in the waitlist. DHHL Director Kali Watson calls this “the most important bill for us at the Legislature.”

But the impact goes further. This bill directs increased funding to the Rental Housing Revolving Fund for affordable rentals, the Legacy Land Conservation Fund to preserve and protect ʻāina from development, and the Dwelling Unit Revolving Fund for infrastructure in transit-oriented development areas. It ensures that when luxury property changes hands at record prices, our community receives a fair share to invest in itself.

A Chance To Lead

The bill will likely head to conference committee. The obligation is constitutional. The federal safety net is collapsing. $60 million a year will not close a 30,000-person waitlist overnight. It is not reparations for a century of broken promises and intentional neglect.

But it is a meaningful step toward making a constitutional trust function. With new federal cuts from the Trump Administration looming, it is now essential.

Hawaiʻi has had a Democratic supermajority for decades — House, Senate, governor’s office. Democrats have long championed housing as a human right, environmental justice, and the healing of historical wrongs. This bill puts those professed ideals to a simple test.

Here is the question that supermajority must now answer: Will you lead a Legislature that finally stops asking Native Hawaiians to wait another generation for what they are owed?