Hawaiʻi County community land trust gives families new pathway to home ownership

A newly built 3-bedroom, 2-bath, single-family home in Volcano now is for sale for only $325,000, about a third below market value because it is part of Hale O Hawaiʻi County, a nonprofit community land trust that officially launched in 2022.

The community land trust acquires or develops affordable housing by separating the land value from the house value and then selling only the home while forever keeping ownership of the land in the trust.

The homebuyer, who must meet income and other requirements, acquires title to the home and receives a 99-year renewable lease and exclusive use of the land, which can be sold or inherited by family members. The cost of the land is reduced or eliminated, making the housing more affordable for generations.

“Our mission is to create opportunities for working families to own homes, build wealth and stay rooted in our community,” said Pete Hoffmann, a former Hawaiʻi County councilmember who started the trust.

Hoffman shared his vision of building a community land trust, similar to Nā Hale O Maui on Maui, during his time on the council between 2004 to 2012. But at the time it didn’t garner much support.

“There weren’t many people enthusiastic to work with community land trusts, and I still don’t completely understand why,” Hoffman said. “So after I left the council, I decided to do this on my own.”

He based the trust on Nā Hale O Maui, which started in 2006. In 19 years, the community land trust has created and sold 37 single family homes across Maui.

“I wasn’t interested in reinventing the wheel when another island was already doing this successfully,” he said.

According to Hoffman, Mayor Mitch Roth’s administration was the first to support the community land trust idea for affordable housing and now new Mayor Kimo Alameda’s administration also has been supportive. This gives more opportunity for partnerships between Hale O Hawaiʻi County and the county’s Department of Housing.

The nonprofit has acquired land from county grants, donations from private collaborators, donations from individuals and discounted rates from other partners. After the land purchase, Hale O Hawaiʻi gets donations together to start the build with a construction team and volunteers.

Hale O Hawaiʻi sells homes to families for about a third or more below the regular market price since the land is not included.

In 2022, Hale O Hawaiʻi completed and sold its first home, a two-bedroom, one-and-a-half-bath home on 1 acre of land in Hawaiian Paradise Park in Lower Puna for $300,000.

In 2023, a fundraising project and a grant from the county helped them start construction of two single-family properties in Hilo and Volcano.

A family has been accepted to move into the Hilo home, located in the University Heights neighborhood, if they can close with their mortgage lender for the home that is valued at $608,000 but will only cost them about $325,000 due to the land arrangement.

Applicants have to acquire their own mortgage lender, but Hale O Hawaiʻi helps them with their search.

“That is a big barrier for some applicants is finding a mortgage lender that will accept them at an area median income of 60% to 140%, which is required for the land trust,” Hoffman said. “We have found that we canʻt find many people in that bracket who have the mortgage capability above $325,000. At this price, we are not making a profit and will sometimes take a loss, which we are comfortable with as long as we find a family qualified to move into the home.”

For example, the Volcano home now for sale cost the trust $340,000 to build, about $15,000 more than the asking price, Hoffman said.

The requirements for homebuyers include:

• Earn at or below 140% of area median income
• First-time homebuyers or haven’t owned a home in the last three years
• Can qualify for a mortgage with a local lender
• Are committed to staying in the community and keeping housing affordable for future generations

He said the couple with two kids who may move into the University Heights home are ideal candidates.

“They have been renting for years but haven’t been able to save for a home,” Hoffman said.

The organization is still taking applications for the newly finished house in Volcano, which has had fewer applicants since it’s farther away.

“A great part of this opportunity is that homebuyers get a brand new house from the foundation, but pay far less for it,” Hale O Hawaiʻi Development Director Jacqueline Mylroie said. “It is something they can own, use, pass on, or sell. “With the land trust, if prices skyrocket at some point, this house will remain affordable forever.”

She said this makes it possible for low- to moderate-income level families to no longer have to rent.

According to Mylroie, Hale O Hawaiʻi has been successful in getting grants from foundations and the county, but it takes a village. The organization is seeking volunteers, people interested in private lending, and anyone willing to support this endeavor.

“With the rising cost of living and a shortage of affordable homes, the need for sustainable housing solutions has never been greater,” Mylroie said. “When we help one family, we help the community feel more secure.”

To apply for homeownership, to donate, or to learn more about community land trusts, visit the Hale O Hawaiʻi website.