Mayor Kirk Caldwell says dealing with Honolulu's housing crisis is one of his top priorities. But at the same time, the city just lost millions of dollars for housing programs and need-based rental assistance.
Hawaii News Now has learned the city missed deadlines to spend almost $10 million, and the federal government has already taken some of it back.
Federal officials say over $2 million has already been lost in federal funds, and another $7.5 million is at risk. All the federal money is intended to serve Oahu's low to moderate income population.
"The objective I think for just about every government agency is to receive the money, put it to good use, and expend it before you lose it, so any time we see loss of federal funds in particular, it's surprising to us," Ryan Okahara, the Honolulu Field Office Director for the U.S. Department of Housing and Urban Development, said.
Each year the city receives millions in federal grants from the U.S. Department of Housing and Urban Development (HUD). There's a deadline to spend that money under the HOME program, which HUD says, the city missed this year.
The money could've gone to for affordable housing or rental assistance, like Section 8.
Okahara says the city only spent four percent of the money it was given.
“The city has had challenges from time to time on spending money on initiatives that require close and significant coordination with the private sector. This occurs when there are delays in getting projects started, especially when third parties are involved," city Managing Director Roy Amemiya Jr. said.
HUD officials also say the city missed another critical deadline for HUD's Community Development Block Grant (CDBG) program that could lead to another $7.5 million being lapsed.
"The city struggled to meet timeliness requirements on CDBG as well. We're awaiting a decision by headquarters HUD on exactly how much Community Development Block Grant funds will be lost," Okahara said.
The loss of funds has some council members upset.
"It's a lot of money," said Council member Kymberly Pine, the Chair of the Council's Committee on Zoning and Housing, "It's extremely disappointing because we are 24,000 homes short to help our local people here on the island of Oahu and that money could've been used by those people who are suffering."
The loss is also felt by Oahu's non-profits.
"It's absolutely heartbreaking. Hawaii can't afford this. We're in the middle of a housing crisis," Gavin Thornton, the Co-Executive Director of the Hawai'i Appleseed Center for Law and Economic Justice said. "We really need to be running as efficiently as possible. We can't afford to be throwing away resources."
This isn't the first time the federal government has been critical of the city's handling of federal grant money.
The city was warned about mishandling federal block grants a year ago.
Last August, an audit by the U.S. Office of Inspector General found that "the city did not have an effective grant administration structure in place,"and that, "The dysfunction and inefficiency caused the city to be repeatedly at risk of failing the HUD timeliness test."
"Going forward, the city’s new action plan focuses on spending these federal funds on qualified, shovel-ready city projects that improve community facilities in targeted income areas. The city continues to work with HUD and it’s our hope that all of the grant money will be retained,” Amemiya said.
HUD will soon decide how much of the $7.5 million to take back, Okahara says, leaving some feeling like sitting ducks.
"At this point, it's out of the city's hand and it's at a decision point with HUD Headquarters." Okahara said.