After three years and more than $40 million spent to build emergency and transitional shelters along the Wai'anae Coast — the region hardest hit by Hawai'i's homelessness crisis — the three-phase effort to solve the mounting problem has been stalled by the economic downturn.

"The budget crunch taken together with the drying up of the credit market has had an effect on our affordable housing timeline," said Russ Saito, the state's homeless solutions coordinator.

But Saito insists that homelessness remains a top priority for the Lingle administration, and he says the state Legislature appears to be sympathetic to funding ambitious plans to ease the main obstacle to curbing homelessness: a lack of affordable housing.

"The Hawai'i Housing Finance and Development Corporation is committed to having as many of its 5,000 housing units built as the funding allows and developers are willing to build," Saito said. "The bottom line is that we cannot forget about the plight of Hawai'i's homeless population no matter what the local or national economic news may be. The shelter-to-affordable-housing timeline may be set back but the plan is still operable."

The state had wrapped up its shelter building on the Wai'anae Coast when the global economic meltdown kicked into high gear. Back in July 2006, Gov. Linda Lingle signed an emergency proclamation allowing the state to accelerate the building of a homeless shelter system in the region.

The three-phase plan began with a quickly erected, round-the-clock emergency homeless shelter in Wai'anae to house hundreds of beach dwellers living on the coast. As more homeless people moved through the emergency shelter, area beach parks were evacuated and cleaned. Mandatory treatment programs were designed to help shelter residents learn how to return to the social mainstream and find work.

From there, homeless families would enter and pay for transitional shelter lodging in the area. After up to two years, those homeless residents were expected to be ready to move on their own into affordable rentals and housing.

One person who has been part of the system from it's beginning is Alice Greenwood. Greenwood became homeless for the first time when the owner of the home she had lived in for 30 years sold the place the same month Lingle signed the emergency proclamation.

Overnight the Ma'ili resident found herself living in a tent on the beach with her 6-year-old adopted son, Makalii. At age 60, with $20 to her name, Greenwood, who is pure Hawaiian, embarked on a bewildering, often frightening, quest for survival.

In March 2007 she was among the first to enter Pai'olu Kaiaulu, the all-emergency homeless shelter. In December 2008 she was the first person to segue from the emergency shelter to Ulu Ke Kukui, the state's new $14.5 million transitional shelter in Ma'ili.

Although the shelter system has been vexing and difficult at times, Greenwood firmly believes it works.

"Even though the rules sometimes didn't seem to make sense, the shelters offer stability," she said from the comfortable, breezy, one-bedroom apartment where she and Makalii now live. "The system offered hope for people who had given up on themselves."

But Greenwood, who is disabled, knows her journey is not finished. Transitional housing is temporary. And she doubts her own limited income from welfare will be enough to meet the monthly payments of an affordable rental.

That's if she can even find such a place.

Saito says the time has come to get innovative.

"Because of the budget crunch," Saito said, "we're not automatically assuming we're going to get all of the money we want from the Legislature. We need to find different sorts of solutions for the problem. Sometimes obstacles force you to find even better solutions."

He keeps his eyes and ears open for ways the state can partner with private agencies and nonprofit organizations to offer relief for the homeless.

"An example might be if we had 5 acres of perfectly good, flat land in an area that's fairly close to the homeless population, and it's close to infrastructure. Would we be willing to partner with someone to create a (homeless) campsite? Those are the kinds of things we've talked about."

Such concepts haven't gone beyond the talking stage, he said. But they illustrate possible strategies when budget money is hard to come by.

Saito isn't the only one who has been thinking lately. Shannon Hayes, site director of Pai'olu Kaiaulu, said residents at her facility have been anxiously pondering their plight as well.

"Many feel uneasy and uncertain about what their future holds," said Hayes. "More pressing is the fear of shelters closing as a result of budget cuts."

But Saito said he has heard of no plans to cut funds for operating shelter facilities.

Throughout Hawai'i, the state sponsors 47 shelters on an annual budget of more than $14 million. In February, a total of 3,781 people were served around the state.

"As far as we know, the funding levels will remain the way they are right now," Saito said.

Still, homelessness remains a major problem, he said. And he reiterated that the biggest dilemma is a lack of affordable rentals and houses. In the past, developers have resisted affordable housing because there was more money to be made in luxury and high-end homes. Now that the state is in the midst of a financial meltdown, Saito said developers aren't building much of anything.

He hopes the five-year plan to help developers finance some 5,000 affordable dwellings will offer enough motivation.

How much the state housing finance agency actually gets is up to legislators, but Saito is optimistic that it could receive most if not all of the $50 million asked for in fiscal 2010 for affordable dwelling and rental units.

"So it looks like the Legislature is sympathetic to the plight of the homeless, at least for affordable housing," Saito said.

That could be good news for folks such as Greenwood, who will be leaving the shelter in the coming months.

"I learned that we are people, and that we all need each other," Greenwood said. "And even though there were people struggling out there, I feel I was blessed to be among them. When I was down and out, these people I had criticized before I became homeless were the ones who were there to help me."