How would I create this as a Homebrew Race Trait?

Woody Patch

As an action you may tear off a branch from your body and use it to repair another broken object made of wood.  This patch may not exceed 5 square feet. You may use this ability again to join multiple patches together.  Each time you use this ability, your Hit Point Maximum is reduced by half your level rounded down.  Finishing a long rest reduces this penalty level by 1.  

You say you tear off a branch from your body to repair "another" broken object made of it. WHat "other"? You've not referenced a broken object made of wood yet so why are you saying "another"?

What patch or patches are you talking about? Does the branch transform into a patch, how does this patch fix a broken object? Like if half the table was missing, how would this patch become half a table? You also say the patch is up to 5 sq ft. is that based on how big the branch was - because characters with 5 ft branches (presumably multiple since this can be used multiple times [even infinitely at 1st level, see below]) would have to end up being Huge.

As you say this is a racial ability, the "half your level rounded down" means a 1st level character can use this infinitely without any affect to their hit point maximum because half of 1 rounded down is 0.

You say finishing a long rest reduces penalty level by 1, but no penalty levels are introduced. The only restriction is reduction to HP Max but regaining 1 HP Max per long rest means it'll take days to weeks to recover from a single use. Which kinda makes it pointless.

Helping you figure out how to set this up is going to be difficult when it makes no sense at all and don't actually know what it does or what limits it has. This really needs to be reworked into something sensible and clear.

I also wonder what benefit would doing this in battle be? If it has no use in battle then there is no need to specify that I takes an action to do, and if there is no action tied to it you can just have it in the description and not have to have anything mechanical as a part of it. 

I would also recommend that you have this moved into the Homebrew section of the forums. They have many guides and many people there could help you greatly. 

Lets not pick apart the non important part of the Ability.  I'm asking about the mechanics of how to get it into my Home brew Racial trait.  The text matters not, and will be edited on my end

It’s hard to tell you how to program what we don’t exactly understand.

I’d like Tom make an ability that accumulates a penalty that is refreshed at a long rest

call that penalty exhaustion 

but I want to be able to click on the ability (it’s not limited)and have it automatically add a penalty

I’d settle for exhaustion but I’d rather customize the penalty 

so. 
Something liek

cast a spell to make something happen (theater of the mind) and it causes a level of exhaustion every time you cast it 

Ahh, that is currently not possible. In fact, even if you click on the exhaustion levels, they don’t actually impose any incrementally increasing penalties either. In fact, none of the conditions actually apply any temporarily applied effects to the character sheet. That’s because they haven’t figured out how to apply any temporary/modal/toggleable/whatever effects yet. All of that still has to be tracked manually by the player, all those things do is track if it’s on or not so the player knows what to apply against themselves. Even Rage doesn’t actually “do” anything to the character sheet when it is used, it just tracks how many times it’s been used.

Makes sense..thanks