Five Months After the Fire: Five Takeaways from Maui’s Recovery

1. Survivors still need stable housing while Lahaina rebuilds.

As of December 15, about 6,000 survivors were living in hotels, a number FEMA says is dynamic and changes daily. Due to the shortage of available homes, finding stable, medium-term housing for survivors to transition into after they move out of hotels is a pressing challenge, as Lahaina could take years to rebuild its housing stock. According to the American Red Cross, the average cost to house a family through the Non-Congregate Sheltering program on Maui is approximately $1,000/day (including meals and administrative costs). Some survivors staying in hotels have had to relocate multiple times, adding to their turmoil and making it difficult to get back on their feet.

Only a very small number of survivors have been able to utilize FEMA’s rental assistance to secure long-term housing because of the lack of available rental units. Meanwhile, some survivors relocated out of Hawai’i in their search for housing.

One potential source of housing for survivors is short-term rentals (STRs). There are more than 12,000 STRs on Maui, by one estimate, though as of late November only a few hundred were staying in STRs. In December, FEMA issued a press release offering to pay “fair and stable” compensation to STR operators housing survivors, and is working to secure more long-term rental housing options for survivors currently in hotels to move into. The Maui County Council has also considered tax incentives for STR operators to house survivors and a moratorium on STRs. However, concerns remain about whether STR operators will be persuaded to house survivors and the proposed moratorium could face legal challenges.

Promisingly, the state of Hawai’i, county of Maui, and a group of philanthropic organizations recently partnered to announce a $500 million plan to provide stable housing for a few thousand households, with 18-month commitments for each household by July 24, 2024.

2. Maui faces a broader long-term housing crisis.

Even before the fire, Maui faced a severe housing crisis. Maui needs to rebuild its lost housing stock and dramatically expand its supply of affordable housing. Hawai’i has the highest median home value in the nation, as well as the fourth highest level of homelessness. Since 2000, Maui has experienced over 300% price growth in homes. Many locals working service jobs, particularly in the tourism industry, do not make incomes that can meet such high housing costs. In Maui County, more than 50% of renters are cost-burdened (paying over 30% of their income on rent) and nearly 30% are severely cost-burdened (paying over 50% of their income on rent).

Constructing new homes on the island is slow and difficult, in large part due to regulatory hurdles, according to Justin Tyndell, an economist at the University of Hawai’i at Mānoa. Restrictive zoning rules, multiple levels of review, ease with which local residents can block new projects, ecological and cultural preservation requirements, and strong affordable housing requirements can all make it more costly and difficult to build new housing. In fact, research from Tyndell and colleagues found Hawai’i to have the have the most restrictive local housing regulations in the nation, with Maui as one of the most restrictive counties.

Many locals are worried about “gentrification by fire,” a process where local prices rise because of the reduced housing stock—a common result when natural disasters occur. Even before the fire, many Native Hawaiians had left Maui and Hawai’i due to high housing costs. In 2020, 47% of Native Hawaiians lived in Hawai’i as opposed to the continental U.S., down from 55% in 2010.

3. Infrastructure needs to be rebuilt and enhanced.

In addition to housing and property destruction, Maui experienced severe damage to its critical infrastructure. For example, more than 2,200 water service lines were damaged. Rebuilding all of the water infrastructure could take years and cost much as $80 million, according to a local official’s estimate. Beyond restoring clean and safe water service, Maui’s water infrastructure demands modernization to enhance future resilience and capacity.

During the wildfire, Lahaina’s water system failed to produce enough water in fire hydrants for firefighters to tame the fire. When properties were damaged, water was released from melting pipes, depressurizing the level of water for hydrants. The water failure during the wildfire brought attention to broader water infrastructure challenges on the island.

According to FEMA, severely limited water, sewer, and other critical infrastructure capacity is a major barrier to supporting housing development, compounding challenges to build up the supply of affordable housing. In the Lahaina area specifically, the underground aquifer that served residents was oversubscribed prior to the fire, according to state data, and the viability of the aquafer is a factor limiting additional housing development (though previously existing units that are rebuilt would have “grandfathered” access).

4. Unemployment has risen as tourism has dipped.

More than 800 businesses and the major tourist hub of Lahaina were impacted. According to the Bureau of Labor Statistics, the unemployment rate was 6.2% in November 2023, up from 2.5% before the fire,  This is largely due to the decline in tourist travel to the island after the fire. Prior to the fire, tourism contributed to about 40% of the island’s GDP, but businesses that serve tourists have had to cut back on staff with fewer visitors.

While bringing back tourism will support employment and economic activity, with a limited stock of housing and hotel units, there is a tension between housing survivors and providing lodging for tourists. Attitudes towards reviving tourism are mixed—while many workers in the tourism industry are supportive, many residents are frustrated about the return of tourists while survivors deal with trauma and lack stable housing.

Across the state, many residents feel the tourism industry doesn’t fully support Hawaiians: According to a 2023 survey, while 67% of state residents view the tourism industry in Hawai’i favorably, 67% also feel that their island is being run for tourists at the expense of local people. This may reflect that, while the tourism industry provides jobs, wages are low relative to the high cost of living. Indeed, while unemployment was low in the months before the fire, the percentage of households in Maui below the poverty line still rose from 6% in 2018 to 16% in 2022.

5. Survivors are dealing with profound trauma.

In addition to physical and economic needs, Maui residents are also dealing with the trauma associated with a catastrophic natural disaster. Mental health—for both survivors and leaders of recovery efforts—is an important component of disaster recovery. Many survivors have described having trouble leaving their homes and returning to work, suffering from survivor’s guilt and traumatic flashbacks.

Trauma makes it difficult for individuals to navigate federal assistance programs to access federal resources to address housing and property damage and other disaster-related costs. Recovery efforts must keep the trauma of impacted communities in mind. Beyond providing mental health services, recovery efforts require reaching survivors who may have limited wherewithal, providing case management to help survivors manage their recovery journeys, and removing hurdles to accessing assistance.

Conclusion

Maui has a long road ahead as it transitions from short-term disaster response to long-term disaster recovery. With a budget shortfall of over $31 million due to a decrease in property taxes from damaged homes, the county has limited capacity to manage a massive rebuilding effort on multiple fronts.

Federal support will be essential for Maui’s successful recovery. HUD’s CDBG-DR program will be a critical tool for meeting long-term housing and infrastructure needs, not only to provide survivors a place to live with water access, but to rebuild thriving communities where locals can afford to live and prosper. With sufficient federal resources, Maui can rebuild Lahaina while investing in housing and infrastructure to better meet future generations’ needs.

This blog is informed by BPC’s participation in a December delegation to Maui organized by After the Fire, a non-profit organization created by wildfire survivors and experts to support communities as they prepare for wildfires and recover, rebuild, and reimagine a more resilient future after a wildfire.