A year after the Maui wildfires, are new housing policies keeping locals housed?

In an aerial view, lots that have been cleared of wildfire debris and covered in gray gravel, are seen as vehicles pass along a newly reopened stretch of Honoapi'ilani Highway on August 03, 2024 in Lahaina, Hawaii.

In an aerial view, lots that have been cleared of wildfire debris and covered in gray gravel, are seen as vehicles pass along a newly reopened stretch of Honoapi'ilani Highway on August 03, 2024 in Lahaina, Hawaii. Mario Tama via Getty Images

 

Connecting state and local government leaders

Hawaii has adopted several laws to head off disaster gentrification and ensure affordable housing is available to local residents. The nation is watching to see how those efforts play out.

A year ago, one of the country’s deadliest fires in history ripped through the Hawaiian community of Lahaina in west Maui, reducing more than 2,000 structures—mostly homes—to ash and killing 100 people.

Today, the famed Banyan tree scarred in the wildfire appears to be recovering, and while debris is still being removed, contractors are starting to pour the first concrete foundations for new homes as the community, county and state embark on an ambitious plan to rebuild and avoid an all-to-common reality in the aftermath of these types of tragedies: disaster gentrification

Hawaii is home to some of the country’s most expensive real estate; the average cost of a home in Maui is just over $1 million, driven up by a limited housing stock and demand for vacation rentals. Locals were being priced out of their neighborhoods long before last year’s fires, but many are concerned the disaster will accelerate the process, said Autumn Ness, a Maui resident and executive director of the Lahaina Community Land Trust.

“Knowing what Lahaina real estate is like, we could see … [this fire] as a force of mass displacement of native Hawaiians and generational Lahaina folks,” she said.

Over the last year, the county and state have gone to great lengths to prevent that and ensure affordable housing is available for survivors of the Maui fires, as well as longtime residents of Hawaii. As housing costs reach all-time highs throughout the U.S., the experiment is being watched closely by housing officials across the country.  

In particular, new legislation in Hawaii that gives counties the power to ban short-term rentals has garnered the most attention. 

Maui officials earlier this summer announced a proposal to phase out more than 6,000  of these units—nearly half of all vacation rentals on the island. Of all the units the policy would affect, about 85% are owned by people who live out of state, according to Justin Tyndall, a researcher at the University of Hawaii Economic Research Organization. Prohibiting those units from operating as short-term rentals could expand the island’s long-term housing stock by 13%. And given that the high prices in Maui are largely driven by demand from vacation operators, the prices of these units would likely drop below that $1 million average if they’re converted to long-term housing. 

“I don't think we should have the expectation that this is going to single-handedly solve the housing crisis,” Tyndall said. But the units are “going to be cheaper than they were. So, to me, that's progress.”

It’s difficult to get a clear picture of how the policy will shake out.

Tyndall warns, for instance, that the ban could result in the loss of tens of millions of dollars in tax revenue. He also says that the absence of short-term rentals could be a boon for local hotels, and the county could see increased revenue from those businesses. It’s unclear what effect the ban will have at this point.

Initiatives in other states have sought to convert up to 2% of short-term rentals. But to convert nearly half, Tyndall said, is unprecedented.

There’s been other big legislation in Hawaii that aid the rebuilding process. Counties now have more power to approve adaptive re-use of commercial spaces, and a new law allows for up to three accessory dwelling units per property. Increasing density is a powerful way to bring down housing costs, but in an environment where it can take years to secure a building permit, it’ll likely be a while before communities see the benefits of these policies. 

Still, it’s important not to rush the process, said Karl Fippinger, vice president of fire and disaster mitigation at the International Code Council. It’s becoming more common for wildfires to spread into suburban and even urban neighborhoods where flames can easily leap between buildings, he said. That underscores the need for communities like Lahaina to adopt modern fire codes to mitigate future loss and rebuild with fire resistance in mind. 

“This happens in every wildfire disaster: There's this race to rebuild because the community's so concerned for everyone that lives there. We want to get people back on their property and roofs over their heads,” he said. But “those folks deserve better than to potentially repeat the same mistakes that happened before.”

Meanwhile, Lahaina survivors are struggling and disaster gentrification remains a very real threat.

“I don't know if people that are far away appreciate the fact that the debris is still being cleaned up,” said Ness of the Lahaina Community Land Trust. “We're still very much in the beginning stages of this.”

For many households, the long, arduous process is only just beginning, and not everyone is willing to see that process through. Some Lahainans are starting to sell their properties, Ness said, and she’s seen some listed for hundreds of thousands of dollars over their assessed value with realtors marketing them to wealthy buyers from out of state. 

“Individual homeowners and families don't stand a chance against all that off-island wealth,” she said. “But together we do.”

Ness and other community members established the trust in November to “keep Lahaina lands in Lahaina hands.” The nonprofit aims to help struggling Lahainans stay on their properties by connecting them with resources or providing financial support. Property owners who still decide to sell can sell to the land trust, and the nonprofit will own the land the home is on but not the home itself. This helps reduce costs for buyers, and the land trust can ensure those buyers are local. 

Public investment in land trusts could go a long way, Ness said. Governments should reconsider how they’re using affordable housing funds. For instance, Ness said, many counties and states offer developers subsidies and tax credits to build units that are affordable for a set amount of time, often anywhere from 10 to 30 years.

“We're putting hundreds of thousands of dollars of investment into housing units that aren't affordable for more than 10 years,” Ness said. “The land trust model is going to allow us to put investments into homes that are going to end up being affordable and reserved for Lahaina residents forever.”

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