Prices of burned-down properties in Lahaina spark conflict between land trust, sellers

When the smoke alarm blared and their neighbors’ homes started catching on fire the night of Aug. 8, 2023, Rick and Judi Kimball got in their car and fled their Lahaina home of 16 years.

After pushing through the smoke-filled darkness to the evacuation shelter at Maui Preparatory Academy, the Kimballs, both in their 80s, resolved that if the fire burned down their four-bedroom house on Lokia Street in Wahikuli, they weren’t going back.

“We just decided that at our age, we were going to be nothing more but a drain on the resources of Maui County,” Rick Kimball said. 

A year later, the Kimballs became the first residents to sell their burned property to the Lahaina Community Land Trust. The nonprofit was created after the deadly wildfire with a goal of purchasing destroyed properties from Lahaina residents who weren’t going to rebuild but didn’t want their land to end up in the hands of off-island buyers. 

Land grabs were a major fear in the weeks after the fire. Residents posted hand-painted signs declaring “Lahaina is not for sale.” Gov. Josh Green signed an emergency proclamation, which remans in effect, that prohibits unsolicited offers for properties in Lahaina. But it hasn’t stopped investors from trying. 

And as more lots are cleared of fire debris and go on the market, land trust members are concerned that some of the listing prices have been higher than the pre-fire value of the land, which they feel will make it even more likely the land will be purchased by wealthy investors outside of Maui.

“The scary thing is, if they are successful, they’ve now set a comp (home price comparison) that is going to influence future appraisals, and that’s what’s going to start the ratcheting up of the land value in Lahaina again,” said Carolyn Auweloa, the land trust’s chief operations officer. “We refuse to pay those inflated prices ‘cause we don’t want to contribute to that problem.” 

But for some property owners, just the decision about whether to sell has been difficult, especially for families who are struggling to pay for mortgages on homes that burned down. While there is a moratorium on Maui foreclosures in some cases, it is slated to end on Jan. 1. They say they need to recover and have enough money to move on.

“Anyone from Lahaina or West Maui has loyalty and they don’t want to be bad-mouthed because they have to financially make a choice to sell,” said Realtor Miranda Watson of Keller Williams Realty Maui.

BEFORE RESIDENTS TRY TO SELL, LAND TRUST WANTS TO HELP THEM STAY 

The land trust began in November amid community concerns that outside developers would snatch up Lahaina lands. 

The first of its two strategies is providing insurance gap support through a pilot program funded by a $3.5 million Maui County grant.

“When somebody calls me and they say, ‘I want to sell,’ I don’t say, ‘how much?’” said Autumn Ness, executive director of the trust. “I ask why, then I do this checklist of things. I make sure, hey, have you gotten help renegotiating your mortgage? Have you appealed your insurance settlement? What’s your situation with SBA loans? … People think they need ‘X’ amount of money, but if you offer them other wraparound services, they need less.”

Participants first work with Hawai‘i Community Lending to go over resources and decide if the gap funding program is right for them. Eligible residents can receive land trust grants to help rebuild their homes provided they agree to a perpetual “kama‘āina easement,” which requires that the property be owner-occupied and that if it’s ever sold, it goes to a longtime Lahaina resident.

The land trust’s second strategy is securing land, backed by an initial funding package from the county of $11.5 million, including $5 million each from the Open Space and Managed Retreat funds and $1.5 million from the Affordable Housing Fund. Another $1 million has been collected through donations. 

When the land trust acquires property, it will keep the land in perpetuity and build homes on top that can be sold to residents at affordable prices. In exchange, residents agree to a ground lease that keeps home appreciation growth to a certain percentage each year. Homeowners won’t “get super wealthy by flipping a land trust home,” but they will have an affordable mortgage, as will future buyers, Ness said.

“A lot of naysayers for the community land trust talked about how you cannot build generational wealth with this kind of model, but we’re trying to push back to say that Lahaina’s generational wealth is very different,” Mikey Burke, president of the land trust board, said at the county’s weekly meeting at the Lahaina Civic Center on Aug. 14.

She explained that many ‘ohana working three or four jobs can’t afford a $1 million home, but if the trust owns the land, it could cut that mortgage in half.

Ness said the land trust is also interested in buying shoreline properties that could be kept in conservation to prevent unwanted development in sensitive areas, as well as commercial spaces that could be leased to local businesses and make the trust more self-sustaining. 

Burke, who also lost her home in the fire, said if residents have exhausted all their resources and still feel like they can’t afford to keep their property, they should call the land trust.

“We want to keep you here, but if we cannot keep you here, then we want to be your first choice in who you’re going to sell to,” Burke said. “And then if it ends up that we cannot make that, and you’ve got to go into open market, that’s understandable, too. But at least you gave us a chance.”

PTSD, HIGH COSTS PUSHING OWNERS TO SELL 

The 4,082-square-foot property at 353 Aulike St. in the Komohana Hale subdivision is advertised as a “fantastic leveled lot in the heart of Lahaina.” Photos on Redfin show red-painted block walls surrounding a concrete driveway and a gravel lot where a home once stood. 

Maui County property tax records show the property’s total assessed value in 2023 was $519,700 — $346,800 for the land and $172,900 for the building. The now-vacant lot is listed for $540,000, which strikes at the heart of the dispute — the land trust thinks the lots where homes have burned down shouldn’t be selling for more than the assessed value of both the land and the house.

Watson, who represents the owners, said the listing price accounts for “simple supply and demand.” After the fire wiped out more than 2,200 buildings in Lahaina, there are even fewer homes and properties for sale. 

“Lahaina was extremely inflated before the fire,” Watson said of home prices. “So with most of the town gone, why would they expect anything different now? And why would they expect someone who is selling to not want to get the most they can possibly get so that they can move forward?”   

Searches of Zillow, Redfin and the Realtors Association of Maui website as of Thursday show just 11 active listings, including five destroyed properties, in Lahaina’s burn zone from Wahikuli to Puamana. That’s compared to the hundreds of homes for sale in communities north of the town.

From January to July of this year, 15 single-family homes totaling $39.8 million in value and one condominium worth $95,000 sold in Lahaina, according to Realtors Association of Maui data. That’s a drop from the 25 homes worth $89.5 million and the 43 condos worth $40.8 million that sold during the same stretch in 2023.

During that same period, the median home price in Lahaina climbed from $1.9 million in 2023 to nearly $2.7 million in 2024.  

Land sales, meanwhile, have risen, going from three sales worth $3.8 million during January to July 2023 to 22 sales worth $18.7 million during the same period this year. 

Todd Hutcheson lived at the 353 Aulike St. property that his wife has owned since 2009. Hutcheson, a contractor, thought about rebuilding after the fire but decided to sell because of the time and cost it would take, and his doubts that his wife “would ever sleep good on that property again.” The couple based their listing price on what it would have sold for before the fire and how much they received from their insurance.

After the fire, Hutcheson and his wife, who share four kids, built a place to live in the back of the warehouse in Wailuku where Hutcheson keeps his work supplies. He said they own a rental home but didn’t want to kick out their tenants or take housing from other displaced Lahaina residents.

“Trying to do our part, but we’re the villains for trying to sell our land,” Hutcheson said. 

The land trust made an offer on the Hutchesons’ property, but Watson thinks they were “low-balled.” Hutcheson said he also was unsure about selling to the land trust, believing that if he sold to another family they could pass on the land to their kids as it increased in value without the trust regulating the price. 

Just down the road, Greg Lambert’s property at 358 Aulike St. is listed for $650,000, which he says is just enough to cover $520,000 in mortgage payments they still owed and $120,000 for the solar they’d installed. Maui County tax records show that the property’s total assessed value was $651,600 in 2023 — $482,500 for the land and $169,100 for the building. 

Lambert watched his home burn from the lānai of a friend’s house in Launiupoko. It was the first home he and his wife bought together in 2012 and where their kids, now 20 and 13, grew up. His wife wanted to keep the property, but the insurance payouts weren’t enough to cover their bills, and the post-traumatic stress of potentially rebuilding there was just one more reason to sell.

Lambert said he got an offer from the land trust but that it wouldn’t have covered his expenses. He said he “thought long and hard” about selling because of the backlash on social media. 

“I think people just, they like to believe what they read and take it for truth, and sometimes that’s not always the case, you know?” Lambert said. 

Realtor P. Denise La Costa, who represents the Lamberts, said the land trust needs “to be more realistic about market value.” She said the land trust is focusing on pre-fire assessed values of the land done for property tax purposes, but that these are typically lower than market values, which change with inflation and supply and demand. 

Since the fire, La Costa said she’s represented two properties that have burned down — the Aulike Street lot and another in Puamana that even she acknowledges is above market rate. The $1.1 million listing at 25-2 Puakukui Pl. tells buyers that “the time is now to claim your slice of historic Puamana and construct the townhome you’ve always envisioned.”

Property tax records show it classed as a short-term rental with a total assessed value of $994,900 in 2023, including $767,400 for the land.

La Costa said the owner lives on the mainland and doesn’t need to sell but wanted to take a chance on the market. Already, she’s fielded three calls on the listing. 

“I work at the behest of my sellers,” La Costa said. “I don’t make these things up. I give them a range of what the market is and they pick it. And that was not even in the range.”

When asked about concerns that the listing could attract outside buyers and raise property values, La Costa said most of the neighborhood is already owned by off-island investors, “so there will be no difference in the market in Puamana.” 

‘THE FUTURE OF THIS COMMUNITY IS LITERALLY AT STAKE’

In August 2017, Burke and her husband purchased a four-bedroom home on Komo Mai Street for just over $761,000. They had enough space for four kids and eight pets, an immaculate grass lawn that neighbors had to touch to know it was real, and a garage where her husband and kids would get lost for hours amid containers of Legos and a retro Pac-Man stand-up arcade game. The fire took it all. 

“I’m pouring all my energy into the land trust, into work, into my kids, into all the different community issues, because I am scared to look at my insurance settlement and look at a contractor’s estimate and have it be a reality that I probably cannot rebuild the house that I had,” Burke said.

Burke is determined to return to Lahaina, where she grew up, but is worried that families like hers will get priced out. That’s why she’s a big believer in what the land trust does.

The first property the land trust bought came to them before it hit the market, according to Burke. Rick Kimball had experience with a conservation land trust in California, and with nobody in his family able to take over the property, he wanted to sell to the Lahaina land trust. 

The Kimballs bought the 10,654-square-foot property at 1651 Lokia St., which is zoned for one main house and two ohana units, for $885,000 in 2007. It was assessed at $830,000 in 2023 — $490,700 for the land and $339,300 for the building, according to property tax records.

The Lahaina land trust has not disclosed the sales price because it’s still under contract, but Ness said they bought it at the appraised value. Because the land trust is still waiting on Maui County to release the funds, it has partnered with The Conservation Fund, which signed the paperwork to quickly secure the land. Ness said they will reimburse The Conservation Fund and that the sales price will be public once the purchase closes. 

Attempts to buy other properties haven’t gone as smoothly. Ness said they’ve made offers on four other properties but were turned down. She disputed the Realtors’ claims that they hadn’t offered their clients enough, saying the land trust sought two different appraisals and offered the higher amount each time.

Ness said she doesn’t want to shame residents who need to sell but “we cannot ignore the fact that their actions are going to have a negative impact.” 

“This way that we’ve all subscribed to has damaged this community pre-fire for generations, and we’re either going to let it continue or we’re going to have this really difficult conversation that makes you uncomfortable,” Ness said. 

“Do I love getting on TV and talking about sales prices of properties for folks that have just lost their home? No, I do not. Is it uncomfortable? It is so uncomfortable. And also, the future of this community is literally at stake.”

Ness also pushed back against the reasoning that home prices were already high in Lahaina and that some neighborhoods are already mostly owned by outside investors.

“These individual landowners, even the buyers, do not exist in a vacuum,” Ness said. “They are part of a community. And when the actions that you take on behalf of an individual are also causing generational harm to the same community that surrounds you, then what is our kuleana?” 

LAHAINA’S MARKET: ‘ONE SALE TODAY COULD CHANGE THE VALUE’ 

Methow Valley, Wash., is a 60-mile stretch of small towns nestled in the Cascades with a total population of about 12,000 full- and part-time residents. The valley is heavily reliant on tourism and its natural beauty is a major draw for second homeowners and outdoor enthusiasts, says Simon Windell, chief financial officer of the Methow Housing Trust. 

In 2014, a massive inferno sparked by lightning storms over the valley burned 256,108 acres and destroyed 353 homes in what became the largest single wildfire in Washington state history. Like Lahaina, residents there felt housing was the top issue in the wake of the disaster. In 2018, they formed the Methow Housing Trust and have since developed five neighborhoods and 49 homes. Their goal is to have 100 homes in the trust by the end of the decade and put 20 percent of the housing stock in permanent protection.

It’s one of the many land trusts whose model the Lahaina land trust follows, and Windell is one of its consultants. While the markets are different — the median price for a Methow Valley home in 2023 was $663,000 compared to $1.2 million in Maui County — the need to secure long-term affordable housing in a place popular with outside investors is the same. 

“Realtors tend to believe in the market and we tend to believe in non-market solutions,” Windell said. “But I think we’ve come to this kind of equilibrium where it’s a realization that like both of them can coexist in the same community. … Whether the buyers realize it or not, the reason they chose to buy here and not somewhere else is because the community is awesome. The community is awesome because there’s housing for local folks.” 

There are more than 260 community land trusts in 46 states — the first in Hawai‘i was Nā Hale O Maui, which was founded in 2006. Nā Hale O Maui also owns land in perpetuity and gives homeowners 99-year renewable leases. So far it has put families in 50 affordable properties; the Lahaina fire destroyed 14 of the 15 homes Nā Hale O Maui had in the Kahoma subdivision that sold between $390,000 and $460,000 in 2020. 

After the loss of so much housing, including many affordable developments, every sale in Lahaina matters.

Tradewinds Appraisals owner Daniel Soares appraised two vacant lots in Lahaina for the land trust, including the first property that the land trust bought. The challenge was finding comps in the post-fire market. 

“One sale today could change the value. That’s how dynamic the market can be in Lahaina town,” said Soares, a licensed appraiser on Maui since 1993. 

Soares said assessed land values and market values can differ at times because assessments are done once a year by county assessors and help determine property taxes, while appraisals for individual properties are done by licensed appraisers making comparisons to similar sales, which can change based on the market at the time. 

When asked if the listings of burned properties are fair, he said the market will determine that. 

“You might have that one person who might go against the grain and overpay or pay at list price, which was happening prior to the fire because of the low inventory and high demand,” Soares said. “But today in Lahaina, it’s really tough to determine what’s market value because of the lack of sales. So ultimately, if the listing stays on the market for longer than three months, that might give you an idea that it’s listed too high.”

In a place where short-term rentals made up 40% of Lahaina’s housing stock before the fire, it’s unclear how the loss of so many homes will change the face of the town. One report released earlier this year by the nonprofit Hawai‘i Land Trust and Kahālāwai Consulting estimated that Lahaina could see 6.5% of residential properties totaling $122 million change hands over the course of a year and within three years, 20% turnover of ownership of at least $360 million in value.

Ness and the land trust staff are hoping to get ahead of that. They plan to keep making offers until they find Realtors willing to deal.

“There’s those that are in it just for the money. They’ll never be on our side,” said Auweloa, who grew up in Lahaina. “But those that are in it for … just genuinely liking to help a family get on a place that they can own … those people, I think, will believe in what we’re doing, and I think they will be our allies.”

Realtors Association of Maui CEO Mei Wright said in a statement that the organization is supportive of the land trust. 

“We often share information regarding the trust and encourage donating in our communications,” Wright said. “I know some of our members are talking to sellers about this option, but the decision is ultimately up to the seller.”

The Kimballs, who are retired and now living on the Mainland, weren’t looking to make a big profit when they sold to the land trust. However, they know not everyone is in the same position. 

“Everybody is going to have a different story and there could be strong motivations for some people to look for the highest possible price they can get for it,” Rick Kimball said. “I’m certain there are a number of other people who basically felt that it would be best for them to leave Maui and go elsewhere and would not be coming back.”