County’s updated plan for $1.6 billion in fire recovery funds includes help for first-time homebuyers, rebuilding homes

Maui County is preparing to send the federal government a plan for how it will use $1.6 billion in disaster relief funds, with the latest version including funding for new rental housing and first-time homebuyers, as well as the option to reimburse residents who already are rebuilding their burned-down homes. 

Office of Recovery Administrator John Smith said Wednesday that the county is working to send in its plans to the federal Department of Housing and Urban Development by Monday, and that the programs could start taking applications by this summer. 

“We are pushing hard and all the staff is working nonstop to make the changes to the plan that we need to,” Smith said during a virtual community meeting held by the county. 

The $1.6 billion Community Development Block Grant funding will provide a big financial boost for a recovery that is expected to tally nearly $7 billion overall, according to the draft plan released by Maui County in February. 

About $900 million, or more than half of the total funding, is set to support homeowners and renters, with $298.6 million for rebuilding single-family homes that burned down in the fire, $235 million for rebuilding multifamily rental housing, and $370 million for new housing opportunities for renters who were impacted by the disaster. 

Smith said Wednesday that the latest version of the plan divides the new housing opportunity funding equally between new construction of multifamily rental housing and single-family first-time homebuyer assistance, with $185 million for each program. 

Both are still intended to help impacted renters, but Smith said the county heard from HUD and public commenters that “we needed to make it a little bit more clear what these programs are.”

Rebuilding after the Aug. 8, 2023 wildfires, which destroyed more than 2,200 structures in Lahaina and 26 in Kula, is steadily progressing. Hundreds of people have applied for building permits — 380 have been issued and 301 are being processed — but only 10 homes have been completed so far, according to the county’s recovery dashboard as of Tuesday. 

Housing remains one of the most crucial needs in the rebuild, especially after about 700 public and privately owned affordable housing units were lost in the fire. Maui County made rebuilding affordable units one of the top short-term priorities of its long-term recovery plan.

Smith said the county has also added an option in its plan to reimburse people who have already started building their homes, which many people have asked the county for, though the priority is still for people who can’t rebuild on their own. 

Smith added that they’re also looking for ways to include ‘ohana units as an eligible expense. 

The county is proposing reimbursement for people making low to moderate income, which is 80% or less of the area’s median income. That would mean $69,840 or less for one person, $99,760 or less for a family of four and $131,760 for a family of eight, according to 2024 guidelines. A major community concern, however, is that people who make more than that still need assistance to handle Maui’s high costs.

Smith said “we understand, we agree,” and that the county is working “with other partners and other sources to fill gaps” that the Community Development Block Grant funding cannot. 

“We’re also pushing HUD really hard to be as flexible as we can with this fund,” Smith said.  

Maui County Council Member Tamara Paltin, who holds the West Maui residency seat, said as more people get permits, many are getting to the point where they have to decide whether they can afford to rebuild. The insurance funding wasn’t enough to cover what many people lost, and they need help to fill that gap so they can not only rebuild their homes, but stay in them long term. 

Some displaced residents are still paying mortgages on their burned-down homes and, in some cases, shouldering the added costs of rent and longer commutes from wherever they’ve moved. 

“Some people are having to pay so much gas because they moved Upcountry or Pāʻia or Kīhei,” Paltin said. “And just always being on the road, kids in different schools, just a lot of expenses from not living how you had set up your life, and (being) in the process of trying to get back to that life.”

Paltin said that’s why she wants to add another $3 million to the county’s budget for the Lahaina Community Land Trust, which is working with Hawai‘i Community Lending to help people afford to rebuild their homes. The mayor’s budget proposal, which the council is currently reviewing, proposes giving the land trust $3 million for property acquisition and insurance gap programs.

Paltin added that she’s supportive of reimbursing people for rebuilding their homes with the disaster relief grant, but that the first priority should be for people who haven’t been able to get back to West Maui yet. 

She welcomed any funding assistance “because we’re in dire need” but was cautious about putting funding toward more new rental housing, given limited water resources in West Maui, and with projects that were in the works even before the fires and are still waiting to start, like Pulelehua, whose 1,000-unit development will include 240 affordable rentals in the first phase.

Other changes to the plan included moving $65 million from public services to other needs, with $50 million going toward infrastructure and public facilities to help with projects that include rebuilding the kupuna center that burned down in the fire, additional health care facilities after some were damaged or lost in the fire, and historic restoration. Another $15 million will be set aside for “economic revitalization” to help with workforce training, a popular request from the community. 

The $25 million leftover in public services funding will go toward health and wellness, homeless programs and child care. 

Another $213.8 million is going towards fire mitigation measures, and close to $82 million would be used for administrative purposes to carry out the programs.

Smith said the action plan is broad enough that the funds could potentially be used to fill the gap for critical projects like the West Maui hospital that had been in the works for years before the fire and struggled to secure financial backing. 

Once the plan is submitted, the federal housing agency has 45 days to review and approve it or impose further requirements, giving the county 30 days to make changes and send in the plan again. After that, programs will be finalized and intake of applications is projected to start in the summer. 

“I know that feels like it’s going to take forever,” Smith said. “Believe me, we are moving as fast as we can through the program.”