The property owners are now scrambling to figure out what to do with their units which sat empty for months at the expense of taxpayers.

Brendon Finnecy opened an email on Wednesday with the unexpected news that the Federal Emergency Management Agency had canceled his direct-lease contract to house Maui fire survivors in his Pacific Shores condo with an ocean view in Kihei.

鈥淚 was blindsided,鈥 he said last week. 鈥淲e signed up for the program, clearing out our calendar for a year in good faith that they would use it to help wildfire victims.鈥

Finnecy is not alone. Other property owners are getting the same cancellation notice as FEMA winds down its contribution to housing survivors of the Aug. 8 blaze in pricey resort rooms and into less costly direct leases.

South Kihei Road stretches along South Maui by Kamaole Beach Park, May 21, 2024. (Nathan Eagle/Civil Beat/2024)
FEMA has canceled some of its direct leases with condo owners in Kihei to house survivors of the Aug. 8 fire in Lahaina. (Nathan Eagle/Civil Beat/2024)

The ever-extending deadline is now June 10 for when FEMA will stop reimbursing the state for housing eligible survivors in the hotels, which at one point cost about $1,000 per household per day for lodging, food and “wrap-around” services. Gov. Josh Green’s administration has yet to provide a breakdown of those costs despite multiple public records requests and follow-ups.

The number of cancellations is not known. FEMA did not provide the requested information or say if more cancellations are on the way. But it appears there will be.

FEMA officials have repeatedly said for the past few months that there are about 1,300 to 1,500 units under contract with the program, which is managed by three out-of-state companies: Lima Charlie, Aesthetic Home Investments and Fedcology/Parliament. As of Tuesday, 988 direct-lease units were occupied by survivors.

The American Red Cross said as of Thursday there were 369 households left in the hotel program representing 939 people. Many of those households are not eligible for the FEMA program or cannot be placed into direct-lease units due to reasons that include not passing criminal background checks.

Some survivors not living in hotels also are eligible for direct leases, including those whose lodging benefits from their insurance have ended or are running out.

In the meantime, FEMA is constructing a temporary group housing site in Lahaina that will have 169 units available later this year, but well after the June 10 deadline. The state is building a 450-unit group housing site adjacent to that property for survivors not eligible for FEMA assistance, but it won’t be ready for months.

On Friday, more than nine months after the Aug. 8 fires in Lahaina and Kula displaced about 13,000 people, FEMA ended its program to provide meals to survivors still living in the hotels.

FEMA officials and Green have said that some households have turned down direct lease units several times, primarily because they were not located in West Maui near their work, children鈥檚 schools and community.

Group housing sites for fire survivors are planned for the land behind the Wahikuli subdivision in Lahaina. (Nathan Eagle/Civil Beat/2024)
Group housing sites for fire survivors are planned for the land behind the Wahikuli subdivision in Lahaina. (Nathan Eagle/Civil Beat/2024)

On Tuesday, FEMA sent an email that said eligible fire survivors now had to accept the direct-lease unit offered or be out of the program that provides free housing for a year and possibly up to two years.

But there were exceptions in which a survivor could decline a unit one more time before being kicked out.

Those circumstances include having school-age children without transportation available to their school from the unit, the offered unit not being suitable for people who are disabled or need in-home health services and having a pre-disaster home that was a working farm that generated at least half of the household income.

In April, Bob Fenton, who heads Maui鈥檚 wildfire recovery efforts for FEMA, said he has long expected the number of direct-lease units needed to be about 1,500.

But he added, 鈥渁t some point, I’m not going to carry extra units.鈥

For Kristina Paras, that day came Wednesday. She received the same form email from Lima Charlie as Finnecy.

Paras, who works remotely, decided to move to the mainland to free up for fire survivors her two-bedroom condo in Kihei that she lived in full-time. She even sold her beloved Jeep.

Two times, she was delighted that fire survivors had been matched in her unit only to find out for unknown reasons that they were not moving in. Just last week, Lima Charlie informed her she needed to install a GFI outlet to protect against electrical shocks, which Paras said she immediately hired an electrician to do.

A lot of effort was put into the unit, including FEMA inspections, which has been empty since February. At taxpayers expense, FEMA will pay the $8,000 monthly rent and thousands more in property management fees to Lima Charlie through the end of June.

Per the contract, the property owner was entitled to one additional month of rent from the time of the cancellation notice. Lima Charlie paid the June rent to Paras shortly after issuing the notice.

The cancellations come despite FEMA putting out a new request for quotes for more properties that was due by May 17, according to information in an email sent to a property owner by Natalia Rendon, a business developer with Lima Charlie.

“We are looking for housing solutions that are immediately available or will be available prior to May 20th, 2024,” she wrote on May 16.

Now Paras is planning to move back to Maui.

For Finnecy, the cancellation is a bigger problem. He now has to try to rebook the condo, unfreeze his Airbnb account and do myriad things to get the unit ready again for聽short-term renters.

He also is frustrated that for three months it sat empty, costing taxpayers $8,000 per month plus homeowners association fees and property management fees with nothing to show for it.

He called Lima Charlie multiple times and finally got ahold of a person who gave him a 1-800 number for FEMA in Washington.

FEMA responded with an email that provided this reason for the cancellation: 鈥淯nfortunately, none of the survivors selected your unit because they felt it didn鈥檛 meet their household composition needs.鈥

The county has approved property tax exemptions of one year to 18 months for property owners of short-term rentals who entered the direct-lease program. Those owners likely will lose this exemption.

The county said its Real Property Assessment Division is working with the three property management companies to obtain information when leases are canceled, no matter the reason. When this occurs, the county said the property owner will be sent a letter notifying them they do not qualify for the exemption. The owner has 30 days to appeal.

Civil Beat’s coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.

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