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From a hill next to a busy work site in Lahaina, Lt. Gen. Scott Spellmon, the Army Corps of Engineers’ commanding general, and Maui Mayor Richard Bissen could see and hear the progress of the federal government’s project to house survivors of the Aug. 8 fires. 

Blasting of hard blue rock has been underway since May to prepare 34 empty acres for the Federal Emergency Management Agency’s temporary complex of 169 modular homes, dubbed Kilohana.

The project is “a little ahead of schedule” and expected to be completed by Oct. 28, according to the Corps.

But despite the housing crisis on Maui, it is not clear if four months from now there will be enough FEMA-eligible households still needing a place to live to occupy all 169 units of the $100 million-plus project.

As of last week, there are only 114 more households that need to be moved out of FEMA’s pricey emergency hotel program and into more stable housing. And all of those remaining households have been matched with a direct lease property, FEMA Deputy Federal Coordinating Officer Curtis Brown said Wednesday.

FEMA’s goal is to get all 114 households moved into direct leases by June 30, the ever-extending deadline for the federal agency to reimburse the state for fire survivors housed in resorts and condotels. 

But the reality, Brown said, is that some of the remaining households — primarily those with pets or that have people with accessibility — may not be able to move into a direct lease. There are also about 58 people with “checkered backgrounds.”

“So we have Kilohana,” he said.

Right next door, work is underway on the state’s temporary housing complex called Ka Lai Ola, with a base budget of $115 million. It will have 450 units to house fire survivors who are not eligible for FEMA assistance.

Joe Campos, deputy director of the state Department of Human Services, said Thursday that Ka Lai Ola is on track and is expected to have the first pad of 14 to 17 units available for households to move into by the first week in August, with the entire project targeted for completion by the end of March.

Campos said the state is still working with the developer, , and their contractors to speed up completion.

But now, only about 100 households that aren’t eligible for FEMA housing — either its direct-lease program or its Kilohana project — are still living in hotels. That leaves about 350 units to fill.

“We do anticipate that the 450 (homes) will be occupied,” Campos said.

People who have expressed interest in the state’s group housing site include fire survivors who moved to other islands or the mainland and want to move back to Maui, according to Campos.

He also said other candidates for the state housing include households that turned down FEMA’s rental assistance to stay in West Maui and people who didn’t apply for FEMA assistance for reasons like “not wanting to give the federal government all of their information.”

The state’s application process will begin in about a week, “and then we’ll really get a sense of what the demand is for the project” and if there is a need for additional units in other locations, Campos said.

FEMA also said it may consider building another group housing site if demand warrants it. But the agency says that doesn’t appear to be the case at the moment.

“The math doesn’t add for the state’s side and it doesn’t add up for us,” Brown said about the number of households left that need housing.

FEMA began to look at group housing as an option not long after the fires. On Oct. 28, about two and a half months after the devastating Lahaina blaze displaced about 12,000 people and destroyed 2,200 structures, the Corps received a $1.9 million contract from FEMA to conceptually design a group housing site.

“Thinking ahead months ago, and not knowing what today was going to look like, a group site was the answer,” Brown said. “So we had to jump on it.”

In the first few months after the fires, FEMA was housing up to nearly 8,000 people in pricey resorts and condotels that at one point was costing about $1 million per day, while its direct lease program to convert short-term rentals into long-term housing for fire survivors was struggling to get property owners to sign up and people to move into them.

Gov. Josh Green also was publicly pressuring FEMA to build 1,000 temporary homes, with lobbying by Bissen and members of Hawaii’s congressional delegation.

Bob Fenton, who is heading up the Maui recovery effort for FEMA, said months ago that building group housing was the most expensive type of intermediate housing and thus the last resort.

It took several months to complete the design, nail down a site (Bissen announced the location in March), conduct archeological surveys and hire a contractor, Native Hawaiian-owned Dawson AKT, to grade the land, install utilities and do other work to prepare the site for the homes. The initial contract with Dawson is not to exceed $45 million, half of the projected cost of the preparation portion of the project, according to the Corps.

Once that prep work is done, FEMA will oversee the vendors who will install their modular homes. FEMA said it will be selecting three to five vendors in about a week. FEMA won’t say how much it anticipates paying for the homes for its project. But the state has said it is paying an average of about $118,000 per modular home for its group site.

People do not apply for FEMA’s group housing site, which is slated to be in place for three years, although it could be extended. FEMA and its partners, in consultation with fire survivors, match people with its housing options. FEMA said fire survivors do not pay to live in its group housing, as is the case with its direct leases.

But for the state’s group housing site, which is slated to operate for five years, fire survivors can apply for a home. Green has committed the state to pay the rent through at least August 2025. After that period, the state will collect rent, although it will be much more affordable than the current skyrocketing housing market on Maui, Campos said.

Most of FEMA’s direct leases were for one year and end in the first quarter of 2025, although there are options to be extended up to two years.

Brown said candidates for FEMA’s group housing site include people who had been in its direct lease program, but the property owner decided to end the lease. It’s also possible that people who were matched to units outside of West Maui would like to move to Kilohana to be in Lahaina, closer to their work, school and community.

FEMA currently has 1,098 households living in direct-lease properties, down from 1,144 since 46 households have already moved out and found alternative housing on their own, according to FEMA.

Brown said it’s likely the FEMA-eligible people who can’t be moved into direct leases will continue to be housed in the hotels until Kilohana is done.

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