Economists Warn Lahaina Residents Could Face Displacement in Wake of Rebuilding Without Zoning Reforms

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Economists have cautioned that unless local authorities amend existing zoning regulations, inhabitants of Lahaina, Hawaii, who have survived the devastating wildfire may find it financially prohibitive to return to their rebuilt community.

Carl Bonham, the Executive Director of the University of Hawaii Economic Research Organization, expressed his concerns during a virtual press briefing prior to the release of the organization’s latest quarterly economic forecast on Friday. He stated, “The threat is not hypothetical.”

Skyrocketing property values have already compelled numerous Native Hawaiians and other long-term residents to relocate to the mainland United States. The wildfire, which resulted in a minimum of 97 fatalities and demolished 2,200 structures—of which 86% were homes— in Lahaina’s West Maui region, has exacerbated this displacement crisis. Nearly 8,000 survivors are currently housed in 40 different hotel and alternative lodging facilities throughout Maui.

The economic report noted, “The anticipated market prices for newly constructed housing will likely surpass the elevated costs that Lahaina faced prior to the blaze. For those who rent, the loss of older, more affordable housing stock severely curtails options for affordable rent.”

Additional escalation in housing costs will further strain individuals, including retirees and service sector employees, who were already impacted by the loss of their residences and employment when the wildfire destroyed their workplaces on August 8, or when the West Maui area temporarily suspended tourism operations following the disaster.

Tourism is set to resume in West Maui, an area replete with resort hotels along its lush coastline, on October 8. Governor Josh Green assured that survivors will not be evicted from their temporary accommodations to make way for tourists, particularly given that October is generally a slow month for tourism.

However, uncertainty looms regarding when displaced individuals can return to Lahaina, and at what cost. Bonham expressed skepticism that reconstruction efforts will commence before the year 2025.

Despite Governor Green’s previous promises to prevent the gentrification of Lahaina, which served as the capital of the Hawaiian Kingdom in the 19th century, there is increasing concern among locals. Green had alluded to the possibility of state land acquisition for workforce housing but later clarified that this would occur only if there was community demand for it.

To curb the acquisition of Lahaina property by financially affluent outsiders, Green prohibited unsolicited property offers on August 19. His administration is currently conducting several investigations to enforce this emergency measure.

Some residents argue that stronger steps, such as an outright ban on property sales, should have been implemented. “This is not the time for outsiders to capitalize on the community’s emotional vulnerability,” remarked Melody Lukela-Singh, a resident whose home was destroyed in the fire.

Bonham advocated for comprehensive policy alterations, including zoning changes that permit the construction of smaller and more economically accessible housing options, such as duplexes and apartments. “A focus on multi-family housing is essential. Increasing density is the key to avoiding a landscape dominated by multi-million dollar residences,” he noted. Currently, a mere 1% of the burned area in Lahaina is zoned for multi-family housing, according to Bonham.

The latest economic report underlines the heavy toll the wildfire and the subsequent decline in tourism have inflicted on Maui’s economy and its population. Initial advisories discouraging travel to Maui led to a nearly 75% drop in visitor arrivals. In the aftermath of the fire, Maui’s economy lost more than $13 million in daily tourist expenditures.

Layoffs followed the decline in business. Prior to the disaster, the unemployment rate on Maui stood at a mere 2.6%. Economists now predict this rate will surge to above 11% in the upcoming quarter and it is not anticipated to descend below 4% until late 2026. Post-disaster, approximately 12,000 new unemployment insurance claims have been filed—a staggering increase from the 700 filed before the catastrophe.

The Hawaii Department of Labor and Industrial Relations announced an extension for Disaster Unemployment Assistance application filing, courtesy of the U.S. Department of Labor, until October 16. “Those who are not eligible for standard unemployment benefits may still qualify for Disaster Unemployment Assistance,” Governor Green clarified.

Local officials are now inviting tourists back to Maui, with expectations of a gradual recovery. By the close of the current year, tourist arrivals to Maui are forecasted to be around 50% of the levels seen in 2022, improving to 80% by the end of 2024.

Reported by Selsky from Salem, Oregon.

Frequently Asked Questions (FAQs) about Zoning Reforms in Lahaina

More about Zoning Reforms in Lahaina

• University of Hawaii Economic Research Organization Quarterly Report
• Governor Josh Green’s Emergency Proclamation on Lahaina Property
• Hawaii Department of Labor and Industrial Relations on Disaster Unemployment Assistance
• Maui Tourism Statistics and Economic Impact
• Historical Zoning Regulations in Lahaina
• Federal Disaster Unemployment Assistance Program Information
• West Maui Tourism Reopening Plans