FEMA cancels some of its direct leases to house survivors of the Maui fire

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

“I was blindsided,” he said last week. “We signed up for the program, clearing our calendar a year in good faith, thinking they would use it to help wildfire victims.”

Finnecy is not alone. Other landlords are receiving the same cancellation notice as FEMA ends its contribution to housing survivors of the Aug. 8 fire in expensive resort rooms and less expensive direct leases.

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

The number of cancellations is not known. FEMA did not provide the requested information or indicate whether other cancellations were in the works. But it looks like it will.

FEMA officials have said repeatedly in recent months that about 1,300 to 1,500 units are under contract with the program, which is managed by three foreign companies: Lima Charlie, Aesthetic Home Investments and Fedcology/Parliament. As of Tuesday, 988 direct rental homes were occupied by survivors.

The American Red Cross said Thursday there were 369 households remaining in the hotel program, representing 939 people. Many of these households are not eligible for the FEMA program or cannot be placed in direct rental housing for reasons such as failing criminal background checks.

Some survivors not living in hotels are also eligible for direct rentals, including those whose lodging benefits under their insurance have ended or are about to run out.

Meanwhile, FEMA is building a temporary congregate 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 congregate housing site adjacent to that property for survivors ineligible 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 hotels.

FEMA officials and Green said some households were repeatedly turned down direct rental housing, primarily because they were not located in West Maui, near their jobs, children's schools and the community.

On Tuesday, FEMA sent an email stating that eligible fire survivors must now accept the proposed direct rental unit or opt out of the program that provides free housing for one year and potentially up to two years.

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

These circumstances include school-aged children not having transportation to their school from the unit, the proposed unit not being suitable for people with disabilities or in need of home health services and having a home before the disaster that was a working farm that generated at least half of the household income.

In April, Bob Fenton, who is leading Maui wildfire recovery efforts for FEMA, said he had long expected the number of direct-rental units needed to be around 1,500 .

But he added: “At some point I won't be carrying any more units.”

For Kristina Paras, that day arrived on Wednesday. She received the same 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 apartment in Kihei that she had been living in full time. She even sold her beloved Jeep.

Twice she was delighted that fire survivors were matched into her unit only to discover, for unknown reasons, that they would not move in. Last week, Lima Charlie informed her that she needed to install a GFI outlet to protect against electrical shock. which Paras said he immediately hired an electrician to do.

Much effort has gone into the unit, including during FEMA inspections, which has been empty since February. At taxpayers' expense, FEMA will pay Lima Charlie $8,000 a month in rent and thousands in other property management fees through the end of June.

According to the contract, the owner was entitled to an additional month's rent from notification of the cancellation. Lima Charlie paid Paras' June rent shortly after issuing the notice.

The cancellations come despite FEMA issuing a new request for quotes for more properties that was due by May 17, according to information contained in an email sent to a property owner by Natalia Rendon, a business developer at LimaCharlie.

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

Paras is now planning to return to Maui.

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

He's also frustrated that for three months it sat empty, costing taxpayers $8,000 a month, plus homeowners association fees and property management fees, with no results.

He called Lima Charlie several times and finally got through to someone who gave him a 1-800 number for FEMA in Washington.

FEMA responded with an email explaining the reason for the cancellation: “Unfortunately, none of the survivors chose your unit because they felt it did not meet their household needs. »

The county approved property tax exemptions of one year to 18 months for short-term rental owners who participated in the direct rental program. These owners will likely lose this exemption.

The county said its property assessment division works with the three property management companies to obtain information when leases are canceled for any reason. When that happens, the county said the homeowner will receive a letter informing them that they are not eligible for the exemption. The owner has 30 days to appeal.

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