New Developments and the Impact of Maui's Wildfires

Overview

New developments in Hawaii is a sensitive topic, particularly given the ongoing affordable housing crisis. Lahaina's devastating fires have only exacerbated this concern, prompting developers to pause and reflect on the gravity of the situation.

In real estate, the focus has shifted. It's no longer solely about profit; it's about providing shelter and solace to those who have tragically lost their homes. Heartfelt conversations are underway to chart the daunting path of rebuilding a historic town, one that once stood as the capital of the Hawaiian Kingdom.

Yet, within this process, the concerns of the community have emerged, and they are entirely valid. There is a palpable fear that outsiders might exploit the situation, seizing lands for their personal gain. This has left many wondering whether the people who call Lahaina home will have a say in its reconstruction.

In response to these concerns, Josh Green, the Governor of Hawaii, has offered reassurance. He has pledged that the rebuilding of Lahaina will be a collaborative effort, one that includes survivors, the local community, and Maui County in the decision-making process.

The latest on Maui’s fires

Maui’s wildfires occurred on August 8th and is currently ranked as the fifth deadliest wildfire in US history. Below are the latest numbers:

• 115 confirmed deaths.
• 54 victims publicly identified.
• Hundreds of people still reported missing.
• Over 2,200 buildings destroyed.
• More than 2,000 acres of land burned.

While the search for victims on land is complete, the search continues in the ocean.

How do Maui's wildfires and the housing crisis affect new construction?

For starters, there will be delays.

Several developments, such as Kaliu Kakaako, Kahuina, Malu Koa West, and Kaulu by Gentry, have experienced delays. While these delays may not be directly attributed to the fires, it's likely that the wildfires have increased caution in terms of sales date releases, pricing, and media coverage.

Secondly, approvals for luxury developments will be harder to come by.

In mid-July, the State of Hawaii issued an emergency proclamation, electing a new group to be responsible for evaluating which developments qualify for an expedited approval process. For those with an interest in luxury developments, it is advisable to focus on projects that have already gained approval or are in the process of doing so. Some noteworthy options include Alia Kakaako, Kaliu, Launiu Ward Village, Block D and Block E of Ward Village, Makalii at Wailea, and Kohanaiki or Hokulia on the Big Island. These developments are considered excellent investment opportunities.

Thirdly, expect a wave of new developments with affordable housing.

This includes long-term affordable rentals, transitional housing, below-market-rate housing, and more. Because of the strong demand with affordable housing, we anticipate an uptick of lotteries and organized releases via cycles or increments.

More incentives for locals.

Over 10,000 individuals find themselves displaced as a result of the wildfires. Although the State has introduced the Hawaii Fire Housing Relief Program, it doesn't provide sufficient long-term housing solutions. It is expected that additional programs and incentives will be introduced to encourage local residents to remain in their communities. While interest from mainland buyers may grow due to potentially cost-effective opportunities, it's important to note that they may not meet the eligibility criteria.

Lastly, everything including real estate will continue, but for now, Lahaina is closed.

Nani Medeiros, Hawaii's former State Housing Chief who recently resigned, recently mentioned that Lahaina is 'not on the table.'

In other words, for those of you who are in pursuit of a new home in Hawaii, it is advised to persist in your search. Those looking to sell their homes should continue with their plans. For those with aspirations to construct new homes, your enthusiasm is truly valued, but Lahaina is not available for development at this time.

Updates

As you may have anticipated, there hasn't been a lot of activity throughout the month of August. However, we're pleased to share that Building 3 in Nahele at Hoopili became available on August 31st. Additionally, for those of you who are interested in Launiu Ward Village, Howard Hughes has released a new rendering.

For a comprehensive list of both new and recent developments in Hawaii, we invite you to explore our New Homes page by clicking here.