Housing advocates say landlords are being tempted to oust renters in favor of more lucrative rent subsidies for fire survivors amid high demand.

A heightened wave of housing insecurity is sweeping Maui, particularly for renters.

What was already a tight and expensive market before the August wildfires has contracted further as lucrative rent subsidies, scarce inventory and high demand entice landlords to replace existing tenants with those willing to pay much more, according to interviews with housing advocates, renters and property managers.

“We’re seeing waves of displacement,” said Jordan Hocker, a tenant advocate with Maui Housing Hui, a grassroots organization. “People are getting pushed out into an increasingly hostile housing market.”

The federal and state governments are struggling to find long-term housing for people who survived the Aug. 8 Maui wildfires but lost their homes. Thousands are still living in hotel rooms. (Marina Starleaf Riker/Civil Beat/2022)

Although a moratorium on evictions and rent hikes is in place until March 5, housing advocates say renters are still receiving vacate notices or emails informing them that their leases won’t be renewed, a practice that’s legal provided the lease has come to an end and adequate notice is given.

Alan Lloyd of the Maui Tenants Association said he has received 95 eviction-related calls since the fire.

The problem is complicated by the need to find long-term housing for some 6,000 survivors of the Aug. 8 wildfires who are still living in hotel rooms after losing their homes.

The FEMA Factor

“This whole FEMA thing is not helping,” said car salesman Justin Schmotter, a Maui Meadows renter who was recently told he had until mid-February to move because his yearly lease would not be renewed. Although the owner has since changed his mind, the experience has left Schmotter unnerved.

The “FEMA thing” he’s referring to is a direct leasing program the Federal Emergency Management Agency has in place that pays above-market rates to Maui landlords who rent to fire survivors.

FEMA did not respond to an email seeking comment for this story.

But FEMA Region 9 Administrator Bob Fenton said recently that his agency pays rates “very comparable” to what short-term rental owners made from their units last year. On average, that’s 366% above the fair-market rents, Fenton said.

Gov. Josh Green has Bob Fenton’s back while he addresses the media about the Federal Emergency Management Agency’s participation to reopen schools in West Maui on Tuesday, Sept. 26, 2023, at Kapalua Airport in Lahaina. Fenton is the chief federal response coordinator for FEMA, The Army Corps of Engineers will be building a temporary replacement school for King Kamehameha III Elementary. (Kevin Fujii/Civil Beat/2023)
Bob Fenton, at the podium being protected from rain by Gov. Josh Green, is leading FEMA’s response to the August wildfires in Hawaii. He says his agency pays rates “very comparable” to what short-term rental owners on Maui made from their units last year. (Kevin Fujii/Civil Beat/2023)

The federal agency also pays homeowner association fees, damage fees and court costs if tenants eventually need to be evicted.

Helping Fire Survivors

FEMA, the state, the Council for Native Hawaiian Advancement and other agencies have tried coaxing Maui homeowners or off-island property owners to rent to the displaced. But so far, only some 2,000 of the 8,000 originally displaced by the fire have been able to find long-term housing, according to Mary Simkins, assistant director of external affairs for the American Red Cross.

Recently Gov. Josh Green unveiled a $500 million plan to house every displaced survivor by July 1 through a combination of strategies. These include a host family program where residents are paid to open their doors to fire victims, long-term hotel units bought or leased by the government, long-term rentals and housing units built and managed by FEMA and CNHA. Beyond that, 433 homes in and around the burn zone should be ready for re-occupancy by March 1.

Some critics, including state Sen. Angus McKelvey, said the plan will exacerbate hyperinflation, or price gouging, in the rental market.

“This program sets inflated rates as the new norm across Maui. As a result, residents are facing non-renewed leases and skyrocketing prices. Calls for decisive action against those exploiting the situation have yielded only policies that further inflate rental prices,” McKelvey said in a press release earlier this month.

Fearful Landlords

While the high FEMA rates may entice some landlords, others are too spooked by the moratorium to rent their properties at all, said Christian Cramer, a property manager with Hawaii Equity Management. Cramer manages over 100 properties on Maui, including the place Schmotter rents.

“I’ve gotten a bunch of calls from landlords and they’re terrified to rent their property,” Cramer said. “If they put someone in their property for a year and the tenant stops paying, then the owner is screwed. We’ve actually lost some of our managed properties because the landlords are terrified of not being able to evict or do anything.”

Bryan Lowry, who’s also been renting in Maui Meadows for four years, is among long-term renters who are being asked to leave. Lowry said a notice to vacate was placed on his door on Jan. 3.

Lowry said the property owner told him he wants to rent to FEMA because he can get thousands more a month for the property.

Bryan Lowry received an eviction notice from his landlord on Jan. 3 that gave him until Feb. 18 to vacate his rental property in Kihei. (Nathan Eagle/Civil Beat/2024)
Bryan Lowry received an eviction notice from his landlord on Jan. 3 that gave him until Feb. 18 to vacate his rental property in Kihei. (Nathan Eagle/Civil Beat/2024)

Reached by phone, the landlord declined an interview and hung up.

The eviction notice said Lowry didn’t have a legal lease and that the property would be renovated.

Lowry, who has lived on Maui for more than 20 years and said he does have a lease, has reached out to the Hawaii attorney general and the Legal Aid Society of Hawaii but is not hopeful about a favorable resolution.

He spent Friday moving his belongings into a 40-foot shipping container on a friend’s land and is considering cashing in airline miles and going on an extended trip.

Bryan Lowry and his housemates received an eviction notice on Jan. 3. (Nathan Eagle/Civil Beat/2024)

Lowry has spent days scouring housing ads looking for a new place to live and said he couldn’t find any legitimate places to rent that are halfway decent and affordable.

Scuba instructor Iman Sohrabi, who worked in a Front Street gallery that burned and as an “activity concierge” in the tourism industry, said his lease for a Napili apartment was not renewed in September despite having what he described as a good relationship with his landlords.

He said he received an email on Sept. 15 that cited unspecified family reasons for the nonrenewal and a 45-day notice to be out.

“Unfortunately, due to circumstances beyond our control and the uncertainty of the future, it is not feasible for us to continue with the current arrangement,” the notice said. “We understand that this may come as a disappointment, but we have to prioritize the well-being of our family and navigate the challenges we are facing. Please know that this decision is not personal, but rather a reflection of what we believe is best for our future.”

The landlord did not respond to a request for comment.

Sohrabi lost all of his scuba equipment in the fire and his other income. But because he didn’t lose his housing, he doesn’t qualify for FEMA assistance, he said.

Sohrabi said he’s fighting his eviction in court with his next appearance scheduled for Feb. 6. He said the governor should tighten the moratorium so that what’s happening to him doesn’t occur to others.

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The Hawaii Attorney General’s Office said it continues to receive complaints from the public about questionable actions by landlords. Investigators conduct preliminary reviews to evaluate the potential violation.

“If a violation is confirmed, the investigators attempt to bring the landlord into compliance or, if unsuccessful, may refer the matter to our office for appropriate action,” spokeswoman Toni Schwartz said by email.

Complicated Enforcement

Nick Severson, interim managing attorney for Legal Aid Society of Hawaii’s Maui office, said his agency is helping a steady stream of Maui renters who face evictions, notices to vacate or rent hikes.

“We send a demand letter. Most of the time the landlords back down,” Severson said.

Courts are generally dismissing eviction cases because the moratorium is in place, he said. Severson encourages renters who can’t afford their own attorney to contact Legal Aid if they’re facing what they think is an illegal push out the door.

If they get to us or it gets to court, they’re in pretty good shape. The proclamation is pretty effective, but only as effective as the people that actually have the requisite information and knowledge about what the protections are and kind of what that means for them legally,” he said.

The situation today bears similarity to what occurred during the Covid pandemic when an emergency proclamation was also in effect that barred landlords from raising rents or evicting renters, with certain exceptions.

Justin Schmotter, left, with friends Laura Williams and Eric Hofer. (Courtesy: Justin Schmotter)

Currently, a landlord is allowed to move tenants out if they want immediate family members who want to move in, or if they want to sell or renovate their properties.

Housing advocates consider those loopholes that make the eviction moratorium fairly toothless because landlords can use them regardless of their veracity.

“They make up these stories. ‘My mother-in-law is coming back,’ ‘I want to renovate,’” said renter Sheila Walker. “They can make people leave on a whim.”

After one of his roommates contacted Legal Aid and Schmotter started reaching out to the media, the car salesman said he received a text and email from the property management company on Saturday night. As it turns out, the homeowner has decided not to renovate after all so Schmotter and his two roommates can stay on a month-to-month basis.

“You guys have been great tenants, making it nicer, paying on time, no complaints, but the owner has told us he has plans for his property,” wrote Cramer.

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

Struggling To Get By” is part of our series on “Hawaii’s Changing Economy” which is supported by a grant from the Hawaii Community Foundation as part of its CHANGE Framework project.

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