The Federal Emergency Management Agency is scaling back its direct lease program for survivors of the 2023 Maui wildfires, recently canceling over $2 million worth of contracts with a private company that had been managing residential units on the island.

At least 14 contracts with Lima Charlie, a California-based company specializing in disaster relief housing and property management, were terminated on Aug. 28. FEMA said it had secured temporary housing for all of the eligible households enrolled in its direct housing program and there were “no remaining unmet needs,” according to agency spokeswoman Nicole Timon-Shipman. 

“As families transition out of the FEMA temporary housing program, we will continue to release the units they vacate,” she said in a statement.

By September, FEMA had reduced the number of contracts with Lima Charlie that were associated with the direct lease program to 27, according to federal data. The agency had 42 contracts with the company in August and 637 over the course of the last two years.

Two other private companies, North Carolina-based Aesthetic Home Investments and Florida-based Parliament LLC, were also contracted by FEMA to manage rental units on Maui. Since September 2023, the agency has had a total of 446 contracts with Aesthetic Home Investments and Parliament, according to publicly available data. Last month, FEMA only had 14 contracts — some of which were related to multiple units — with the two companies for Maui properties.

FEMA has played a pivotal role in Maui’s recovery efforts since the August 2023 wildfires killed at least 102 people, destroyed more than 2,200 structures and displaced more than 12,000 residents. The agency has connected more than 1,300 fire-affected households with temporary housing. 

The agency’s direct lease program, however, has come under criticism numerous times since its launch on Maui in November 2023. Critics have argued that the program may have contributed to surging rent prices across the island, prevented families from moving into suitable units and took months to successfully match survivors with units.

As of Tuesday, there were 798 households assigned to a FEMA-provided temporary housing unit as part of the agency’s direct housing program, agency spokeswoman Veronica Verde said. Of those households, there were 639 enrolled in its direct lease program — which places families in apartments, condos and houses that the agency leases directly from property owners — compared to 814 in May of this year. Another 153 of those families were living in one of the 167 modular homes at the agency’s Kilohana Temporary Group Housing site in Lahaina, she said, and six were staying in FEMA-provided temporary units on their private properties.

FEMA may have been able to decrease the number of units it directly leases for survivors in part because a growing number of families have been able to rebuild homes lost in the fires, and others have been able to move into temporary housing projects overseen by the state and federal governments, Maui Mayor Richard Bissen said.

“What you’re seeing now are those folks that have moved back into their homes already,” Bissen said. “And there are more that are on the way to being approved.” 

As of Monday, 64 homes had been completely rebuilt, and the county had approved 480 permits to rebuild residential units in Lahaina and Kula, according to the Maui County Office of Recovery. 

Timon-Shipman and Verde did not respond to a question asking how many total units were still under contract with the direct lease program. In the spring of 2024, FEMA was leasing 1,335 units directly from property owners, an agency representative said at the time.

Some households are expected to move into one of the 40 temporary housing units recently placed at three secondary sites in Lahaina this fall after safety checks and readiness inspections are completed, according to information released by FEMA earlier this month.

FEMA’s direct housing program, which includes its direct-lease program, is scheduled to end Feb. 10. 

Applications No Longer Accepted

In May 2024, a Civil Beat review of federal contracting records and interviews with FEMA officials found that the agency had been spending millions of dollars per month on nearly 500 empty residential units that were managed by Lima Charlie or one of the two other property management companies. 

A FEMA official told Civil Beat at the time that property owners in the program were being paid an average of $6,000 per month.

Over the course of the following month, FEMA canceled an unknown number of contracts and abruptly informed several property owners that their units were no longer part of the direct lease program.

County, state and federal officials have repeatedly said that the main reason many units sat empty is because some fire survivors were reluctant to move away from West Maui and sometimes turned down multiple housing options that were offered to them on other parts of the island.

The vast majority of the Lima Charlie contracts that FEMA terminated in August were associated with direct lease units in Kīhei, according to federal contracting records. Only two of the 14 canceled contracts were for units in Lahaina.

David Waldbauer, president of Lima Charlie, did not respond to requests for an interview.

According to the voicemail greeting for a number listed for Waldbauer on a 2023 flyer answering frequently asked questions about FEMA’s direct lease program, “Lima Charlie is thrilled to announce the successful completion of our mission to provide housing for the Maui survivors.” 

“With your compassion and generosity, we have managed to secure safe and stable housing for over 700 families. FEMA is no longer accepting lease submissions,” the voicemail greeting said.

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