 back to think that this is community matters. We're talking about Maui. We're talking about an update on the resurrection of Maui because it still needs a lot of work. And we have our Maui branch, if you don't mind, Mahela Stoops, and she reports to us from time to time what's going on in Maui and how the resurrection is doing. Welcome to the show, Mahela. Thank you very much, Jay, for having me again and giving me an opportunity to give you an update. So give us a snapshot of how it looks to you now as a resident of West Maui and as a volunteer, a community person observing, you know, the rebuilding of the community. Well, just as it has been here in West Maui since the fires, we have a lot of buys and a lot of lows. And, you know, we get optimistic and pessimistic. And it continues to be very challenging for fire victims to make really important decisions, given these circumstances. But who are they? Are they living still in hotels? Are they intense? Are they with their neighbor's family? If they don't have a house, where are they? So to my knowledge, and I may not have the most accurate number, but there are probably 4,000 to 5,000 people still in hotels. And as a reminder, almost 10,000 people were displaced because of the fires. So the difference is people that have managed to secure accommodations, long term rentals, either in West Maui, a lot of them in Central and South Maui, and or upcountry. And there's a good number of people that have moved off island as well. And I don't have any data other than anecdotal evidence, people that I know that have moved off island. And off island means off island to another island or off island to the mainland. Most of the ones I know are on the mainland. And I'm also aware of other people that are leaving or preparing to leave as we speak. And what's interesting is that it's not only fire victims that are leaving the island, there are also other West Maui residents that may have not lost their property in the fire, but maybe they have lost their job or potential business. And they're leaving as well. High points, you were talking about the reconstruction of the elementary school. Can you tell us what's going on with that? Yes. So I was very pleased to notice and I'm very pleased to report that Sunday afternoon, 508, I was at the intersection of Akahelei and Monapilani Highway. And that's a perfect vantage point to see the progress on the new school by the airport in Kahana or Kapalua. And people were construction workers or on the job sites still working. It was almost, you know, the sun was about to set in another 30, 40 minutes. And it was a very active job site. So I was just ecstatic to see that they're working late and working on Sundays to meet the deadline. I believe that they want to open the school right after spring break. And it seems like they're doing everything possible to meet that deadline. And that's not the only school that burned down, but there are others. Can you talk about the status of them? Right. So as a reminder, we completely lost Kamehameha, the third elementary school in the fire, along with several preschools that were located in the Front Street area. And there is a very, very fine need for preschool and elementary school. As it is, we have a handful of, I'm sorry, actually two private entities that offer preschool and elementary school education. And then Princess Nahiana Ana and is offering, this is the public school. But Princess Nahiana Ana is located very close to the burned area. So there has been a lot of reluctance from parents to enroll the kids in school. Why? Why do they reluctant? It's a combination of seeing the burned zone on the way to school and also concerns, I think, also most importantly, concerns with air quality, water quality. There have been assurances that the air quality and water quality meet the standards. But there's always discussions about these issues and everybody determines their own level of comfort and safety. But when you talk to your fellow Mayans, how are they feeling? So again, it's like optimism, but there's also dealing with the current issues and things that are still not quite solved. And one of them, of course, is we're still dealing with a severe housing crisis for not just for the fire victims, but actually it's extended to the entire island. And one of the most recent programs that FEMA has initiated in cooperation with the local and state government is to essentially incentivize owners of short-term rental units to accept a long-term contract for compensation that is very similar to what the estimated revenue would be if they were to do short-term rentals. So there are three contract, FEMA contractors. And in addition to them, now the local rental management companies based here in West Maui are getting involved. And their involvement gives owners of these properties more peace of mind in regards to how the properties managed and maintained for the duration of that two-year contract. Because the biggest concern was that what if we accept a long-term contract and two months into it, the tenant doesn't pay rent. And according to the government's proclamation, evictions for non-payment are illegal. So a lot of owners were reluctant to engage in such long-term rental contracts. And the contribution or what the local rental management companies have to bring to the table is primarily asset preservation, meaning they will inspect the units once a month. They would be more detailed in vetting the tenants. So I think in the, to my knowledge, in a matter of the first two weeks of the year, once these rental management companies have started to get involved, the local ones, there have been hundreds of units that are being in the process of being converted. We need more, but it's happening. And I'm getting a lot of calls from out of state owners asking about the opportunity to engage in a FEMA contract. Would you be the contractor then? You're a real estate professional. So would this be your contract? No, no, no. I only do real estate sales. So I don't do any property management at all. But since the fire, I felt that I needed to contribute in every possible way. So I've tried to connect tenants with landlords, offering information to landlords, offering information to tenants and so on. And I'm happy to do that, my way of contributing. Which reminds me of the first year or two of COVID when New York had a thing where a landlord could not throw the tenant out for another payment or rent. And a lot of tenants didn't pay rent, period. Some of them legitimately, some of them took advantage. And it was very disruptive to the market. To some limited extent, that happened here in Oahu, I don't know about Maui in the first year or two of COVID. And I wonder how rather people are paying rent outside the contracts you mentioned, the FEMA contract. Are they paying rent or are they just too impoverished these days for the lack of a job, the lack of money to pay rent? So here's the, although this plan is, was meant to bring in new rental inventory. And it's accomplishing that. What's happening now is that the tenants that are not fire victims, now their contracts are jeopardized. So particularly because rents have skyrocketed. So I'll give you an example. A studio runs for $3,000 to $4,000. Wow. A one bedroom is $3,000 to $4,000 depending on location. And if it's a short-term rental unit, the compensation from FEMA for one bedroom unit is $7,000 less a management fee. So, you know, you run the numbers. Basically through a FEMA contract, rental owner would get at least $5,000 per one bedroom unit. So while we're incentivizing some owners to work with FEMA, what's unfortunately the problem is, is that we're putting the existing tenants in a very precarious situation. And as a reminder, FEMA is supporting fire victims that did not have homeowners insurance. So either they own their home, but they had no insurance. There are some people like in that situation, or they were renters. So if you were a homeowner that had home insurance, and your home insurance may have provided for a certain amount of money towards your living expenses, and usually it's a flat amount, you're supposed to use that money towards your housing expenses. FEMA cannot help you. And the money from the insurance policy, even with the most generous insurance policy possible, or the best terms you could have gotten, are going to prove to not be enough. And so, I hear, but I don't have enough evidence that there are some cases where FEMA comes in and supplements the funds. But so far, a lot of my clients and friends are in this situation where, you know, I'll throw, here's an example, this family that lost their home and their compensation from insurance for a rental house was $50,000. It sounded like, okay, I could do, I could find a rental for one year. Well, not really. I mean, they found a rental, they moved into it. But once the rental agreement expires, they'll help to compete with properties that, you know, with other victims that are going through FEMA, and landlords are getting paid $6,000, $7,000 for it, or more for a house. So that means after that, well, by the end of that year, we really need greater inventory. So we have to hustle on creating greater inventory. Yes. And, you know, there are several plans in place to create inventory, but unfortunately, most of the ones that I'm aware of at this point in time are not in West Maui. And I know this, you know, depending on where you live, this may sound like, what's a big deal, you get in your car and you drive 50 minutes away, you know, people are very mobile. Well, that's not the lifestyle here. Essentially, you live in West Maui, you try and work in West Maui, and you build your life in this area. So a lot of these projects that have been announced recently by the state and the county, they are in Central Maui, away from West Maui. From West Maui, there is one project under construction right now that was initially, that the building started before the fires, and it's an affordable rental housing project, and they're moving pretty fast. I hope that they will, you know, start, they'll open pretty soon. And I believe they will, they're cooperating with Mr. Bezos, the owner of Amazon, to open a preschool there as well, which is a great idea. So, you know, there are some plans in place, but if you think that we have modular homes already set up or tiny homes or temporary homes, the answer is no, there's none. What about the hotels? You were saying that there are a lot of people still in hotels. I wonder how that works in terms of the inventory, the effect on the hotels and how the studious place person pays the cost of it, if any. No, to my knowledge, the cost of the hotel rooms is paid by Red Cross or FEMA, and all again, they're very generous. This is information that, you know, is going around, so I have not verified it, but the nightly rates that are offered by either Red Cross or FEMA are between $300 and $700 a night, and these are obviously the people who have been in hotels for five months. So, I wouldn't, there's a lot of generosity from the hotels in terms of, first of all, I should give them credit that they housed all their employees right away from the day of the fire. They did the right thing. What any employer does, they care for their employee, and then they opened up for other fire victims, but, you know, a hotel business or hotel revenues are not only the nightly rates, there's the associated businesses, the restaurant, the drinks by the pool, you name it, and that part of the business is affected significantly. Yeah, they must be suffering. So, what about the, you know, the shops in line, what about the businesses in and around Lahaina? Do you see any signs that they are also being rebuilt? So, first of all, in conjunction with the affordable housing crisis, we have a commercial space crisis, because now all the businesses that were affected by the fire in Lahaina are trying to relocate to stay on the west side and try to relocate north of Lahaina, but north of Lahaina, most of the available building inventory is hotels and residences, and just a handful of, not even a handful, three, four shopping areas. So, it's very competitive trying to find a place to open up a restaurant where there is very high need, and not to mention other type of businesses, be it, you know, a store or, you know, just an office to run a, let's say, the well-watching trips, things like that. So, we have this crisis in addition to the affordable housing crisis, and when it comes to rebuilding, the great news is that today, they have started removing the debris, and this is from the burn zone, and this is the toxic ash. Correct. Yeah. So, the EPA completed the first round of debris of highly toxic elements, and so they swept where they did a sweep of all the properties first, and then now there's a second round that is done by actually on Wahoo contractor of FEMA that essentially they go on the lot and they remove, like, you know, let's say there's foundation walls or walls of CMU that are still standing, they remove those walls and driveways, and you name it, and in some cases, up to six inches of soil is removed, and of course, these may have ashes, you know, I've been in the burn zone myself, and it's not like you're going to for me, for a regular person, I couldn't tell you, yes, this has ash and this hasn't. But FEMA can tell, and FEMA is not going to let you rebuild on that site until FEMA is satisfied that the toxic ash is gone, right? Correct. Yes. So, FEMA is going to give some sort of, I don't know, green card, I guess, saying this property has been cleaned according to FEMA standards, and I know that not every property owner has signed up for the debris removal. I also know that apparently some of the signups were lost, so, but you say lost? Yeah, the paperwork itself was lost. Yeah, so the property owners had to resubmit, and, but to my knowledge, I was in a meeting about a week ago, and at that point, almost 70% of the properties have owners have signed up for debris removal. And interestingly enough, there was a large number of commercial properties that have not signed up, and I don't understand that portion. There might be some other, you know, issues. Yeah, I had to sign up. They got to get an architect and maybe an engineer. They've got to get financing or some funding from their insurance company if they have insurance, and then they got to get a contractor to come around and build, and as you were saying, that's all in competition. There are more people who need those services than there are people who can provide those services, so it's going to take a while, isn't it? It's going to take a while, and I think there's two different categories. You're going to have residential building that may be moving a little faster, particularly if the property is not located in a flood zone or in the sea level rise zone. One of the concerns with properties on Front Street is, you know, the potential of flooding because of sea level rising. And the question is, would some of these properties be allowed to be rebuilt given for pay fee? Yeah. Who decides that? County and state. And, you know, it's a very complicated issue that we run into in real estate sales as well. There are studies that show where how the sea level is rising over the next 50 years. And it's going to be heartbreaking to tell a generational family that has lived on the ocean side of Front Street for several generations that they cannot rebuild their home that they lost in the fire. That's one of the secondary effects of having a fire where you have to rebuild. And then all these government regulations come back into play. They don't necessarily give you credit for the fact that you lived there before that you had a residence or a building there before. You know, one of the things that's come up, and I don't know if it's still acting as an obstacle, but there was some sort of rule where you could not sell your property to somebody, you know, a buyer who wanted to come from out of state. And that locked up a lot of people. What's the status of that? So the governor's proclamation basically states that one cannot solicit a person to sell. There is no limitation on selling a property in the burn zone or outside of the burn zone. Now having said that, I know again, it's anecdotal evidence from my brokerage and other brokerages that trying to sell a property that is located in the burn zone right now can and will attract a lot of emotions from the community. So basically, they don't want you to sell. There are people that want to sell and need to sell because, for instance, the mortgage company wouldn't give a deferral. They don't want to continue. They have to continue to pay their mortgage. They don't want to pay the mortgage. So there are people in that situation where they have to sell. And what I'm saying is that I speak for myself as a real estate agent. When I get that question, I tell the client, if you can hold off, you should hold off. Please hold off. Don't proceed with the sale at this point. We are aware of one single property that has conveyed since the fire. It's kind of interesting. It was the interest in a two-bedroom unit at Aina Nalu. It's a condominium development in Aina that is completely gone. Those units used to or right before the fire in the high 800s, low $900,000. This transaction was between an existing owner as a buyer and the owner that wanted to sell. And the sales price was $140,000. And if one is asking how did they come up with this, well, there's still value in the land. And one would be able to determine the interest in the land. And secondly, essentially, it becomes like any other risky investment where you'd put in $140,000, you may need to put in additional funds so that the entire development is rebuilt, but you may end up with a brand new unit in 10 years. That may be worth $900,000 again. Very complicated though. Very complicated. Yeah. And these are condos. It's a lot easier when it comes to homes on land. It's more complicated. Yeah. So what's the general level of economic activity? Are people coming? I mean, tourists, is there a constraint for tourism? Is there any commerce going on in West Maui? There is. So, you know, we're walking a very fine line between needing to financially support this area and at the same time, be gracious and careful with the feelings of the local population. So, because we're all affected, all of us. And, you know, I don't think that we need to stop tourism altogether. I think we just need tourists that understand that we're going, we're still going through grieving, and they need to be respectful of that. And until we can figure out how to run this economy with the different activity that tourism, I guess we're going to have to continue to do this, but in a more responsible manner. Yeah. You know, it's so many elements of the economy in West Maui anyway, Maui in general are gone. It's hard to imagine just exactly what the historic track will be to rebuild that. It's not just the land, it's not just the residences, it's not just the businesses, it's the economy. There's people buying things and selling things and paying for them and so forth. There's a million things. How are we doing on that, Mihail? I'm concerned that these things that you're describing really represent a very slow recovery. Well, you know, we all know that the main source of revenue for the county budget is real property tax. And now you not only have the properties that have been damaged in the fire that are exempt from paying the tax, but also the owners of properties that house fire victims are going to be exempt as well. So there's going to be a significant drop in revenue from property tax. There's also, there has been a significant drop in revenue to the state budget because West Maui was the second highest source of revenue for the state. So, you know, I think our leadership, I pray that they are wise and they take the right decisions and they're in a very tough position, very tough. I don't know how they'll figure this one out, to be honest. Other than just coming before the money flooding in, that's also a possibility. Is this our solutions, bills coming before the legislature that you know of in this session, which begins in a few days, that will give further relief or incentive or encouragement for the recreation of the economy? I'm not, the only deal that I'm a proposal, it's not a, it's a proposal or a thought that we're an idea that is circulating around is to put a moratorium on short-term rentals all together. And I think that's a bad idea. For many reasons, you know, we do rely on out-of-state owners to contribute to our coffers, first of all, and second of all, what kind of message are we sending to the world in terms of, you know, you own a property, you'll have the right to use it in a certain way. And out of a sudden, the government says, well, no more, you cannot do that. I mean, I wonder if that's constitutional. I don't know, but I think it's, that idea has been circulated and I think it's a bad idea. Justice or any other form of limitations of short-term rentals, I think that you could do more with carrots than with stick. You know, I want to tell you about an idea that I have had that I've been thinking about sort of back when you and I first started talking about the implications of the fire. And that is this, the government could step in, the government could build a, itself or through a contractor, could build a facility for small businesses and shops, offices and all that. It doesn't have to be a high-rise, but it could be in line, and it could be relatively quick. And it could be relatively big, but again, not high-rise. And the government could then, you know, lease parts of it to small businesses so that it happens as a coordinated matter, all up and down Front Street with nice architecture, right? Very Hawaii architecture. And get a leg up on this and start a process that would move fairly quickly to restore line. If we allow the thing to go to a free market, we'll be waiting for a long time. This would expedite that. What do you think? Well, you know, again, I've been through the burn zone and read the actual rebuilding, starting to build something we're pretty, we're two years out. There are areas that still have power lines down on the ground. And it's, so I think these first two years are going to be primarily preparing to build. And I think that once we give the green light for building, of course, sure, the government can come in and build. Owners can, there are people that are already working on their designs and permits for the homes that they will be rebuilding. So, you know, I think that will move pretty fast once we're getting access to these properties and permission to build. Are you still participating as a volunteer? What is your role these days in the resurrection, the reconstruction of West Maui? So, I continue to be a connector, essentially, of information at this point. So, I'm less of, you know, go sort out, I don't know, shoes before handing them out. Or I still love to help. So, I participate at small events, but mostly what I do is I connect people. So, I help out in, we realtors, we know a lot of people and we know resources. So, it comes in pretty handy when, here's an example, I received a call, apparently a certain group age from Lila League, they don't have a place to practice anymore. So, they were looking for one to two acre parcel where they can practice. So, I'm working on that. I've presented an option to them, I think they're investigating it. So, you know, this is my volunteer, I don't make any money off of that, I just help the community. And I love doing it. Frankly, and it's not just me, a lot of us here, it's what has kept us going, being able to help. What about health care? We just had a show last hour about health care. And I, especially on the neighbor islands at the shortage of doctors and health care professionals and so forth. How has the fire affected Linux and doctors in health care, the availability of health care for people in Maui? And is it necessary, to what extent is it necessary to rebuild? And what can the people of Maui do to help rebuild? What can you do? Well, both Maui Medical and Kaiser Permanente building were lost in the fire here on the west side. Maui Medical has reopened a few months ago, I think, at Pili Plaza. And I heard that Kaiser Permanente is about to reopen as well. I don't know the location. So, they have Kaiser Permanente has been offering like mobile health services from Royal Lahaina Resort. You know, thanks God, my family and I have not needed any services. So I don't know the practicality of it. I know that most of my friends or acquaintances that need specialized services, they do travel to Ailuku for those. And one other thing is this, I mean, you are very familiar with Maui and how it works, the business end of it, the social society end of it. And what has happened? And you must have, must be formulating in your own mind, a view of what the new Maui will look like, because we all know the new Maui will not be the same as the old Maui. And hopefully it will be better. Hopefully it will have characteristics that we can really be proud of, that people will come from everywhere in the world to enjoy. And I wonder what it looks like to you, Mahela. You know, I think the next few years, two years are going to be tough, frankly. And it will be tough because again, people cannot go back to their property and start rebuilding or they cannot just go flop modular home on their property yet. So there's this social pressure and grieving. It's a grieving loop. It goes again and again and again with every challenge and every stumbling block that these people face. And but I'm also optimistic that once the rebuilding start, you know, where I don't know what France Street is going to look like, there are a lot of ideas out there. It does feel to me that we need to have a memorial on France Street. So I think we have an opportunity to build better. We have a responsibility to carry on the Hawaiian values and history. And we can make it, we can build it to look just as it was before. But this time, there'll be fire hydrants and air conditioning and, you know, electrical panels that are not going to blow up because they're too old and things like that. So we could really the design portion of it is the least challenging in my opinion. We can make it all look the same. We can keep the character of Lahaina, but it will be safer for all of us. And again, you know, we need to commemorate what we lost. Yes. One last thing is how will Lahaina change socially? Some people will go, some people will come. The economy will be different, I'm not sure how. But how do you see Lahaina and West Maui and Maui as socially different in the future? Well, unfortunately, many people are going and I'm very sad. These are people I know. And I assume there may be new people coming. I also see out of state owners that are also considering living in the islands. So there are, in a way, there's also people coming back, like locals that have left and now they're coming back. They do want to be part of it. They want to contribute. And all I could say is that we see so much generosity from the community every day in so many ways. And all the nonprofits that accomplish so much for, in terms of services and goods that they offer, but it's just amazing that way. And, you know, of course, it's after such a tragic event, but it was always there probably. But now it's so much more obvious when you see it in action. You see people helping people all day long in many ways. And it's just, it fills my heart. It's a beautiful thing. And it sends a beautiful message about not only Maui, but, you know, what we have here, the special thing we have here in Hawaii. And that's why it's important that we cover it. And I want to cover it with you again and again as it evolves into the new Maui. Mahayla Stokes, one of our hosts, she does books, she'll be back doing books very soon. And thank you very much. Two weeks. All right. Two weeks. Thank you very much for sharing all this and showing us how you feel and what is happening on Maui. Thanks. Thanks, Jay. We all. Aloha.