The government body overseeing Lahaina — Maui's major tourism and commercial area with dozens of lives lost and billions of dollars in damage from August wildfires — is voting on a rule that may chill investment from outside real estate speculators.
Maui County plans to vote Friday on a measure that would exempt property owners of real estate damaged or destroyed by the August fires from paying real property taxes, delinquent taxes and penalties for three years beginning Jan. 1, 2024, according to county documents. However, these properties would lose this exemption if the real estate is sold prior to Jan. 1, 2027.
The proposed law, part of a package of bills Maui County is voting on, is the latest move from Hawaiian government officials to dissuade outside investors from scooping up fire-damaged properties in Lahaina, a popular destination that typically attracts millions of people annually. Maui County Mayor Richard Bissen previously said in August that fiscal year 2023-2024 property taxes would be waived for improved properties destroyed by the Maui wildfire disaster in Upcountry, Kihei and Lahaina.
Meanwhile, Hawaii Gov. Josh Green issued an emergency declaration in August prohibiting unsolicited offers to buy fire-damaged property. Property owners have the right to sell their real estate, but state officials said in an August statement that unsolicited offers may result in owners receiving less than they otherwise should, according to the statement.
So far, the efforts appear to have been successful to stop real estate investment in Lahaina. No commercial properties have sold since the fires, and no commercial properties are listed for sale in Lahaina, according to CoStar data. Meanwhile, no fire-affected residential properties are listed for sale in Lahaina, according to Homes.com, which is owned by CoStar Group.
It's unclear how long government officials can keep away real estate investors from buying fire-damaged properties. Green said Friday that it may take between five to 10 years to rebuild Lahaina, according to Honolulu Civil Beat.
That timeline may be too long for residents who have been displaced or businesses that can no longer operate in Lahaina, said Mike Morgan, an attorney with law firm Morgan & Morgan. The Orlando, Florida-based law firm is part of a group of firms representing fire victims and alleging a Maui utility company is responsible for damages. Morgan said the vast majority of people today want to rebuild in Lahaina.
"As this lingers, those decisions become harder and harder," Morgan said.
A representative for the Maui County Council didn't respond to an emailed request to comment from CoStar News about the measure. West Maui officially reopened to tourism on Oct. 8.