Retirement

Maui Prepares for Potential FEMA Rental Assistance Cut, Increasing Housing Challenges for Fire Survivors

January 16, 2026 • By gsswpadmin

Nearly 1,000 households displaced by catastrophic wildfires on the Hawaiian island of Maui are anxiously awaiting news on the future of federal assistance that has been crucial in helping them secure housing. As the expiration date approaches, many fear they will be forced to find new accommodations or pay higher rents in one of the most competitive and expensive rental markets in the country.

For the past 2 ½ years, the Federal Emergency Management Agency (FEMA) has played a vital role in supporting these residents. However, with the Trump administration’s broader efforts to reduce FEMA’s responsibilities and shift more duties to states, a decision on whether to continue funding is expected in the coming weeks.

Advocates warn that evicting renters and withdrawing financial assistance could undermine efforts to restore the community in Lahaina, the West Maui town devastated by a massive fire on August 8, 2023. This could lead to a new wave of homelessness and further departures from the island.

“All of them entering into our already impacted rental market in February scares me a lot,” said Nicole Huguenin, executive director and co-founder of the mutual aid organization Maui Rapid Response.

The fires in Lahaina and Kula destroyed 2,200 structures and claimed 102 lives. Following the disaster, then-President Joe Biden declared a major disaster, unlocking FEMA assistance for 12,000 displaced individuals, 89% of whom were renters at the time. His administration later extended the 18-month program until February 2026.

However, with few homes rebuilt and rental inventory dwindling, the state requested another extension in May, with a decision expected before the end of January.

The uncertainty surrounding FEMA’s future role in disaster recovery adds to the anxiety. President Trump has often suggested eliminating the agency, advocating for states to take on more disaster management responsibilities.

“It falls into the hands of the current administration, and I’m not sure if they’re fond of the amount of money we’ve had to use,” said Kukui Keahi, a Lahaina fire survivor currently renting through FEMA after experiencing homelessness post-fire.

If the program expires, all housing-related financial assistance for fire survivors would cease, and any units leased directly through FEMA must be vacated, according to agency notices.

The request for an extension is “currently under review,” stated FEMA spokesperson Daniel Llargues. Maui County spokesperson Laksmi Abraham expressed optimism, saying the county is “working with the state and FEMA toward an extension.”

A Unique Megafire

While megafires in other states have caused extensive damage, Maui’s fires have created a unique crisis. The island’s limited housing stock and remote location complicate the relocation of survivors and the rebuilding process.

FEMA, along with state and county agencies and nonprofits, has been scrambling to find housing solutions for displaced residents, most of whom wish to remain close to Lahaina for work, schools, and community ties.

Initially, FEMA collaborated with the Red Cross to house 8,000 residents in hotels and temporary shelters. Over time, the agency transitioned families to various forms of housing assistance, including rent money, temporary shelters on burned properties, and leasing thousands of units for survivors, despite some complaints about eligibility requirements and frequent relocations.

The U.S. Army Corps of Engineers assisted FEMA in constructing Kilohana, a 167-unit modular housing complex overlooking Lahaina. This project required significant infrastructure work, including grading the land and installing new utilities. The first family moved in 14 months ago.

Unaffordable Rent

If rental assistance ends, approximately 190 households in modular units, 470 in the direct lease program, and 280 relying on financial aid will be thrust into an already strained housing market, which has seen little improvement since the fires.

Maui’s rental vacancy rate is below 2%, and as of mid-2025, there were no available units priced at or below the federal government’s fair market rent, according to the Hawaii Emergency Management Agency (HIEMA).

Displaced survivors have faced rent increases of 50-60% post-fires, as reported by the University of Hawaii Economic Research Organization. Two- and three-bedroom units now cost nearly double what they did before the fires.

Critics attribute some of these increases to FEMA’s housing programs, which often leased properties at prices above fair market value to encourage landlord participation, although the housing shortage existed prior to the fires.

“My goal is to (pay) what I was before, and I can’t; there’s no way,” said Keahi, who also works as a program deputy at the Hawaiian Council, a nonprofit managing multiple recovery initiatives on Maui.

The slow recovery of Maui’s tourism-dependent economy further limits what tenants can afford. To address supply challenges, the county recently passed a bill banning short-term rentals in apartment-zoned properties starting in 2029, despite opposition from those concerned about tourism and job impacts.

Rebuilding efforts are gaining momentum, with 109 residential construction projects completed and around 300 in progress. “The tough part on the island is everything needs to be shipped in,” noted HIEMA Administrator James Barros.

Optimism, With Contingency Plans

Barros mentioned that if an extension is granted, FEMA could impose new “milestones” for the state to meet to expedite recovery. FEMA has previously extended housing assistance for both large disasters like Hurricane Katrina and smaller events, depending on local needs.

The county and state have been preparing contingency plans for months in case FEMA assistance ends, including the possibility of taking over Kilohana, Barros added.

Next to Kilohana is Ka La’i Ola, another community of 450 modular units created through a state-philanthropic partnership. Residents there do not pay rent and can stay for up to five years. Kimo Carvalho, CEO of the housing nonprofit Home Aid Hawaii, which manages Ka La’i Ola, reported that a Kilohana resident recently inquired about applying to Ka La’i Ola, but the community is already full with a long waitlist.