A plan for disbursing $83.84 million in federal funds to victims of the 2018 Kilauea eruption was submitted for federal review last week.
The U.S. Department of Housing and Urban Development is reviewing the county’s Initial Action Plan for using funds through the federal Community Development Block Grant Disaster Recovery program, which will direct the money toward a pair of programs intended to help homeowners affected by the disaster.
The action plan will, if approved, funnel most of the CDBG-DR money — $78 million of it — to a voluntary housing buyout program, through which the county can purchase properties impacted by the eruption from owners, allowing them to recoup up to $230,000 each. The final buyout prices will be determined by pre-eruption property assessments from 2017.
County Disaster Recovery Officer Doug Le said potential beneficiaries who already participated in other financial aid programs — such as Federal Emergency Management Agency Individual Assistance, U.S. Small Business Administration loans or private insurance payouts —for the most part will not see a reduction in the amount of funds received from the buyout program.
There may be exceptions, however, in the form of a “necessary and reasonable test,” Le explained. Based on that test, if a beneficiary has received — but not used — disaster aid funds that exceed the cost of a buyout, then the recovery team might reasonably ask if further funds are necessary.
“If you received a $500,000 insurance payout, and you used it to rehouse yourself, that’s fine,” Le said. “But if you received $500,000, and then didn’t use it, does it make sense to pay out more money if you don’t need it?”
While Le said he isn’t sure how many people, if any, would be subject to that exception, he pointed out that most beneficiaries would have to have a large sum of unspent benefits in order for it to be a factor.
Le said any land purchased by the county will be cleared and will have to remain open space, as per HUD rules. However, he added, there may be low-impact development on certain lots — for example, low-investment agriculture that can be more easily replaced in the event of a future eruption.
Le said public testimony regarding the program has been largely positive, although he added that specific comments would not be available to the public. However, according to the action plan itself, 70 out of 93 testifiers commented in support of the program, with most simply wondering how to apply when it becomes active.
Another $1.6 million of the funds will go toward housing relocation services, while the remaining approximately $4 million will be used for administrative expenses.
Now that the Initial Action Plan is in the hands of HUD, Le said it will be reviewed and eventually returned to the county with additional suggestions, which the county will implement within 45 days.
While Le said HUD knows the contents of the plan, having worked closely with the county to develop it, he wasn’t sure when it will be approved and returned to the county.
The buyout program is anticipated to begin April 2021.
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.