Despite concerns from residents, the county’s proposed changes to its housing buyout program in Lower Puna have been submitted to the federal government.
The three-phase Voluntary Housing Buyout Program — wherein owners of properties impacted by the 2018 Kilauea eruption can sell those properties to the county — had nearly 500 applicants so far over two phases.
But although the final phase was set to begin on May 2, the county’s Disaster Recovery Division proposed changes to the final phase in April that would delay the beginning of the phase until July and decrease the maximum payout for sellers. Those changes were submitted this week for review to the U.S. Department of Housing and Urban Development, which has provided grant funding for the program.
The final phase of the program allows owners of undeveloped properties to apply for a buyout. But while the first two phases — respectively concerning owners of primary and secondary residences — allowed for a maximum possible payout of $230,000, the proposed changes to Phase 3 would reduce the maximum payout for undeveloped properties to $22,000.
County Recovery Officer Douglas Le said more than $90 million of the program’s $107 million available funds have already been committed to applicants during the first two phases. Taking into account grant administration fees and other costs, the program has only about $5.8 million left to work with.
With 160 Phase 3 applicants already pre-registered to apply, and more than 700 undeveloped properties eligible for a buyout, the program needs to reconsider its payout structure in order to serve as many eligible owners as possible, Le said.
“We’re getting applications for another 12 primary homes, so that’s another bite out of our budget,” Le said.
During a public comment period on the program amendments, residents largely opposed the changes.
Dozens of anonymized comments shared concerns that “the County cannot provide data to show that the Buyout Program has insufficient funds to complete Phase 3,” while others repeatedly called the change in the maximum payout inequitable with the previous phases, whose payouts were determined by the subject property’s pre-disaster market value.
“The HUD rules on the Housing Buyback program gives the appearance of helping lower-income people like myself,” read one comment from a person claiming to be an applicant for the program’s first phase.
“However, the actual funds disbursed will benefit mostly wealthier property owners with permitted high-value homes while discriminating against poorer residents who happen to be local and Hawaiian.”
Other comments said that data presented at an April 18 public meeting was incorrect, and that the county has overestimated the number of eligible parcels for Phase 3. Because owners can apply for only one lot, many lots that are owned by a single owner cannot be eligible for the program, the comments argued.
In the draft of the substantial amendment submitted to HUD, the county made counterarguments to those comments, indicating that only 38 owners of undeveloped properties are currently applying for buyouts in previous phases.
Furthermore, the draft claims, the $22,000 maximum payout “matches or exceeds the pre-disaster market value of 55% of properties (eligible in Phase 3).”
With the amendment submitted for review, Le said HUD has 45 days to respond, adding that if they don’t respond at all, it will take effect regardless. Should HUD deny the amendment, Le said the county would likely have to delay Phase 3 further to determine how best to use the program’s remaining funds.
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.
