Five former homeowners in lower Puna have had their lava-affected properties bought out by Hawaii County.
The Voluntary Housing Buyout Program allows owners of properties that were isolated, damaged or destroyed by the 2018 Kilauea eruption to sell their land to the county, which purchases the parcels using funds from the U.S. Department of Housing and Urban Development.
The county successfully closed deals with five of the earliest applicants in the last week of June.
Those five applicants were owners of primary residences impacted by the eruption. Only owners of primary residences were allowed to apply for buyouts during the first phase of the three-phase buyout program, which began April 2021.
Recovery Officer Douglas Le said some of the five were able to receive the program’s maximum payout of $230,000, while others received smaller amounts.
The amount of the payout is determined by 2017 property assessments, with the $230,000 cap being the median appraised value of properties in the area during that time.
Le said more deals will be closed with first phase applicants throughout the next several months. Phase two — for applicants those with secondary residences impacted by the eruption — began last November and ran through January.
The program’s final phase begins Monday. Running until the end of October, it will allow owners of undeveloped land to apply for a buyout, albeit at a lower maximum payout value.
Le said that, based on the number of applications during the first two phases — about 450 are still active — the program has only about 5% left of its $83 million budget to allocate for the final phase. Because of this, HUD last week approved an amendment to the program that reduces the maximum payout for undeveloped properties to $22,000.
Even so, Le said the program may not be able to serve all owners of undeveloped land, depending on how many apply. Conservative estimates put the number of properties eligible for the third phase between about 600 and 800, Le said, and about 200 owners of undeveloped land have registered with the program so far.
“We’re getting to the hard decisions now,” Le said, adding that owners of primary and secondary residents who apply during the third phase will still get priority over undeveloped property owners, and the program prioritizes aid to lower-income applicants.
Meanwhile, some owners of properties with unpermitted structures may be out of luck. Jojo Mustapha, who owned a home and an eco-community business that were both destroyed in the eruption, said the unpermitted structures on his property were not considered during the assessment process, leading to a valuation well below the actual value of the property.
“It ends up being a form of discrimination, because it values the unpermitted structures at nothing, and because unpermitted structures are more commonly used by poorer people, they get less help,” Mustapha said. “But the rich owners who get can afford permits get a big payout — they get their insurance and everything.”
County documents claim that unpermitted structures are still eligible for HUD assistance so long as the applicant “can document the residence at the property prior to the disaster event,” although recovery spokespeople were unable to confirm whether unpermitted nonresidences are considered in the valuation.
Le added that all those owners who have registered with the program will still have to actually submit an application once the appropriate phase opens, adding that it behooves applicants to apply early.
After the closure of the third phase, Le estimated that the program will make its final payouts between the middle and end of 2023. By the time that happens, he said, the county likely will have a better idea of what to do with the properties purchased, although he added that HUD rules stipulate the bought out land cannot be redeveloped.
Applications can be made at recovery.hawaiicounty.gov.
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.
