Maui is bracing for a potential shift in post-wildfire housing aid that could ripple through a rental market already strained by the 2023 Lahaina and Kula fires. Nearly 1,000 households displaced by the catastrophic wildfires are awaiting a decision on whether FEMA rental assistance—helping residents stay in housing and supporting units leased by the agency—will be allowed to expire after February. The concern is that expiration would leave families to find new housing or pay more in a market where vacancies are scarce and costs have risen sharply since the fires.
The assistance has been a central part of FEMA’s role in stabilizing housing after the disasters, which destroyed 2,200 structures and killed 102 people in Lahaina, West Maui, and in Kula in the island’s upcountry region. In the initial response, FEMA backed disaster relief after then-President Joe Biden declared a major disaster, unlocking aid for about 12,000 displaced people, with 89% of those displaced renters at the time. The program was later extended, with its 18-month window running until February 2026.
According to FEMA’s approach, the agency now faces a decision in the coming weeks about whether to extend funding for the rental assistance. The uncertainty arrives as Trump administration officials have floated reducing FEMA’s role in disaster recovery and shifting more responsibility to states, though it remains unclear how that broader policy direction may affect the housing-assistance decision. The prospect of an abrupt end is already influencing residents who depend on FEMA-backed housing arrangements.
Kukui Keahi, a Lahaina fire survivor who rents an apartment through FEMA, said she worries about the financial impact if the program ends, adding, “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.” Another displaced resident, Nicole Huguenin of Maui Rapid Response, warned about the timing, telling local responders that an increase in families trying to rent in February would collide with an already impacted market. “All of them entering into our already impacted rental market in February scares me a lot,” she said.
FEMA said the extension request is “currently under review,” according to spokesperson Daniel Llargues. Maui County spokesperson Laksmi Abraham said the county is “working with the state and FEMA toward an extension and is optimistic” it will be granted. The exchange underscores that residents’ housing stability is now tied to a federal decision, even as the state and county continue recovery planning.
A key part of the housing network includes modular units built to provide longer-term shelter while reconstruction proceeds slowly. The U.S. Army Corps of Engineers helped FEMA build Kilohana, a 167-unit modular housing complex on a lot overlooking Lahaina town, which required blasting hard rock and installing electric, water and sewer infrastructure. The first family moved in 14 months ago, and FEMA’s broader housing programs also included money for rent, temporary shelters on burned properties, and direct leasing of thousands of units.
Federal officials have also faced a difficult supply reality: Maui’s fires created a “unique crisis” driven by limited housing stock and the island’s distance from the mainland. Hawaii’s rental environment has remained tight, with the Maui rental vacancy rate under 2% and, as of mid-2025, zero available units priced at or below what the federal government deems fair market rent, according to the Hawaii Emergency Management Agency. After the fires, displaced survivors saw rent increases of 50% to 60%, and two- and three-bedroom units still cost nearly double what they did before the fires, according to the University of Hawaii Economic Research Organization.
Some critics have pointed to FEMA’s own housing practices as a partial driver of post-fire rent pressure, saying the agency often leased properties for well above fair-market prices to encourage landlord participation, even though the island’s shortage predated the fires. But residents such as Keahi said the practical issue is affordability, describing the limits of what she can pay: “My goal is to (pay) what I was before and I can’t, there’s no way.”
Rebuilding is underway, including 109 residential construction projects completed and about 300 in process, while supply-chain constraints complicate repairs. “The tough part on the island is everything needs to be shipped in,” HIEMA Administrator James Barros said. Barros also said that if an extension is granted, FEMA could impose new “milestones” for the state to meet to speed recovery, and that county and state officials have been working on contingency plans “for months” in case FEMA assistance ended.
One contingency approach discussed by Barros includes possibly taking over Kilohana if FEMA’s support runs out. Next door to Kilohana is Ka La’i Ola, another community of 450 modular units created through a state-philanthropic partnership, where residents do not pay rent yet and can stay for up to five years. Kimo Carvalho, CEO of the housing nonprofit Home Aid Hawaii, which manages Ka La’i Ola, said a Kilohana resident recently reached out after hearing their housing might expire and asked if an application to Ka La’i Ola would be possible, but Carvalho said the community is already full and has a long waitlist.
Under the terms described in the FEMA notice, if the program expires, all housing-related financial assistance for fire survivors would cease, and any units being leased directly through FEMA would have to be vacated. If that happens, the disruption would fall most heavily on groups tied to current FEMA housing arrangements: about 190 households in modular units at Kilohana, 470 in the direct lease program, and 280 relying on financial assistance would face the sudden need to secure housing in a market with few vacancies.